NEW YORK — During General Mills, Inc.’s investor day presentation on July 11, Blue Buffalo Pet Products, Inc.’s President, William W. Bishop, shared the company’s top priorities and the expectation of double-digit growth in fiscal year 2019 across the Blue Buffalo product portfolio.
According to Blue Buffalo, the company feeds more than 3% of pets in the U.S. “We are the leader, by far, in the wholesome natural category, which is driving the premiumization of the pet space,” Mr. Bishop said. “We have built our brand by investing over $900 million in pet specialty, driving awareness and education for our brand. And that's brought us to the #1 branded pet specialty as well as the #1 pet food brand online.”
Blue Buffalo plans to expand its distribution across the U.S. and expand its growth in wet foods and treats. During the investor day presentation, Mr. Bishop identified five priorities for fiscal 2019. The company plans to grow the food, drug and mass market (FDM), maximize its opportunity in the e-commerce channel, continue to support its pet specialty partners, open two new processing plants and leverage General Mills resources to create value.
Blue Buffalo launched distribution into FDM in August 2017 and according to Mr. Bishop, the company currently holds 6% of the U.S. dollar share with its current FDM accounts. Blue Buffalo will expand FDM distribution selectively throughout fiscal 2019 with a focus on maximizing in-store execution and refining the supply chain. General Mills has expertise in the FDM channel that Blue Buffalo plans to leverage. “They have a great strategy related to category management and dealing with CRM, which I think will only enhance Blue Buffalo's connectivity to pet parents,” Mr. Bishop said. “And then from an innovation standpoint, clearly, they know human food, and I think that really excites me in how we can continue to premiumize and humanize the pet space as we continue to innovate in this channel.”
E-commerce remains a priority for Blue Buffalo. “It's hard to believe, but just a few years ago … our e-commerce business was roughly about 4% of sales,” Mr. Bishop said. “…Today, it's 25% of our business and still growing. We have a strong brand with high velocities across all of our e-commerce platforms. And, really, it's our go-to-market model that drives pet parent awareness and interest in Blue Buffalo and really feeds our growth.”
The pet specialty channel plays a big role in the company’s past success and is a priority for the future. Blue Buffalo will support this channel with exclusive pet specialty product lines and by investing in media to support those lines. In addition to new innovations in the pet specialty space, Mr. Bishop said a key initiative for the company will be new packaging formats and product offerings in the wet food and treats categories which is an important part, and underdeveloped, in the Blue Buffalo portfolio.
From a manufacturing standpoint, the company will continue its hybrid manufacturing strategy which includes company-owned facilities as well as co-manufacturing partners. This approach allows Blue Buffalo to gain flexibility and productivity and to remain innovative. The company operates its Heartland manufacturing facility in Joplin, Missouri, and is scheduled to open two new facilities, a treat facility in Joplin and a new dry-food facility in Richmond, Indiana. According to Mr. Bishop, Blue Buffalo’s manufacturing strategy helps the company control its supply chain as well as drive margins.
Mr. Bishop said he’s confident in the future of Blue Buffalo; and that with access to General Mills’ capabilities, Blue Buffalo plans to create value for shareholders and deliver double-digit top line and bottom line growth in fiscal 2019.
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