The pet category is getting a vote of confidence from Del Monte.
The San Francisco-based canned good company is looking to sell its canned food business to concentrate on pet food, according to unnamed sources quoted in the Wall Street Journal. Del Monte recently announced the purchase of Natural Balance and has such well-known brands as Milk Bone, Kibbles ‘n Bits, 9Lives and Meow Mix in its seemingly never-ending increasing stable of pet products.
But what may be behind this latest possible development is the simple fact that the pet category continues to grow while canned food product sales are being hammered by an influx of private-label competition and the consumer’s growing desire for more fresh items. Pet food sales grew by about 10 percent at the company during the last quarter, while canned goods showed a 1.8 percent increase in sales, WSJ reported.
Obviously Del Monte officials are reading the tea leaves and see that the future is in pet products. Provided that the company is looking to divest its canned business, this is strictly a money play. Del Monte is controlled by private-equity investors, and they want the best return on their investment. Pet products seem to be the place to be. When they sell the consumer division, they are definitely going to put that money into buying more pet brands.