EPISODE 56: What is happening in the pet supplements space? And why are the big players interested?

The below transcript is from Episode 56 of the Trending: Pet Food podcast where editor Lindsay Beaton spoke with Dr. Michelle Dulake with Fera Pets about supplements in the pet space. You can find the episode at Trending: Pet Food Podcast on SoundCloud or on your favorite podcast platform. This episode originally aired on February 29.

We want to thank AFB International for sponsoring this podcast. AFB is the premier supplier of palatants to pet food companies worldwide, offering off-the-shelf and custom solutions and services that make pet food, treats and supplements taste great.

Lindsay Beaton – Editor, Petfood Industry magazine and Host, Trending: Pet Food podcast: Hello, and welcome to Trending: Pet Food, the industry podcast where we cover all the latest hot topics and trends in pet food. I’m your host and editor of Petfood Industry magazine, Lindsay Beaton, and I’m here today with Dr. Michelle Dulake, cofounder and CEO of Fera Pets Inc. Hi Dr. Dulake, and welcome.

Dr. Dulake: Hi, Lindsay. I'm so happy to be here.

Beaton: In case you’re not familiar with Dr. Dulake or Fera Pets, here’s what you need to know.

As a veterinarian and acupuncturist, Dr. Dulake searched high and low for effective supplements for her furry patients but was shocked when she was unable to find premium options that she felt comfortable recommending. She realized big corporations were producing less than mediocre formulas, and knew she had to make a change. Fera Pets combines high-quality ingredients, correct dosages and a combination of Eastern and Western medicines to offer a new standard for pet supplements.

Fera Pets is an AAPI and woman-founded brand of all-natural pet supplements that offers the highest amount of active ingredients on the market, combining high-quality ingredients, correct dosages and a combination of Eastern and Western medicines to offer a new standard for pet supplements. The company is making a splash in the pet industry and was acquired by General Mills in late 2023.

Dr. Dulake’s passion for pet supplements and knowledge of the space, as well as her veterinary expertise and her company’s recent acquisition by General Mills, are why I’ve brought her on today to answer this question: What is happening in the pet supplements space, and what does it mean that the “Big Players” are buying in?

Dr. Dulake, I want to start by talking about how Fera Pets came to be and what potential you saw as cofounder in the pet supplement space that made you want to get involved yourself instead of continuing the search for an existing supplement.

Dr. Dulake: Ever since I was a little girl, I always wanted to be a vet, I loved animals. My parents said even when I was walking on the street as a five-year-old, there would be a German Shepherd growling at me, and I would still want to go over there and hug the dog. I was always obsessed with pets.

So I went into the veterinary field because I love pets. I want them to be healthy. I like to see them thrive. When I became a vet, a lot of my pet parents always asked me for what's the best food to feed, what's the best supplements. I turned to holistic medicine, and I got my acupuncture license after vet school. I started doing acupuncture and seeing really great results. A lot of those parents asked me, “Are there supplements, are there herbs that we can give in conjunction with the acupuncture that you're doing?” That's when I looked at the supplement space.

I said, “There's not that many supplements out here that have a mixture of Eastern and Western ingredients.” We've seen it for hundreds of years that Eastern medicine does work. But in vet school, you're taught to really look at Western medicine, prescription medications, things like that.

So I thought, why can't we have this mixture where we can use both therapies to really help the pets thrive. I didn't see anything that had effective dosing that had ingredients that were innovative and clean with no filler formulas. I reached out to my good friend, Emily. We have been friends for over 25 years. We've always talked about doing something in the pet space because we love pets so much. She was working for another pet company doing sourcing logistics. We decided, let's join forces and create a formula that we truly believe in that we feel can make a difference for our pets and see what happens.

We started Fera in 2017. I was still working in the vet clinics, she still had her day job. We started to see momentum. We came out with our first supplement -- it was a hip-and-joint supplement because that's what I thought I had to create to get into the pet supplement space. It was a soft chew. After we launched, I said, “This just doesn't feel true to what I truly believe in.”

