The Leprechaun should be ashamed... Lucky Charms, Cheerios, and Yoplait icon General Mills fell 4% after an earnings report with two dominating themes — Human snacks were down, animal snacks were up. PS: Cereal sales were flat.
Snack sales fell 2%... Feels meta talking about this. GMills' Fiber One, Nature Valley, Gushers, and lunchbox throwback Fruit by the Foot.
- Its Fiber One branded foods "fell out of step" (their words) with US diet trends.
- Even the CFO's confused about the direction of its snacks biz: "We need to get snacks back on track."
Pet food sales jumped 38%... mainly because of General Mills' $8B acquisition of Blue Buffalo last year.
- Blue Buffalo is munching the "pet humanization" trend that Chewy rode to its pet supply IPO this month — It's because Millennials spend big on labradoodles since few of us have kids.
- 90% of dog-owners say Fido is "part of the family" (86% for cat-owners) — And that means paying for Blue Buffalo's premium duck, halibut, and even alligator (it's true) based pet foods.
Pet food and snacks target the same Millennial customer... But General Mills is still getting to know us. It missed with snacks, but nailed it with pet food through a strategic acquisition. That's why its CFO also added this: "You'll see us invest behind some really good ideas on bars and snacks." Translation: GMills is planning to buy the trendy snacks this generation actually eats.