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News 289 views last update:6 Aug 2012

Del Monte profits from pet food acquisitions

Del Monte's 2006 acquisitions of the Milk-Bone portfolio from Kraft (for $580 million) and the Meow Mix brands from private equity firm Cypress Group (for $705 million) attributed most of its 12.6% net sales growth in second-quarter fiscal 2007 (ending November 2006).

Del Monte advantages from the booming trend in pet food products. OverallUS sales of dog biscuits/treats/beverages jumped 5.2% last year, to account for $658.9 million of total dog food category sales of $2.96 billion, according to Information Resources, Inc. (IRI).
And Del Monte's strengthening its already strong position in the dog arena. Milk-Bone Dog Biscuits remained the number 1 treat last year, with a 13.5% dollar share. Del Monte also manufactures private-label pet food/treats--and private-label treats overall were in second place, at 11%. Del Monte's Pup-Peroni held fourth place (5.2% share), and Milk-Bone Flavor Snacks Biscuits were in sixth place (4.1% share).

Plenty of competition

Still, there's plenty of dog-eat-treat competition, including number 3 Beggin Strips (Nestle Purina, 8.9% share) and Greenies, dental health-oriented chewies that took the market by storm after their introduction by S&M NuTec eight years ago.
According to a new pet-food category report from Market Research's Packaged Facts division, Greenie's IRI-tracked sales leaped from $16,000 in 2000 to $30 million for the 12 months ending May 6, leading some analysts to predict that the upstart would soon overtake Milk-Bone. Instead, in the wake of claims that Greenies were sickening or even killing some dogs, the brand's sales dropped 10.6% last year, and its share dropped by nearly a percentage point, to 3.8% (7th place).

But with the backing of new owner Mars Inc., Greenies is now fighting back with a reformulated version. And Packaged Facts analysts report that TV commercials may be in the offing.

Related websites:
Del Monte
Nestlé
Mars Inc


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