Smucker Adds More Treats to Bulk Up Pet Food
(Bloomberg) -- J.M. Smucker Co. is doubling down on pet food as consumers move away from mainstream packaged human fare.
The maker of jams, Folgers coffee and Jif peanut butter is unveiling four treats Tuesday -- including two under the Milk-Bone brand -- to beef up its pet-food unit, now the largest division by sales. The company said it aims to generate $100 million in incremental sales this fiscal year, partly driven by new treat offerings.
Smucker is among packaged-food companies that have leaped deeper into pet products at a time when consumers are looking toward healthier fresh fare for themselves. And dog and cat food has become a growth market as Americans increasingly treat their furry friends as members of the family -- a trend called humanization.
Smucker began building its unit in 2015 with the $5.8 billion acquisition of Big Heart Pet Brands, which gave the company Milk-Bone, Meow Mix and Kibbles ’n Bits. In April, it announced a deal to buy Ainsworth Pet Nutrition for $1.9 billion, adding the Rachael Ray-backed line Nutrish. Less than two months earlier, cereal giant General Mills Inc. agreed to buy the Blue Buffalo natural pet brand for about $8 billion.
“Pet is a really important category not only for retailers and customers, but it’s really important for Smucker,” said Bobby Modi, vice president of pet growth and strategy. The division now represents 38 percent of sales, he said.
Smucker is betting on pet food to bolster overall revenue amid sluggish sales in its U.S. retail consumer foods unit. The company has been reshaping its portfolio, focusing on pet foods and coffee, and in July, completed the sale of its baking unit -- including the Pillsbury brand -- to a private equity firm in a deal valued at $375 million.
The U.S. pet-food market grew 4.7 percent last year, while premium dog and cat fare jumped 7.4 percent, more than five times the 1.3 percent increase in the packaged-food for humans market, according to market research provider Euromonitor International.
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