In preparation for the September 2009 cover story, Petfood Industry (PI) interviewed key people from Tuffy's Pet Foods :
- Charlie Nelson (CN)-VP of sales and part of family of ownership;
- Jim Farrell (JF)-national sales manager;
- Paula Sucher (PS)-sales coordinator; and
- Chuck Orvik (CO)-product specialist, Nutrisource.
The following is the transcript of the interview.
PI: Your company has a rich history and strong family background. Please explain how and why your family decided to re-enter the petfood industry with your own company again in 2001.
CN: My father and grandfather initially started company back in 1964. It was the very first company family got involved in, so one reason for buying it back was it was our original company and it still was/is near and dear to our family's heart.
Just as important as that, the previous corporate owners were planning to close the facility altogether. Of our town of about 2,200 people, roughly 140 people were employed by that business, a lot of husband and wives, a lot of people that we go back with. It felt like the right thing to do, it was a good time for myself as well to get involved, and it was our very first company our family started, and it just felt right and it really has been a blessing for us.
That was 2001. In between that period when we were not the owners of this facility-the vast majority of our key employees have been with us throughout that time. We're new owners, so to speak, for eight years now; a lot of our key people have been there through it all, and it was a nice thing for us to be able to jump right in.
During that period when we were not involved with the ownership of this facility, we have two other businesses: one where we manufacture human snacks, as well as a licorice company. And we were able to bring some of that expertise on the real manufacturing side of human products back to the manufacturing side of petfood, so it was a very nice fit for us.
It's been perfect for us. All three companies have been able to share some knowledge and experience. That really kind of separates us, we believe, from some others in the industry, and nothing against anyone, but just to own our facility and be hands-on and have that expertise is key for us.
PI: You've launched several new product lines over the past few years. Please describe the concept behind the development of each and how they're all doing in the marketplace.
CN: That is when we quickly learned that while we had a great deal of experience in manufacturing, there was a marketing side to us that we needed to dive into and roll out the products that we are now taking into national distribution: Nutrisource , Pure Vita and Natural Planet Organic .
And those lines, while are relatively new, are all Whole Dog Journal approved and have really allowed us to spread our wings.
PI: Are they nationally distributed?
JF: They're distributed through North America and internationally through the Pacific Rim, Australia and a handful of countries in the Middle East.
PI: Are you looking to expand that?
CN: Yes, well, we expand our brands internationally when there's opportunity. Our focus is to grow our labels on a national basis through the specialty pet chain. While we want to be able to sell our products in all states, the channel we do that through is very important to us. That has been through the independent specialty pet channel for the most part.
We really enjoy working family to family with our business.
PI: What are the differences between the three lines?
CN: Nutrisource is a superpremium line that is the most mainstream of our three products we're talking about. It's free of wheat and corn and has 100% chelated minerals in the product and is an all-natural product.
Pure Vita is more touted as a single-source protein formula, a hypoallergenic formula. Using a single-source protein like a duck formula, or a separate salmon formula, allows us to target customers who are looking for more of a unique protein source or a possible allergy. We also tout some high levels of antioxidants in that product.
The Natural Planet Organic is a certified organic product, and as you know, while that segment of the industry is certainly growing, and is growing nicely for us, it's still a small segment of the market. But being a certified facility, and being an AIB-certified facility, allows us to be involved in that part of the market as well.
The plant and foods are certified by Oregon Tilth .
CO: When the family took over re-ownership of the business in 2001, work started immediately on a superpremium line of products and that became the Nutrisource line. That work went on to make Nutrisource a broad set of products that was superpremium, that used all the nutritional knowledge, all of the ingredient knowledge available in 2001, 2002-it took about two years to develop it.
But that became the main product line, main brand that has been used for national distribution. The Pure Vita and Natural Planet Organic are more niche products that have come out in the last approximately two years. They each have their own position.
Talking about Natural Planet Organic, we're very proud of that product, because it's certified organic, and the feedback we're getting from customers is that the pets really like it, and that hasn't always been true with organic products. We used some of the knowledge we had on Nutrisource and some other products we manufacture to make a product that was not only certified but also palatable and nutritious for the pets.
CN: Paula brings up a really good point with Natural Planet Organics. People ask us all the time because on our website and on our packaging: We also raise money for an organization called Angels of Hope, made up of parents who have had children who have passed away. We give a portion of the sales toward that cause to allow this group to purchase these angel statues and kind of create a place where these parents can go and feel a little closer to their loved ones and grieve in their own way. That's near to our family and our community. That's another thing we do because we want to and we are fortunate to be able to, and it's important to us.
