Goldman Sees Premium Pet Food As Bright Spot For Colgate And General Mills Amid Consumer Caution

Goldman Sachs analyst Bonnie Herzog analyzed the pet food offerings to understand the category more. The following are the comments published on Thursday regarding the same.

The U.S. consumer is becoming more cautious due to concerns about inflation, tariffs, and geopolitical uncertainty, impacting the broader staples sector, said the analyst.

While consumer packaged goods (CPG) companies face short-term pressure, an analysis of the pet food market suggests that premium offerings from Colgate-Palmolive Co CL and General Mills Inc GIS are likely to remain resilient.

These high-end products could support growth and help offset weaker demand in other areas, noted the analyst.

The analyst reiterated a Buy rating on the shares of Colgate-Palmolive with a price forecast of $106.00. The Hill’s Pet Nutrition division is expected to be a key driver of sustained mid-single-digit organic sales growth, fueled by category expansion and market share gains.

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The global premium pet food market is projected to grow at around 5% through 2030, with balanced contributions from volume and pricing.

While dry dog food growth is expected to moderate, wet dog food is gaining traction. Cat food, both dry and wet, is anticipated to see stronger growth due to increasing consumption.

Despite an overall slowdown in category growth, Colgate is well-positioned to outperform the market, said the analyst.

The company’s focus on innovation such as Hill’s Prescription Diet z/d Low Fat and new wet cat food flavors along with above-average advertising spend and expanded production capacity, is set to drive household penetration beyond its current 6% in the U.S.

With solid revenue growth and productivity improvements, Colgate is expected to see continued margin expansion, supporting strong earnings.

The analyst reiterated a Buy rating on General Mills with a price forecast of $68.00. The company sees its pet food business as a key catalyst for returning to 2% – 3% organic sales growth by fiscal 2027, with fiscal 2026 focused on reinvestment.

Premium pet food, benefiting from the increasing humanization of pets, is expected to drive mid-single-digit category growth, with contributions from both pricing and volume, noted the analyst.

GIS has historically expanded market share through acquisitions, and its recent Whitebridge purchase is expected to follow suit.

With a strong presence in pet specialty and e-commerce but low household penetration, the brand offers a significant growth runway, particularly in the high-growth cat food segment.

Despite competition from private labels, GIS’s premium positioning has supported sales acceleration and market share stability, opined the analyst.

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