Minneapolis, MN and Wilton, CT — General Mills will buy Blue Buffalo Pet Products for $8 billion, it says, marking the first time the owner of Annie's and Cheerios has ventured into pet food since the 1960s.

This transaction will establish General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market, and accelerate its portfolio reshaping strategy, according to a companypress release.

Stagnating yogurt and cereal sales, amid a dwindling demand for sugary, processed foods, have driven General Mills to seek out the $30 billion U.S. pet food market.  Last fiscal year, General Mills’ sales fell 5.6% to $15.6 billion, as brands like Yoplait yogurt and Betty Crocker cake mixes lost the attention of American consumers, according to areportin the Wall Street Journal (WSJ).

"We are competing more effectively in our existing categories by really listening to consumers and providing a variety of options that meet their needs," said General Mills chairman and CEOJeff Harmening. "In pet food, as in human food, consumers are seeking more natural and premium products and we have tremendous respect for how attentive Blue Buffalo has been to the needs of their consumers, pet parents and pets, as they have built their brand.  As we have done with Annie's, Lärabar and EPIC, we expect to help Blue Buffalo by leveraging our extensive supply chain, R&D and sales & marketing resources.  We will in turn benefit from their experience building one of the strongest pull brands in the CPG (consumer packaged goods) world."

Blue Buffalo was founded in 2002, and makes natural foods and treats for dogs and cats under the BLUE brand. The company had annual sales of $1.3 billion in its last fiscal year, and has been growing faster than its rivals, according to the WSJ.  "I have been impressed by General Mills' strong track record of accelerating growth for its natural and organic brands, while giving them the freedom to maintain their own unique culture and identity.  General Mills will be a tremendous home for our BLUE brand as our talented team of over 1,700 'Buffs' joins this new extended family," saidBilly Bishop, Blue Buffalo CEO, in the press release.  "From the first meeting Jeff and I had, I felt a strong cultural fit between our two companies and believe they will be a great partner in our mission to reach more pet parents and feed more pets. This transaction creates significant, immediate value for our shareholders, as it recognizes the strength of our competitively advantaged business model.  Along with our leadership team, we look forward to working with General Mills to continue growing the BLUE brand for many years to come."

General Mills is the latest big food company to get into the pet food business. According to areportin Food Dive, Nestle has Purina PetCare, Mars recently bought the VCA, Inc., veterinary and dog care firm and also operates Mars PetCare, Inc., Cargill has its Animal Nutrition segment and Smucker bought Big Heart Pet Brands in 2015. According to Euromonitor, retail pet food sales outpaced packaged foods sales last year with increases of 3.7% and 1.2%, respectively.