JM Smucker’s net sales of pet foods and treats fell to US$441 million in the first quarter of fiscal year 2024. Smucker’s pet product. Smucker’s pet food segment revenue decreased by US$39.0 million. While net sales decreased by US$288.0 million, or 40%, compared to the same period in fiscal year 2023, Smucker’s pet segment had a profit margin of 18.4% in Q1 FY24. If one excludes US$367.7 million of non-comparable net sales in the prior year related to pet food brands sold by the company, net sales actually increased by US$79.7 million, or 22%. Sales of the MilkBone brand increased, although this was partially offset by declines in the Pup-Peroni brand.
“In pet foods, comparable net sales increased 22% compared to the prior year, including a 14% benefit from contract manufacturing sales related to divested pet food brands, and strong growth for Meow Mix cat food and Milk-Bone dog snacks,” Mark Smucker, president and CEO of JM Smucker said on an earnings call on Feb. 27. “In dog snacks, the Milk-Bone brand grew 10% net sales, as volume/mix and net price realization contributed 5%. Milk-Bone continued to outperform the category, with consumer take-away up more than 13%, and growing at nearly twice the category rate.
“Mainstream dog snacks are driving category growth through favorable price-per-ounce economics and consumer desire for value,” he said. “Biscuits and soft-and-chewy offerings generated the largest dollar share growth in the dog snack category last year. Our portfolio benefits greatly from this, as we are the #1 manufacturer in both categories. In biscuits, Milk-Bone had a 62% dollar share and grew more than 2 share points in the quarter. In soft-and-chewy, we’re the #1 manufacturer with double the dollar share and volume of our closest competitor, and we grew by more than 2 dollar share points in the quarter.”
JM Smucker cat food sales in Q1 FY24
Meow Mix brand net sales grew 13%, he said. Demand for cat food exceeded Smucker’s production capacity for dry cat food in the quarter.
“Following recent out-of-stocks due to supply constraints, we have begun to replenish retailer inventories,” Smucker said. “The brand has begun to regain share, and Meow Mix Original Choice is once again #1 in dry cat food based on volume consumption. We expect continued improvement in supply catching up with demand through the second quarter.
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. In 2021, JM Smucker Co. sold its private-label dry pet food business, with its manufacturing facility in Frontenac, Kansas, USA, in Diamond Pet FoodsInc., in a cash transaction valued at approximately US$33 million.
Overall, Smucker’s pet segment results in Q1 FY24 showed the benefits of these divestitures, Smucker said.
“We expect margins to improve further over time after we fulfill contract manufacturing requirements and mitigate stranded overhead costs related to the recent divestiture.”
The 2 brands led the JM Smucker pet division to US$1.5 billion in FY23
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 comprises 39% of that total with pet snacks accounting for US$61%.
