Scale-up in terms of production will often lead to increases in defect rates (decreased quality).
Blue Buffalo has maintained its trend of rapid, yet diminishing, growth rates off of an initial relatively small base. Sales of about $352 million in 2011 grew 83% relative to 2010. This trend continued into the first half of 2012 as sales increased more than 60% compared with the first half of 2011.
We expect continued rapid sales growth in excess of 40% for all of 2012, with
significant declines in the growth rate thereafter, including 20% growth in
2013.
Source: S&P assigns Blue Buffalo 'B' corporate credit rating
Bishop said construction of the Heartland Pet Foods Manufacturing plant, a wholly owned subsidiary of The Blue Buffalo Co., will begin immediately. The plan calls for full production — 30 million pounds of pet food a month — to begin in 2015.