What's going on?

US food conglomerate General Mills reported upbeat results on Wednesday, and of all the brands that could�ve been its little helper this Christmas � from Cheerios to Old El Paso � it was pet food that proved the company�s best friend.

What does this mean?

General Mills, which sells its products the world over, saw both its sales and profit grow last quarter � the latter by an expectation-busting 7%, which might�ve been why its shares rose on Wednesday. Things aren�t all hunky-dory, mind you: with tough competition from non-branded products, the company�s consumer food sales were flat in North America and declined everywhere else.

Still, those hiccups have been more than offset by a 16% increase in pet food sales from the firm�s Blue Buffalo brand. Clearly General Mills has been barking up the right tree with its improved distribution strategy, which included a major launch at giant US retailer Walmart back in April.

Why should I care?

For markets: Healthy treats.
General Mills acquired Blue Buffalo for $8 billion last year, in a push to capitalize on the growing demand for higher-quality pet food. And it looks like the decision to diversify has paid off, helping the conglomerate offset weak sales from brands like Betty Crocker and Yoplait. It�s not the only company eyeballing that strategy, either: Swiss food and drink giant Nestl� recently announced it was selling off its ice cream business to focus on higher-growth opportunities like nutrition, coffee, and � you guessed it � pet food.

Zooming out: Get it together, Unilever.
Analysts are predicting US and European companies will both grow their profits by 9% next year. But General Mills� strong results � just one day after a woeful update from Unilever, Europe�s answer to the American conglomerate � might fuel the skepticism many investors have about that particular forecast