Milk-Bone dog snacks and Meow Mix cat food performed particularly strongly for JM Smucker in fiscal year 2023, Mark Smucker, president of JM Smucker, said at the Consumer Analyst Group of New York (CAGNY) conference on Feb. 22 in Boca Raton, Florida, USA.
“With an improved operating environment for cat food, growth in high-margin dog snacks and the exit of low-margin pet food brands, we are experiencing margin improvement in our pet food segment,” Smucker said.
JM Smucker’s pet division will reach US$1.5 billion in net sales in fiscal year 2023, excluding sales of pet food and treat brands divested in 2023. Cat food makes up 39% of total that with pet snacks worth US$61%.
JM Smucker dog treats past performance and future strategy
“We are a leader in the attractive dog snacks and cat food segments, which continue to experience strong macro tailwinds and growth,” Smucker said. “In dog snacks, we are the leader with a 21% dollar share. Dog snacks have historically been the fastest growing segment in the pet category and deliver higher margins than pet food… Milk-Bone has grown dollar share for ten consecutive quarters, driven by core offerings and premium positioned innovations.”
Milk-Bone’s success came after the company’s efforts to update the brand.
“Four years ago, we set out to revitalize the Milk-Bone brand with a focus on its largest sub-segment, biscuits,” Smucker said. “We want to change the perception that biscuits are boring with refreshed packaging that increases investment in marketing and consistently high turnover.”
Following those strategic initiatives, sales of Milk-Bone biscuits have grown more than 40% in the past four years, he said. This growth resulted in approximately 160 million in dollar sales and three-fourths of Smucker’s growth in the biscuit segment.
“We now use this playbook in the long-term chew, and soft-and-chewy segments,” he said.
The company plans to continue developing the Milk-Bone brand while continuing the pet product humanization trend by including Jiff peanut butter in a dog treat to be released later this year.
“We expect our total dog snack portfolio to grow by approximately 3% annually over the next two years to US$1 billion in annual net sales,” he said.
JM Smucker cat food performance and plans
Meow Mix cat food faced a challenging operating environment last year, but has now returned to growth in category share and revenue, Smucker said.
“The dry cat food category has experienced slow change as consumer needs have evolved,” he said. “We have a robust pipeline of Meow Mix innovation that will provide opportunities for trade-up and treat occasions.”
JM Smucker sold brands
In 2023, JM Smucker sold several pet food and treat brands to Post Holdings, a consumer-packaged goods holding company. The transaction includes Rachel Ray Nutrish, 9Lives, Kibbles ‘n Bits, Nature’s Recipe, and Gravy Train brands as well as Smucker’s private label pet food business.
“Over the next two years, we expect continued margin expansion at the end of co-manufacturing and transition services related to divested brands along with benefits from innovation initiatives,” Smucker said.