With soft chews, there's inactive ingredients. You must make sure that the ingredients combined together. We switched our path, and I said I want really clean ingredients. We mainly have powders and capsules and oils, and it really resonated with some of our pet parents. People are looking for clean formulas that may be flavorless or less allergenic ingredients that were really effective.

We had more and more people start to use our products. We came out with the first probiotic that had a prebiotic in it and that was also USDA organic and that's kind of when we realize we are on to something. People were really looking at our products and saying there are seeing a difference in their pet. I truly believed at that time, probiotics is going to be big because the gut is connected to everything in the body. You eat something, it can affect your mood. You eat something, it can affect your liver. Everything is connected to the gut, and you have 70% of your immune system that's in the gut.

Really focusing on probiotics was a big part of our plan, too. I decided to create Fera just to really make a difference because I saw a gap in the market. At that time, it wasn't because I saw the pet supplement space as being this huge industry, this huge segment. I didn't even know at that time, I was just a vet. As time went on, I realized, okay, this is a great space, people are really starting to care about what they're giving their pets not only food wise, but what else they're giving their pets on top of that.

In 2020, obviously, we had COVID, and I found out that I was pregnant with my second kid. I remember going into the clinics -- this was right when the shutdown happened and we're essential workers – and masks weren't in effect yet. I got coughed on, and just some background, I previously had a miscarriage, I was very anxious. I remember thinking, “Okay, I think I'm just going to work from home. I'm going to dive into Fera full time and focus on e-commerce and just take a break from working in clinics during COVID.” So I did that.

E-commerce did really well. In 2020 and 2021, we became extremely busy. It became a full-time job even two, three times what a full-time job would be. We realized, okay, we're just going all in now, so 2020 was the year we both quit our day jobs and went all in.

We really started to grow. We came out with two products. I custom formulate everything. I look at all the ingredients. I talked to the suppliers. I talked to the manufacturers. Everything is custom formulated to make sure that it's the best product for the pets. Everything that I do formulate is based off the cases that I see in the hospitals. It's not like I'm just making random formulas that I think are going to work. People are coming into the vet hospital, and they're seeing these different issues. I'm saying how can I treat this issue with a more natural holistic approach. That's how the actual products themselves came about.

As we continue to grow, we thought we really need the help. It's just the two of us for the first five years. We finally had our first investor came on. We weren't really looking for investors -- we were still profitable, just the two of us. We were just bootstrapping everything, reinvesting it. We were profitable every year. So we weren't really looking for investors at that time, but when one came up to us, we said, it's perfect. It's a woman investor, she really believes in us.

We brought in her in 2022, and that allowed us to hire a team and really take Fera to the next level. In 2023, the following year, we had our first booth ever at a trade show at Global Pet 2023. That's when we met the 301 Inc., General Mills team. They approached us there.

We weren't really looking for investors, but also very open to talking to investors and lots of investors that walked the floor at Global Pet. If you do have a pet product, I recommend having a booth at Global Pet.

When they initially reached out to us, it was their 301 Inc. team, which is their minority investment team. Initially, we thought, “Okay, we'll talk to you as we're talking to other investors and really got to know the 301 Inc. team.” They were very warm. We really enjoyed talking to them. At the same time, we knew it was General Mills. As a small company, we didn't really know what to expect from this big corporation. Yes, they have Blue Buffalo. They have nine brands that are making over a billion dollars. We're this small startup thinking, what do they really want from us?

I think that I came in very hesitantly in the beginning getting to know them. I realized very quickly that we had very similar values, so I enjoyed talking to them. They continued to reach out and we got introduced to their Gold Medal Ventures arm. Gold Medal Ventures is a new arm for them that buys companies 100% or majority. They said, “We love your brand so much that we would like to introduce you to the Gold Medal Ventures arm. We would really like to acquire you completely and have you fully under the General Mills family.”

So again, very hesitant, because I wasn't looking to sell. If it was a private equity firm, I definitely would have said no, it would just wasn't the time for us. But because it was General Mills, and after getting to know them and their company values, I was excited to learn that we did share similar visions and our values were very much aligned. They were looking for a company that was either vet-founded or was heavily influenced by veterinarians. I think being women-founded was a cherry on top for them, as I came to realize how much they do raise women up internally in their organization. They were looking for a company that does everything the right way, I guess you would say. Not only were we approved, because on a lot of pet supplement labels say “vet approved,” but we're actually a vet-formulated product as I have the vet resources to really make sure that the dosing is accurate and effective.

