As major retailers drew down their inventories throughout 2022 in an attempt to fend off high inflation, they hit pause on re-ordering Blue Buffalo pet food.
That took General Mills by surprise.
Pet food sales for the Golden Valley-based company stopped growing this fall as the inventory reduction added to the dog-pile of supply chain issues and manufacturing constraints Blue Buffalo was already experiencing.
The company even had to pull advertising and in-store promotional support for Blue Buffalo to avoid drawing attention to empty shelves.
Though General Mills CEO Jeff Harmening assured investors the segment would quickly rebound, the disruption was hard to ignore — operating profits for pet food sank 34% compared to the year before.
"We don't think that this is a long-term trend," Harmening explained to analysts on a conference call last month. "Even though our second quarter was not what we wanted and not what you all expected, the brand remains really good."
The $2 billion business has been a steady source of growth and reliable profit generator for General Mills since Blue Buffalo was acquired in 2018 and Tyson's pet treats were added last year. And it was expected to continue growing on the back of increasing pet ownership and "humanization" trends in pet food.
But General Mills hadn't been able to produce enough pet food to fully meet that demand — and when it had, supply chain issues meant it didn't always get on shelves.