Central Garden & Pet is happy to help with both pets and pests. The company is among the largest US producers and distributors of lawn, garden, and pet supplies, providing its products to pet supplies retailers, home improvement centers, nurseries, and mass merchandisers. It holds approximately 40 manufacturing plants and another 30 distribution centers throughout the US; it also has sales offices in the UK. Central Garden & Pet's proprietary brand lines include AMDRO fire ant bait, Four Paws animal products, Kaytee bird seed, Nylabone dog chews, Norcal pottery, Pennington grass seed and bird seed products, and TFH pet books. Chairman and CEO William Brown controls 54% of the company's voting rights.
Central Garden & Pet relies heavily on just a few national retailers for much of its sales. Wal-Mart accounts for about 16% of the company's total net sales, The Home Depot (which named it a "Partner of the Year" in 2011) contributes another 15%, and Lowe's 12%. Additionally, the company's Garden Products segment sells about 24% to Lowe's. The Pets Products segment is reliant on both PetSmart and Petco. Ace Hardware also named Central "Vendor of the Year" in 2011 for lawn and garden products.
Having built a sizable nationwide distribution network, the company has turned its focus to promoting its existing proprietary brands and adding new products (both through its own innovation and acquisitions). Until the mid-1990s Central Garden & Pet derived almost all of its sales from distributing other manufacturers' products; today that figure is just about 15% of total sales.
In 2011 Central's net revenues increased 7% over the previous year, to $1.6 billion. Overall sales were boosted by its Garden segment's growth of 14% in 2011. The company's Garden Products sales were $777 million in 2011, and its Pet Products accounted for $851 million. The company saw a $114.7 million increase (more than 9%) that year in its branded product sales, which include products it manufactures under Central brand names as well as under third-party brands. Branded product sales make up 84% of the group's total sales.
However, Central recorded a net income in 2011 of $28.3 million, which dropped 38% from 2010. The company also attributed an operating income decline of 22% in 2011 to higher raw material costs.
To strengthen its financial performance, in 2011 Central launched a comprehensive review of its businesses. It has also made several management changes and is developing a transformation plan to reduce costs, improve performance, and focus on its higher value products.
The plan calls for turning Central into an integrated, multibrand company instead of separately run businesses focuses on individual brands. It intends to change how it trains people, operates it facilities, markets its products, and provides customer service. It also is investing more in brand-building and research to drive growth. Looking at cost-saving opportunities, Central hopes to eliminate at least $120 million in expenses per year, primarily through supply chain initiatives.
In 2011 it began combining its Garden and Pet Supply chains to make an integrated unit for manufacturing, distribution, transportation, sourcing, and sales and operations planning. – less