Meanwhile, the demand for packaged and processed human foods is on the decline. Food companies that specialize in packaged and ready-made foods are looking for other sources of revenue — and are betting on the booming pet industry.
On Friday, General Mills, the company famous for ready-made foods, such as cereals and yogurt, announced it would buy the Wilton, Connecticut-based company Blue Buffalo Pet Products for about $8 billion in cash. Blue Buffalo is known for its natural pet foods.
“In pet food, as in human food, consumers are seeking more natural and premium products,” General Mills CEO Jeff Harmening said in a statement.
It’s not just the pet-food sector that is changing. The entire food industry is struggling to adapt to new consumer trends, said Steve Odland, president and CEO of the Committee for Economic Development.
“It’s surprising how fad-ish food has been,” said Odland, who is also on the board of directors for General Mills. Throughout history, Odland pointed out, American food tendencies have evolved from farm-fresh foods to frozen meals and now to natural and organic fare.
“This happens continuously,” he said. “It’s very difficult for established food manufacturers to keep up with these trends, to innovate and to make sure that they are hitting the current trends. So here we are with natural and organic, and you see every food manufacturer scrambling to try to find, to buy new brands for growth.
“As dogs go from being animals to being part of the household — children, in this case — you see the move that mirrors what’s happening in human food,” he said.
Other brands that already have a stake in the pet industry include Mars Inc., which owns Pedigree Petfoods, Iams, Whistle and Royal Canin. Nestle, famous for its hot chocolate, owns Purina. The iconic jam and jelly company Smucker’s owns Meow Mix, Kibbles ‘n Bits, Natural Balance and Milk-Bone. And Hill’s Science Diet is owned by the Colgate-Palmolive Company.
Meeker said he’s excited about the Blue Buffalo acquisition. “This is a recognition that [the pet industry] is meaningful,” he said.