What Does the Blue Buffalo Acquisition Mean for Pet Stores?
Since late last week, the pet industry has been abuzz with the news that Blue Buffalo was acquired by General Mills for approximately $8 billion. Of course, this isn't the first time we've seen an important pet specialty food brand gobbled up by a large CPG company from the human-food world—Mars, Inc. acquired Nutro in 2007 and Del Monte bought Natural Balance in 2013.
Still, this latest acquisition surely has many retailers concerned about what the future holds for Blue Buffalo, which has become a cornerstone brand in pet stores across the country, with a reported with $1.275 billion in net sales during 2017. I can't say I blame them.
While I do not profess to have any inside information about the plans that General Mills have for Blue Buffalo, I couldn't help but notice one particularly troubling line in General Mills' news release about the deal. Under the "Compelling Strategic and Financial Benefits" subheading within the release, General Mills says the following: "BLUE has generated early success in the food, drug and mass (FDM) channel which, in conjunction with General Mills' capabilities, represents a significant growth opportunity through strengthening BLUE's distribution."
This is apparently a reference to the expansion of the Blue Life Protection Formula (LPF) product line into mass and grocery retailers, which Blue Buffalo announced back in August 2017. At the time, the company reassured pet stores that its other lines—Wilderness, Basics, Freedom and Earth’s Essentials—would continue to be sold exclusively in the pet specialty channel. Could this arrangement potentially change under new ownership? Only time will tell.
Stay tuned to PetBusiness.com to see how this story develops.