I think we stay up-to-date on human supplement trends, and I closely follow that and make sure that we're using any innovative and effective ingredients that are out there on the human side and translate that to the pet side. Also, safety and compliance are a must. We are NASC members, and we have undergone rigorous audits by the National Animal Supplement Council, and we bear the NASC label on all our products. That's something they were looking for.

We're also very transparent. Transparency is a part of our identity. On our website, we share where all our ingredients are sourced. We have this COA lookup tool where customers can type in their lot number on the bottle to have visibility on all our third-party testing for safety and potency. We're also a brand that's passionate about environmental sustainability, which we have at the forefront of every business decision that we make. We are accredited members of the Pet Sustainability Coalition (PSC). We published our first impact report last year. In return, PSC named as a top performer for 2023.

These are all things that they were very intrigued by. I think lastly, most importantly, they wanted founders who were just truly passionate about keeping pets healthy, you know, focusing on longevity, so that pets can live their lives to the fullest. I think they could really see how authentic our story was, and why we started this company to really make a positive impact in the space and not just start a pet sell my brand, because we knew it was going to be a good space that had tremendous growth. It felt like a truly natural fit to become part of the General Mills family. So far, it's been a wonderful experience. We can talk again in a year to see where we're at, but it's been great so far.

 Beaton: There's so much that's fascinating to me about you cofounding Fera Pets, and then how it grew. Even though you didn't do it consciously, it kind of grew alongside the growth in the pet supplements space, as pet owners are becoming more aware of their own pet’s health. Then when you decided to go all in right at COVID, when there was a huge spike in everybody sort of obsessing over their own health and then being home with their pets and maybe starting to obsess a little bit about their pet's health as well. Then your combination of Western and Eastern ideas and looking at what was already there and going, “You know what, I think there's more to this, I think I can look somewhere else for some additional influence.”

I want to talk a little bit -- we're going to talk more about General Mills -- but I want to get back to Fera pre-General Mills. What experience did you have with Eastern medicine prior to deciding to integrate it into Fera Pets? And what were some of the top things you were looking for maybe on the human side of Eastern medicine that you thought would translate well to incorporate into pet nutrition?

Dr. Dulake: Growing up half-Asian, I was introduced to herbs as a child and so had an Emily, she's Chinese American. We both had been exposed to acupuncture, Chinese herbs, things that not really many Westerners would have in their therapies as they were going on a healing journey.

For me, acupuncture was big in my life. When I decided to do that for pets, it just really came full circle. I remember one patient distinctly. I had a patient that was three years old, and it fell downstairs. Her name was Leila, and she became paralyzed in the back legs. Her owner really could not afford having back surgery, and she was going to euthanize. I said, no, we really need to try and see if we can help her in a different way. I said, let's just do acupuncture. Let's do acupuncture for a couple of months and see if we can get her to even have movement in her back leg. We started to do acupuncture three times a week and go down to two times a week with Western medicine. We had to use it with a little bit of a steroid. In three months, she was walking again. The owner was just in disbelief.

I just knew that we need to start incorporating Eastern medicine in the vet space, but you just don't learn it in vet school. You just learn to use drugs. I think it was just important to me -- why not use something that's been around for centuries in other countries to really help pets? We're always looking to know how do we make sure that our pets are comfortable? How do we make sure that they live longer? This to me was just a no-brainer. It was kind of shocking that I didn't see anything in the market that had both. When I started doing acupuncture, that was the turning point for me. I knew that I had to incorporate it in some way into the pet space. The one way that I could was herbal supplements.

A big trend I saw on the human side that was starting to grow was mushrooms. I'm a huge believer in mushrooms. We do have an organic mushroom blend, and each mushroom has its own benefits. When you combine them together, they have a positive effect on all the body systems: liver, respiratory, brain. Any body system, mushrooms are a huge benefit. There are adaptogens, so they basically adapt to find in your body -- where are the issues and how do we help that part of the body?

