Better Choice Company was created in 2020 with the merging of two brands: Premium pet food brand Halo and freeze-dried raw pet food brand TruDog. Halo has been on shelves for 30+ years, and TruDog served a specific online customer looking for freeze-dried raw food for their pets. Both were ready for a serious facelift, and that’s where new CEO Scott Lerner started when he took over in January 2021.
Building the right team for success
“My background is 20+ years in consumer-packaged goods (CPG), but all in the food and beverage side, so I didn’t have any pet experience, which actually has become a huge advantage for us,” says Lerner. “When I came in, I said: We’re going to be the most innovative premium pet food company in the world. And my thesis was that, in order to be innovative, we can’t have everyone [on the team] from the pet industry or we’d just generate the same old stuff. I knew I needed a combination of people who had been there, done that, and hopefully in a big way, and then bring in other thinkers to create diversity in terms of thought.”
Lerner got right to work, and he didn’t let geography limit him.
“We have 50 full-time employees,” he says. “We work remote — we embrace a ‘win from anywhere’ approach, so we use technology to our advantage. We recruit for skill, not geography, and that allows us to get great talent. Our team is rock solid from sales down to customer service. Everyone’s incented to grow the business.”
Better Choice is out to think differently and operate differently.
“That was really Day 1,” says Lerner. “Because as CEO I needed to know that I could be successful, and I needed a basic thesis coming in of what we’re going to do. I was a consumer of the category, I wasn’t working in it. I said to myself, what’s missing, and more importantly why isn’t there this connection from the pet space into where I was in the natural/organic human food space that was growing very quickly. That’s why I took the job — I knew we could stand out and be different. It was ingrained in our culture from the get-go.”
A target market: The millennial pet parent
“We decided, let’s go after the millennial pet parent and really take this omnichannel approach,” says Lerner. “We were already selling in multiple channels: Brick and mortar, third-party e-commerce, direct-to-consumer (DTC), and an international business that was growing.”
Being channel agnostic is an important part of the Better Choice strategy.
“Millennial consumers want to shop when and where it’s convenient for them,” says Lerner. “We want to get the sale and create a seamless journey for the consumer and make it convenient for them. So that’s the way we approach it. For example, our DTC platform isn’t just there purely for sales, it’s there to be a connection point to the consumer and acquire information on them to feed innovation and help them figure out where they want to shop.”
Another key is meeting pet parents where they’re at.
“The plan is to go where that millennial consumer is,” says Lerner. “It’s using mediums they interact with, like AR (augmented reality), leaning into Web 3.0. It’s creating media and putting it where they consume that media — and not necessarily pet media. We can live alongside these other brands and we don’t stick out like a sore thumb.”
The way people are interacting with brands is changing, and Better Choice intends to put in the effort to make sure potential customers become actual customers for the long haul.
“Lifetime value is where you should be playing from a pet perspective,” says Lerner. “It’s like an annuity — hopefully your dog lives like 15 years — that’s a lot of money to the company, so that’s a journey we need to take with [our consumers] from a life stage perspective with their pet. And their interaction with their pet is going to change from puppy to teenager to senior, and so we’re constantly generating new content. We build a community, keep the wheel going, and then provide them with community information, not just trying to sell them a bag of dog food. We just want to feed into the sense of community in a non-intrusive way. We want our food sitting in the pantry next to [other brands] and have it just fit.”
Being a publicly traded company (BTTR)
Better Choice Company (BTTR) entered the New York Stock Exchange in June 2021 while raising US$40 million in capital to support the growth plan for the company’s refreshed Halo brand. Being a publicly traded pet food company has been an asset, according to Lerner, ensuring that everyone knows where the company’s at and where it’s headed.
“It’s a little bit more work because you’re engaging with the investor community,” says Lerner. “You’re always selling — they’re our customer as well, and you’re selling the brand. But it’s a great asset, because it makes you think about how to position the brand and the company in a very positive way, and be more overt. You can go on our website and see our press releases, see our investor presentations and get a sense of what we’re up to. But what’s cool about the pet space is because so many people own pets, they’re built-in consumers too. So even though we’re talking about the company to a Wall Street exec, they’re also buying our product because they have two Goldendoodles at home.
“I also believe it creates a level of discipline that is higher than would be required from a private perspective, because of SEC (U.S. Securities and Exchange Commission) guidelines and auditing and all the things you have to do,” he says. “So our team has to be better sourced and just better in general. It’s a huge motivator, because everybody in the company has options; it’s almost like a scorecard every day. But it’s a lot easier tool than ‘Trust me, we’re doing great,’ and it’s a great recruiting tool, as well.”
The future of Better Choice
Having built his team and gotten everyone on board with the mission, Lerner says the company is very much building for the long term.
“We don’t have a short-term mentality, and that helps create a great culture too, where people take on a business owner mindset and treat our business like it’s their own,” he says. “If you look at our investor materials, our marker is to be at least US$100 million in revenue by 2023, and that will come through the penetration in the pet specialty channel. It will be the launch of Halo Elevate Cat later [in 2022]. Then, it will be filling out the rest of the innovation pipeline and starting to push it with potentially new product lines that are out there in the market, and having a full suite of products the pet parent can feel good about feeding their pet.”
Continuing to grow the company’s international business is also a priority.
“Internationally we’re really growing fast in Asia, rooted around China,” says Lerner. “We have MOA (China Ministry of Agriculture) approval on 15 diets into China, and that business keeps growing. We have a great partnership there and it’s a tremendous business for us, because we sell our American-branded product.”
Overall, Lerner says, it’s about growth through talent acquisition and product innovation.
“You won’t see us doing things that everyone else is doing, because that doesn’t create incrementality down the road to someone who maybe wants to acquire this business,” he says. “They don’t want something that’s going to cannibalize their existing business, they want something that’s incremental to them from a margin perspective. Because of my private equity background, I’ve been on both sides of the wall and I know what it takes to get someone interested. We’re creating something that has longevity and profitability to it, whether we’re doing it or someone else is doing it.
“We’re very much going to be the tip of the spear,” says Lerner. “That’s where we’re going to live. And hopefully people follow us, because if they follow us, it only helps us. It creates awareness to, okay, let’s be more transparent with what’s in these products, and use imagery like you’d see in your Whole Foods, and be more telegraphic in that regard. It’s not hard to do, you just have to want to do it. We do it because we know the consumer we’re going after, that’s what they want. And it all goes back to their relationship with their pet.”
Fast Facts
Headquarters: Tampa, Florida, USA
Officers: Scott Lerner, CEO; Sharla Cook, Chief Financial Officer; Rob Sauermann, Chief Operating Officer; Donald Young, Chief Sales Officer
Brands: Halo
Website/Social Media: www.halopets.com; @halopets on Facebook and Instagram; @halo_pets on TikTok
Notable: Our sales team loves to show off our deliciously unmatched wet dog food … BY EATING IT THEMSELVES!
