If cats and dogs only ate people foods, things would be a lot better at General Mills.
That’s the main takeaway from the company’s financial results for the second quarter and first half of fiscal 2023 released yesterday.
Strong performers were ready-to-eat cereals—a category in which General Mills holds a 33.8% dollar share—fruit snacks (54%) and refrigerated dough (73.2%).
Overall, North America net retail sales of people foods rose 11, but pet products were flat, and their operating profit fell by 34%.
While General Mills raised its media expenditures for grocery items in Q2, it pulled back on spending for pet supplies given supply issues and unanticipated retailer cutbacks.
“While we continue to believe in the long-run growth opportunity for our pet business, we experienced an unexpected headwind in Q2 in the form of inventory reductions at some key retailers,” chairman and CEO Jeff Harmening said on an earnings call with financial analysts.
He declined to specify which retailers had cut pet inventory but predicted a return to double-digit net sales growth in the second half of the fiscal year.
Hoped-for drivers of that growth will include the addition of 20% more meat to the Wilderness dry dog food line, the launch of “super-premium” Wilderness Premier Blend dog food and a relaunch of dry cat food under the Tastefuls banner following last year’s debut of Tastefuls wet cat foods.
Introducing consumers to new ways of using Pillsbury refrigerated dough has helped to grow the brand to nearly $2 billion in sales—a gain of nearly 50% over the past five years.
For the first time since its inception in 1949, this year’s Pillsbury Bakeoff contest challenged people to use anything but an oven—including air fryers, griddles, grills and slow cookers.
By targeting ad messaging to consumers who recently purchased an air fryer, “we were able to drive lower cost-per-click and convert a higher share of our new Pillsbury consumers, further building confidence in the value of our first-party data,” Harmening said.
Led by Mott’s and Fruit Gushers, the company’s ecommerce sales of fruit snacks were up 44%.
“We've also expanded our fruit snacks presence in impulse channels, launching new peggable packaging that has helped us drive a 12-point increase in fruit snacks market share in convenience stores.”