Our mushroom blend resonates hugely in Asia. We have a huge Asian market for our mushroom blend. But also here, I've been getting tremendous feedback about our mushroom blend. Yesterday, I was at the Western Veterinary Conference, and I was walking by a booth and a veterinarian stopped me. She said, “Do you remember me? I just want you to know that I have a dog, a pitbull, that gets mast cell tumors every month, and I have to biopsy and surgically remove it. I was looking for a natural way to help prevent mast cell tumors. I looked at your supplement line, and I found your mushroom blend. Ever since I started using your mushroom blend, my dog has not gotten one mast cell tumor. I thank you so much for creating the supplement.”

We were both got teary eyed. I said, “These are the stories that I love to hear, because we need to have this different type of therapy.” In veterinary clinics, I'm trying to do it, me as a solo vet, I'm trying to get the word out there. There are other holistic meds out there. It's just important to raise awareness that we should be using a combination of both Eastern and Western therapies.

Beaton: Does your interest in nutrition stem from the same type of place because you seem like a veterinarian who is just very, and I'm assuming the majority of veterinarians are this way, you just very much care about your patients. You very much want them to live their best lives. You want as many tools in your toolbox as possible, so you're willing to go outside the traditional path of what you might have learned in vet school or what the majority might be working with to find pretty much anything -- if you think it has merit and might do something for your pets -- just to add it to your toolbox so that you have something else to work with.

I know nutrition isn't necessarily the biggest focus in vet school. I know you take a couple courses. I'm not sure what it's like these days, but I know that it wasn't a huge track or anything necessarily in vet school. Did your interest in really focusing on nutrition to the point where you figured out how to formulate supplements for the pet space? Does that all come from the same sort of thing? Or have you always been interested in pet nutrition as a tangent alongside your veterinary interest?

Dr. Dulake: I think it came alongside when I started to do the acupuncture and looking at different herbs on the human side. You're right -- in vet school, we don't have much focus on nutrition. The two things that stood out to me is, we don't have much focus on nutrition, and we don't have much focus on dentistry. We talk about dental issues and nutrition all the time. That is a shocker to me. It's needs to be changed in vet schools.

With nutrition, a diet is balanced to make sure that you survive. I'm making supplements to really make sure that pets thrive. You can't really address certain body systems with just a diet, their basic food. If your pet has cardiac issues, okay, well, here's some taurine and COQ-10 to get on top of that. Okay, your dog has maybe immune issues -- add some mushrooms on top of that. The basic diet is obviously necessary. It's just basic. But I think adding in the supplements on top of that, is the future of all pets as it should be for humans and pets, because you just can't fit everything and all these herbs and everything like that into a regular diet.

I'm just very excited about the supplement space and all the products that are going to be coming out. There's always new ingredients and it just makes me very excited about the space.

Beaton: I think that's well founded because there's so much going on in this space right now. I think it says something about the space that the big players are sniffing around and going, “You know what, this probably has some legs, and this might be something we want to throw some money behind.”

Case in point General Mills coming in and being like, “Hey, this supplement space, that might be a good call for us. Let's see what's out there.” What does this kind of acquisition mean for Fera Pets, because obviously, General Mills comes in with money and resources and probably a lot of potential for you guys to grow further. What was really the decision point and the opportunities that you now have with backing from somebody like this?

Dr. Dulake: As I was saying before, I wasn't really looking to sell the company at that time. We were just shy of six years. But the more I talked to General Mills, and the vision that they had for all their brands … for us, they wanted to see our products in the homes of every house in America and on the shelves. We were going to be a generational brand that was going to live on way past my time. Because I've seen them do that with other brands, I just thought, “Okay, I created Fera, and I believe in it so much that even if it's not going to be completely mine anymore, I do feel that they are the ones that can help me take it to the next level and really reach the audiences that I want to.” At the end of the day, I didn't do it for the money. I really did it because I wanted to better the lives of all animals. I think, when they truly believed in us and said, “You guys are going to be a generational brand.” I thought, “Okay, I think this is who I want to work with. They believe in us.” Everything lined up.