PI: What would you say sets your company apart from the competition? What do you strive to be known for?
JF: We actually manufacture our products. We have a total QC, QA, we have an over 27-year tenure in our facility of making high-quality petfoods. When you look at R&D, product development, consistency and quality, we feel that really sets apart from a lot of our good competitors.
We kind of strive to be known, as Charlie says, we like to do business with family-owned distributors and family-owned retailers, and that's kind of how we set ourselves apart and what we like to be known for: as somebody that's big enough to have a high-quality petfood, to be able to take care of the independent retailer's needs and ensure their profitability and just keeping that relationship. Because we're blessed with this company giving to our community as independent businesspeople up and down the street of the US give to their communities. So we feel a big part of our strategy, and a big part of who we are is family to family business.
PI: Is that true for suppliers, too?
CO: That tends to be true with suppliers. What kind of distinguishes the network of suppliers that provide ingredients for this plant and this business is that the suppliers by and large tend to have been suppliers for many, many years, we've done business with the same suppliers who know us, who know what we expect of them, and we've developed partnership relationships with many of the major suppliers. So our meats and our grains and carbohydrates and our minerals and vitamins and those kinds of things, the suppliers of those ingredients tend to have been our suppliers for many, many years.
JF: Which kinds of lends itself to why we weren't involved in the 2007 recalls.
PI: Because you knew where exactly where your ingredients were coming from and how they had been processed and handled?
JF: We have a large marketing push with our Nutrisource and our brands that we do know our sources.
PI: What are your company's other keys to growth? Continue to expand into independent stores, continue to expand products?
CN: Yes, we are continually looking to grow. We have absolutely no plans of not being a family-owned company, and that is a big question that we get asked. With so much consolidation going on in this industry as you see, whether it be distributors or manufacturers or what have you, people want to know and like to know and deserve to know that we're going to be around, we're going to continue to provide high-quality, ethical products, we're going to continue to bring new items to the market that our retailers are asking us for. We're in the process of rolling out some new cat food items that we're excited about, and some other things.
Yes, we definitely see growth, but, we continue to see growth with that independent, specialty pet store, as we have more and more partners out there that like to embrace the idea that we are working with them and they're our focus. It really works when it's a team effort from us and ultimately the retailer whom we rely on to support us and share our story with the customer.
PI: So they become almost part of your sales team?
CN: Absolutely, and there's nothing more powerful than that.
PI: What are some of your most difficult challenges? In other words, what keeps you awake at night?
CN: I think we'd all like to see this industry continue to move in the right direction as far as being an ethical industry. Ultimately I think we need to make sure that this whole industry is providing high-quality products with pets in mind, and I believe certainly we are all trying to do that. I guess just making sure that we continue doing the right thing that has gotten us to this point. I think we want to make sure and not lose focus on what's gotten us here. And we do remind each other, you know, we're successful, let's not get away from what makes us successful, and that's doing the small things every day.
I sleep OK at night, maybe these other folks can answer the question!
JF: We're fortunate: Our last, really, as far as sales and marketing, our last worry is our quality and product that we market because of our vendor relationships and our tenure in our facility. I guess the thing that we strive to do is be who we are and keep within our niche. And make sure that we get out, in different ways, that we get out to the consumer saying that our first loyalty is to the pet and to the consumer, not to the shareholder, in a very discreet way, please.
But, that's some of the challenges we have: We're a growing company and utilizing modern technology, be it Facebook or other types of electronic marketing is always how we get there and do it well, do it factual and forthright.
PI: So you do use some of the social media tools?
CN: We believe in our Internet a great deal; I'll let Paula answer this a little bit.
PS: We have an active Internet chain coming in here with consumers calling us and contacting us all the time with questions and compliments about how great our products are and their dogs that were old and crippled and sleeping by the fireplace are now back hunting again after eating our food. They're wonderful!
We have a personalized customer service desk here, too. If someone has a question they can pick up the phone and talk to a person on the first ring. We don't have any automated phones here. People tell us all the time how nice that is to actually talk to a human being right away.
All of our dealers are listed on our website, and we leave that open so people can write to us, ask us questions, get more technical information from us that might not be on our bag or our website, so it's a huge tool for us. We get a lot of sales leads come in that way, as well as first-hand dialog with those important customers.
