Blue Buffalo Prioritizing FDM, E-Commerce Over Pet Stores



A little less than a year after Blue Buffalo announced that it was moving into mass and grocery stores, and just six months after it was acquired by General Mills, the brand seems to have officially shifted its focus toward mass and online retailers. At least, that's what William (Billy) Bishop, Jr., seemed to signal during his portion of the General Mills' "Fiscal 2019 Investor Day" presentation, where he listed growth in the food, drug and mass (FDM) channel, and ecommerce ahead of supporting the brand's pet specialty partners.


Here is the list of priorities, as presented by Bishop:


1. Continue to Grow in Food, Drug, and Mass


2. Maximize E-commerce Growth


3. Continue to Support Pet Specialty Partners


4. Commission and Ramp Up Two New Plants


5. Leverage General Mills Capabilities to Create Value


"We have a clear strategy that we're focused in on, and really it's all about reaching more pet parents and feeding more pets," he said.


Declaring that Blue Buffalo is already the leader in the pet specialty channel, Bishop went on to detail the brand's progress in gaining distribution within food, drug and mass (FDM).  "As we sit here today, our distribution has increased to about 30 percent," he noted. "I feel good about our performance so far. Right now, we're sitting at a total 6 percent share with the accounts that we're in. We've achieved high single-digit, low double-digit share targets in some of the accounts we've been in for a longer period of time. We're going to continue to expand selectively through [fiscal year 2019]."


According to Bishop, Blue Buffalo will continue to build on its early growth in FDM by driving customer awareness within the channel. "I think it's important to continue to let pet parents know that Blue is now available in the FDM channel, and that includes things like permanent overhead signage, maximizing Blue point-of-sale...," he said.


Moving on to Blue Buffalo's ecommerce focus, Bishop pointed out that while online sales accounted for approximately 4 percent of its business just a few years ago, today it represents 25 percent of sales and is still growing. "It's our go-to-market model that feeds our growth," he explained. "Our premium pricing allows retailers to handle the cost of free shipping."


Of course, the presentation did touch on pet specialty retailers, which Bishop said play "a big role in Blue Buffalo" and will continue to be supported by the brand in various ways. "One of those ways, first and foremost is exclusive innovation," he said, pointing to Blue Wilderness cat products, and Blue Wilderness Danali Dinner and Flatland Feast Wilderness exotic recipes as items that that will be "exclusive to our pet specialty partners this year."


In addition, he said that Blue Buffalo would continue to utilize its Pet Detectives to communicate brand benefits to pet specialty shoppers at the point of sales, as well as invest media behind its pet specialty exclusive product lines. 


Some pet retailers will undoubtedly view exclusive access—however long it lasts—to some of the company's latest "innovations" and continued marketing support as positives, but coming in third-place to FDM and ecommerce on Blue Buffalo's list of priorities is not a good sign for its future in the pet specialty channel. After all, it was putting pet stores first that grew Blue Buffalo into a powerhouse brand in the first place.


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