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%
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.
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