General Mills Buys Blue Buffalo
General Mills has entered a definitive agreement to purchase natural pet food supplier Blue Buffalo for $8 billion.
The deal expands General Mills’ rapidly growing natural foods portfolio and marks the first time the company has marketed pet products since the 1950s. And, it gives the Minneapolis-based company a brand that's a newcomer to the mass market and has been rapidly gaining share in that channel. General Mills said Blue is also the leading pet food brand online and in pet specialty stores. In fiscal year 2017, Blue reported $1.3 billion in net sales.
"The addition of Blue to our family of well-loved brands provides General Mills with the leading position in the large and growing wholesome natural pet food category and represents a significant milestone as we reshape our portfolio to drive additional growth and value for shareholders," said General Mills chief executive officer Jeff Harmening. General Mills will operate Blue Buffalo as a new segment. Founder and CEO Billy Bishop will continue to lead the business and report to Harmening.
General Mills describes itself as the third largest natural and organic food producer in the U.S. and has been aggressively expanding in that area. Leading brands include Annie’s, Larabar, Liberte, Cascadian Farm, Muir Glen and Epic.
“In pet food, as in human food, consumers are seeking more natural and premium products,” added Harmening. “As we’ve done with Annie’s, Larabar and Epic, we expect to help Blue Buffalo by leveraging our extensive supply chain, R&D and sales and marketing resources. We in turn will benefit from their experience building one of the strongest pull brands in CPG.”
Launched in 2002, Wilton, CT-based Blue Buffalo was named after Bishop’s Airedale. The company went public in 2015. In August 2017, it expanded distribution into mass and grocery retailers by signing deals with Target, Kroger, Publix and Meijer, and quickly became a leading brand.
General Mills ranked 31st on CGT's list of the Top 100 Consumer Goods Companies for 2017 with $16.5 billion in revenue.