Blue Buffalo gets into fast-growing refrigerated pet food

As more pet owners are opening up the fridge to feed Fido, more brands are bringing their own flavors to the fast-growing category of fresh pet food.

Blue Buffalo is testing a new line of refrigerated dog food in 200 stores, the next frontier in the General Mills-owned natural pet food brand's quest for growth.

"We're testing how pet parents are going to receive it, and how they're going to use it," said Bethany Quam, president of the pet segment for Golden Valley-based General Mills. "It's extremely humanized — a resealable deli container that can be a full meal or put on top of a bowl of dry food."

Pet food is a steadily growing market fueled by an increase in pet ownership during the pandemic and a growing willingness by owners to spend more on pet meals and treats.

But fresh pet food is growing much faster than the category overall and is expected to nearly triple to a $16 billion market by 2027, according to TechNavio.

"It's the simple idea of wanting to feed your pet like family," Quam said. That humanization trend is seen as key for sustained growth in pet food.

General Mills already had some stake in the fresh pet food market. The company's venture capital arm, 301 Inc., has invested in fresh dog food delivery service PetPlate.

Yet as more pet owners return to the office or otherwise get out of the house, they are typically leaving out bowls of kibble, not fresh or wet food.

So in addition to the fresh food pilot, Blue Buffalo is working on innovations and updates across its portfolio — more meat in the Wilderness line; new car-friendly containers for treats; and an effort to increase the number of cat owners buying in the natural category.

"It's about continuing to know where the pet parent is," Quam said. "Making sure we have the right offerings at the right places."

The brand is also eyeing international expansion later this year or early in 2024. The focus will first be on increasing sales in China after a successful test there.

General Mills' pet segment reported $2.3 billion in sales in its fiscal 2022.

"We see an opportunity for an additional $2 billion in Blue Buffalo retail sales over time," CEO Jeff Harmening said at an investor conference Tuesday, "if we can continue to grow our household penetration and continue to grow our [market] share within the premium segment."

Blue Buffalo is coming off a rare pause in its growth due to retailers drawing down inventory and a manufacturing capacity deficit that couldn't meet demand.

Harmening said "customer orders have accelerated nicely" in the current quarter, and the pet segment is expected to report double-digit sales growth.

General Mills on Tuesday also increased its outlook for the rest of its fiscal year, which ends in May, sending the company's stock up 4%. The company expects sales to increase 10% compared to 2022 — double its earliest guidance for the year, which had already been revised up last fall.