At the point, I was at two, yes, we had a couple employees, but I knew that we needed a big partner to really get us to the next level. Ever since I founded Fera, I was always excited about the product development side of the business -- that's always what excites me. I love learning and reading the papers of how effective things are, and making the final product and doing palatability testing -- everything with product development is what excites me.

When we first started, I realized, okay, to actually make this thing work, I have to learn how to market the products and sell them to reach the broader audiences so that we could continue to grow. I wouldn't say now that I'm like a marketing expert, but I have learned a lot over the past seven years. In order to grow, I had to start an influencer marketing program on Instagram. Then I helped oversee Amazon agencies and my cofounder always jokes that I could start my own Amazon agency, because that's how deep I am in the process of it all. I like overseeing Google ads and Facebook ads and email, and all these Chewy promos and all this stuff. I've learned it all.

But it’s not what really excites me. I really want to get back to the product development side of things. With the help of General Mills, not only do I have the resources from their internal team, which was amazing, and they have this team called Emerging Brand Center of Excellence (EBCOE), and they're fantastic group of people. Each person has a specialty. One person focuses on product development, one person focuses on supply chain, and another focuses on brand design. They have so many different people internally that can help us with all the different hats that I wear. They're also going to help us hire a team and funding and all that stuff. But I think I'm the most excited about expanding our team even more so that I can focus back on the things that I'm truly passionate about, which is creating the products and creating more content so I can reach more audiences and educate pet parents.

I think there's so much confusion out there, especially on social media of what foods to feed and what's toxic. There's just a lot of confusion. I've told them from the beginning, I want to focus back on the products. I want to make the content to really educate pet parents about nutrition and ingredients and about diseases and Eastern medicine, Western medicine, give back to the pet parents so that they can really focus on their pets well-being. I want to promote longevity for all these pets.

For me, it was the turning point -- do I want to continue growing slowly and really focusing on marketing and all the aspects that I'm not passionate about. Or if I go with them, they're going to allow me to build a team and give me the resources, so I can go back and focus on what I truly enjoy. That was a big decision maker for me.

Beaton: Now, you said the magic word, educate. I love a good education conversation. What I'm interested in is what are pet owners going to veterinarians with in terms of questions about supplements? Is it a lot of very one-on-one stuff? Are they transposing what they know about the human supplements that they take? Or do they have completely off-the-wall questions at this point?

Dr. Dulake: I think it depends on the pet parent. A lot of times, the pet parents that are more open to supplements, they're already taking the supplements themselves. They're usually more familiar with certain ingredients. But I would say that in the vet clinic, I think that people are asking more about -- is it safe to take this supplement with this drug? They will bring in some bogus questions sometimes and just,” I saw this on Tik Tok. I saw this from this person that's not even a vet and they said to do this.”

There are a lot of things out there that need to be addressed. I know a lot of vets that are already trying to do this. They have their platforms on social media, and they are trying to get accurate information out there. It's hard. It just takes time. The pet parent also must be willing to listen to different vets and see the consensus. There's a lot of information out there where even vets can’t agree on raw food, fresh food, there's so many topics that are controversial. It's a very confusing time for the pet parent.

I'm looking forward to when I will have the time to start doing those education sessions.

Beaton: Since we’re already talking about it, I think this is a good transition into the future of Fera Pets. What is it you're most looking forward to? We've talked about what you're looking forward to personally, but for the business of Fera Pets, and for the supplement space in general, what does it mean that these kinds of acquisitions are happening, and investors are this interested in the supplement space? What do you expect to see in 2024? And what are you most looking forward to seeing happen?

Dr. Dulake: For 2024, we have high growth goals. If you look at the pet space, over 70% of pet supplement buyers, they're online. That was another reason why General Mills liked us because we are like 90% e-commerce. We haven't really focused on retail at all. I think the online space is where we are focusing on. The growth of that space is going to be more e-commerce. Watching what brands really prevail online this next year is going to be interesting.