PI: So even though you use a distribution network, you're interfacing one-on-one with consumers?
CN: Absolutely. I think, like Paula mentioned, people are almost surprised at the type of dialog we're able to have directly with the consumer. If there are questions on ingredients, they're answered directly by us. Again, we remind each other, that's why we're growing and that's why I think we have nice relationships out there, is doing these small things that we don't have any plans of getting away from. That's important to us.
PI: In other words, you don't want to grow too fast or too big where you would lose that?
CN: Well, we certainly don't. Now, we want to continue growing, but I don't think we worry about changing what's made us who we are. But like I said, we remind each other of the grassroots approach too growing this business, and we need to continue doing those things.
At the end of the day, we feel like, without a doubt, we make high-quality, ethical products at a fair price, and we do everything we can for our dealers, because they are a bit of our sales team, and when they have questions, we need to answer them. And if we remind each other of that, which we do all the time, we can continue to growing nicely and focus on the segment of the industry that we are and keep moving forward.
PI: Please provide sales estimates for the past year or current year to date-or a comment on sales trends.
CN: We're growing these three premium lines of product at over a 30% clip annually.
That's nice growth, and as you know, with this economy, and people looking at saving money, it's all the more important that we're providing a product worth what people are paying for. These are all high-quality foods, they're not the least expensive foods on the market, but it's important that this customer see their dog look better, and notice that their dog is feeling better, you know again to justify paying for the superpremium type of product that we have.
Even in this economy, we're seeing growth in these lines of product, which is rewarding to us, because we know that the products we're providing are worthwhile to the ultimate customer. As you know, this industry has not been affected very much by this economy. It's very nice to see, but I think we need remind each other we're blessed by this and continue having people realize it is worth it to them to continue purchasing a high-quality food.
PI: This year, has your growth been at the same level?
CN: Absolutely. It's increasing more than ever. We are, without a doubt, expecting every bit of this type of growth for the next few years that we're seeing now. I believe that we're just now hitting our stride, quite honestly, and continue getting more and more credibility and more and more territories.
PI: Anything else for the future? What is the outlook overall for the future of your company?
As Charlie mentioned, we're looking on the docket at some new cat food items, basically just getting a lot more unique type marketing with our current lines.
The biggest exciting thing is, with the change in the industry, and the mergers and acquisitions, there's become a larger niche for our Nutrisource to sell to the independent, because they are looking for the family-owned manufacturer that they can get behind and push, so that has become almost like a new brand for us to market, and we're seeing a lot of growth in that area.
PI: Is that because of the recalls, too?
PI: Speaking of recalls, your products weren't affected-did you see an immediate bounce or reaction to your products right after the recalls happened?
CN: I think we saw a little bump, quite honestly. Fortunately, we've been seeing nice growth in and out of those types of scenarios. Certainly it led to more and more people asking questions, good questions, deserving questions, and it's allowed us more of an opportunity to tell our story. Certainly, we've seen growth for a number of reasons, but being able to tell this story and have it mean more because of those recalls has been a benefit.
PS: Our customer service desk was inundated with calls after the first round of recalls. Just for reassurance that our product was OK. So we were on the phone a lot that first recall, assuring people they were in good hands with our product.
CN: A recall reminds people to ask questions, and we encourage that. They should ask questions, and we should have answers.
The amount of pride that our employees have in producing quality product, it's almost one of those things you have to see to believe, but when you're in a town of 2,200 people and our three companies employ close to 1,000 people, we have a very nice relationship with this town. But more importantly, I think the people appreciate being a part of this, and we as a company and family appreciate them, and there is just a ton of pride at the end of the day providing quality products out there. We are very fortunate in that regard.
We're not the national advertising group, we're kind of out there knocking on doors, telling our story, and we're fortunate to have people embrace that.
PI: What predictions do you have for the petfood industry?
JF: I think the industry has got great legs, has got a great
future. There are some economic times, but those that are
making high-quality products that command their value, will
continue to be very successful. I see an industry that has good
growth, with the aging community, with empty-nesters, and with
the unconditional love that pets give to the human race.
CO: It's changed over the past two years-high commodity costs caused tightness, especially in margins. Relaxing of prices is good for the industry because we're not faced with making tough choices, can make great products at fair prices. And that's good for the economy.
CN: It's good to hear independent pet stores are hanging in there.