“Even minor price changes can affect consumer pet spending, especially in the discretionary pet segments,” reports John Gibbons, who writes the blog Pet Business Professor.
Deutsche Bank analyst Steve Powers said General Mills is making “targeted price point corrections” to its pet offerings that could draw back some consumers.
Overall, the pet segment is struggling as “pet parents trade down and rationalize, which includes buying less wet pet food and pet snacks,” writes CFRA analyst Arun Sundaram.
Blue Buffalo, which General Mills bought for $8 billion in 2018, has benefited greatly from the “humanization” of pet food, a willingness to pay more for quality ingredients. As that trend hits the belt-tightening end of a long run of inflation, General Mills is increasingly relying on advertising and retail promotions to keep Blue Buffalo growing, Harmening said.
“The work we really have to do now is to get treats back growing again,” Harmening said. “At the end of the year, we’re going to say, yes, look, we have bent the curve on growth.”
