Cheerios Maker Says "Hold My Milk" as It Dives Deeper Into Bougie Pet Food with a $1.45 Billion Deal

While you've been letting that box of Lucky Charms expire in your pantry (don't lie, I see you with your avocado toast), General Mills has been cooking up a different kind of breakfast... for your cat.

The company that made you believe eating chocolate-flavored balls in milk was an acceptable part of your “balanced breakfast” just dropped $1.45 Billion to acquire Whitebridge Pet Brands' North American business. Because apparently when humans aren't eating enough cereal, the next logical step is to feed premium kibble to Mr. Whiskers.

"If they won't eat Cheerios, maybe their pets will eat high quality cat food" - Some executive at General Mills, probably. They’re bringing Tiki Pets and Cloud Star into the family and picking up two manufacturing facilities in Joplin, Missouri. 

And the math? Oh, it’s there. Whitebridge’s North American sales hit $325 million last year in a pet food market worth $24 billion. Meanwhile, General Mills’ pet segment already accounts for 12% of its annual sales.

Back in 2018 General Mills dropped $8 billion on the pet food maker Blue Buffalo. That was their "I'm not a regular mom, I'm a cool mom" moment in the pet food space. This is their fifth pet brand acquisition since then. At this rate, they'll be selling Cocoa Puffs-flavored cat treats by 2026.

Here’s the big picture: While you're out here paying $7 for oat milk lattes, the pet food industry is printing money faster than Marty Byrde in Ozarks. Just ask Chewy, which has been absolutely crushing it lately with shares up 55% over the last year. Turns out pet parents would take out a second mortgage on their house for premium pet food.

After all, cereal sales are down 12% over the last 2 years. General Mills is trying to think ahead here. They just sold their yogurt business for $2.1B (because apparently nobody wants to eat Yoplait anymore), and now they're going all-in on pets. 

Jon Nudi, some big shot at General Mills (actual title: group president of North America Pet, International, and North America Foodservice... try saying that five times fast), said this deal will help them "incrementally grow in Cat feeding and Treats." 

Will this move impress investors? Well, considering General Mills stock performance lately has been about as exciting as watching your frosted flakes get soggy (down 5% YTD), they needed to do something. Because the last thing anyone will do is stop spoiling their pets.

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Stock.News has positions in General Mills and Chewy mentioned in article.