For Fera, again, I'm really into the product side of things, but we have four new products that we're coming out with this year. We have Collagen-Plus, which collagen is very trendy on the human side. But for pets, collagen helps many different body systems. We have a Collagen Complete, where we have five different types of collagen and one powder. And we have a whole food multivitamin, mainly because we wanted a multivitamin that didn't use synthetic vitamins, because whole foods are more bioavailable.

We have a postbiotics product coming out just to really complement our pre- and probiotic powder that's already out there. Our postbiotic has organic herbs that also help with the gut wall integrity, to really make sure that the gut is working optimally. I'm most excited about we have a balm coming out. The reason why I'm excited about this is, one, it's kind of our first step in the topical space and we may expand further into the topical space. But the reason why I chose to create this balm is because I found a probiotic strain that had clinical studies around improving hotspots canine atopic dermatitis.

Again, when I see an ingredient, I create a product around that ingredient. This probiotic can be used topically. I said, “Okay, what's the best way to get this probiotic onto a pet’s skin?” We've mixed it with all organic herbs that you can use topically. It’s the first balm that is USDA organic that has a probiotic strain in it that has clinical studies on the skin. We're very excited about that.

I had to explain this to General Mills, because they were like, “Do you guys really want to go on the topical space?” And I said, you know, when I look at body systems, I'm not looking at it as an oral vitamin. We’re going into a new space and we have to look at it carefully. For me, I'm making a supplement, whether it's goes on the skin or goes in the body, and they're all helping one body system.

When I'm creating this balm, it's for the skin and coat body system. So yes, you should take fish oil for coats but you should also use the balm when you have hotspots and little irritations. That’s just the way that I look at the supplement space is by body system -- what will help that body system holistically live its best life?

We're also going to continue to ramp up our efforts to minimize our environmental footprint and focus on sustainable business practices. I have a really, really great team member that focuses on all our sustainability efforts. She's great. We also are going to be expanding into distribution channels that will enable us to introduce our products to new audiences and strengthen our presence out there because it's about getting in front of more pet owners.

We have a very sticky customer. We have 70% repeat purchase rate. Once people find us, they are obsessed. It's about getting in front of more pet parents and goes back to the feedback that we hear from all our customers. They really see a positive difference.

We did a survey on customers that have used our products at least twice. One of the questions we asked was, “How many of you see a positive difference in your pet after using our product for at least four weeks?” And 96% of our customers said they saw a positive difference.  I'm excited to get out there and to show more pet parents that the supplements work, they can help your pet live a better and healthier life.

Beaton: Well, thank you so much for being on the podcast today. The pet supplement space is a hugely growing segment right now. There's a lot of movement, there's a lot of investment and there's a lot of evolution to keep track of. It really has, as you said at the beginning of the episode, that you initially started with a hip-and-joint chew because you felt like that was what you needed to do to get into the space. I feel like we're so far beyond just a hip-and-joint chew now in the space that it's been interesting to see it evolve and see what supplement companies are choosing to do and a small company like yours. Especially with you being a veterinarian, there's just so much that you have touched on in terms of what the supplement segment is doing right now.

It's just been great to talk to somebody who started a company in the space and has insights into what makes it so attractive to others looking to invest. Before we go, let's do a little plug. Where can people find more information about you and more information about Fera Pets?

Dr. Dulake: If you have any questions or want to reach out to me, you can find me on LinkedIn, Michelle Dulake. Please check us out. You can go to our website, ferapets.com. Go to our About Page. There's a founder video that shows me and my cofounder and shares our story and just check our products out.

Beaton: Perfect. That’s it for this episode of Trending: Pet Food. You can find us on PetfoodIndustry.com, SoundCloud or your favorite podcast platform. You can also follow us on Instagram, @trendingpetfoodpodcast. And if you want to chat or have any feedback, I'd love to hear from you. Feel free to drop me an email: [email protected]. And of course, thanks again to our sponsor AFB International, the premier supplier of palatants to pet food companies worldwide offering off-the-shelf and custom solutions that make pet food, treats and supplements taste great. Once again, I'm Lindsay Beaton, your host and editor of Petfood Industry magazine, and we'll talk to you next time. Thanks for tuning in!