Posted on 06/12/2007 7:28:38 PM PDT by JACKRUSSELL
The tainted pet food scandal that rocked the industry proved to be a defining event for Secaucus-based Freshpet.
Three months ago, sales of the manufacturer's line of frozen dog chow were increasing steadily. Then cats and dogs across the country began dying of kidney failure after eating chemically contaminated food from China, and Freshpet's business soared.
While major pet food companies were recalling millions of containers of moist pet food, sales at Freshpet were more than doubling, said principal Scott Morris. The company's dog dishes are now sold in nearly 1,000 stores, compared with 350 before the scandal erupted.
"We were doing very well before," said Morris. "But it's changed the industry. It's changed consumers."
"The No. 1 phone call we get is, Do you make it? Are the ingredients from the U.S.? Is there anything in it from China?" Morris said.
Freshpet executives contend that's good news for dogs, arguing that their product is tastier and healthier than dried food or canned or packaged meat, which make up the bulk of the dog food market.
And though Morris says the company hasn't tried to exploit the pet food scandal, he is certainly happy with the boost it has given his company.
"We are kind of revolutionizing pet food," Morris said. "Our goal is to change the way pets are fed in America.
"If your pet is your best friend, it's hard to pour out some dry nuggets once a day and say 'There you go.' Would you feed your kid that way?"
The American Pet Products Manufacturers Association says many dog owners would, and do, feed their pet that way.
Dry pet food makes up 60 percent to 65 percent of the $15 billion to $16 billion dog food market, said manufacturers association President Bob Vetere. Wet or moist dog food, which is packaged in cans or pouches, makes up about 35 percent, he said.
Freshpet is on the "front edge" of the frozen food trend, which has just emerged and has 1 percent to 2 percent of the market, Vetere said.
The first refrigerated dog food exhibits appeared at the association trade show two years ago, he said. And about half a dozen frozen food companies have since asked the association for a special refrigerated section to display their wares at the next show.
"It's starting to grow," Vetere said. "People have tended to humanize their pets, so they are looking to feed them the way you would feed a child. And as a result, frozen foods are catching on."
Freshpet was started in January 2005 by three veteran pet food executives -- Morris, 38, John Phelps, 42, and Cathal Walsh, 35 – after they saw the success of frozen dog food in Australia.
The company now has 60 employees, and executives expect revenue this year of $7 million to $10 million, and to possibly reach $50 million by the end of 2009.
The product line is based on two main brands: Homestyle Select, a meat loaf packaged to resemble a large liver sausage, and Deli Fresh, which looks a bit like meatballs.
Freshpet says both consist of 70 percent meat – beef, chicken or turkey – mixed with carrots, peas and rice. And the healthful message is emphasized throughout the packaging. One slogan reads: "Food for dogs, not dog food." Advertisements depict the pet meat in a setting more associated with human food – it's often shown on a wooden chopping board next to rice, raw carrots and peas in the pod.
"This is almost like you'd be handling deli meats," said Morris on a recent afternoon, cutting through a 4-inch slice of Homestyle Select in a mock-up of a supermarket pet food section at the company offices. "When people open it up, it's clearly real meat. It's not mystery meat."
It's also significantly more expensive than the main competition – about 10 percent more than non-frozen "wet" meat products, and 30 percent more than dry foods, Morris said. A pound of either Freshpet brand, enough to feed a large dog for a day, costs $1.99.
The company opened for business with two employees – Walsh and an assistant – and $875,000 in start-up capital raised by the founders from their savings, taking out second mortgages on homes and raiding their 401(k) plans, Morris said.
The product, shipped from Australia, first went on sale at six stores in British Columbia in spring 2005. Sales took off immediately, Morris said, and by July 2006 Freshpet foods were in about 200 stores in the U.S.
It soon became clear that the company would need its own factory.
"It's a 12-week shelf life," he said. "And you'd spend six weeks on the water."
In August 2006, Freshpet opened a $13 million factory in Quakertown, Pa., that formerly made meatballs and hamburgers for Landis Meats Co. And in November, a private equity fund invested in Freshpet and now owns half the company.
"Sales were coming along very nicely," Morris said. To encourage stores to stock the food, Freshpet provided them with display refrigerators at company expense. Freshpet so far has placed nearly 1,000 4-by-7-foot refrigerators, each of which cost about $2,000, he said.
The tainted food scandal broke in March. Authorities say pets were likely sickened by the chemical melamine in pet food that included wheat gluten imported from China. Among the companies that recalled wet pet food because of the contamination was Menu Foods, which has a plant in Pennsauken.
Freshpet suddenly got a wave of customer inquiries, but opted not to exploit the scare, Morris said.
"People see profiteering in a situation like this – it's poor behavior," he said. "And it's not the kind of company we are. ... It's almost borderline unethical. We just felt like we wanted to celebrate more of what we were, versus trying to scare people into buying us."
The company merely put a sticker on each in-store refrigerator, stating that the food was made by the company, the ingredients were locally sourced, and it didn't contain wheat gluten.
"You never want to benefit from somebody else's issues," Morris said. "We had a great idea and proposition and a great product, and we should be talking more about what we are, versus what the issues are in the market, and what we are not."
...it’s hard to pour out some dry nuggets once a day and say ‘There you go.’ Would you feed your kid that way?
My Mom did. But she did put a raw egg on top once in awhile.
Why bother buying this stuff? It takes a few minutes to make up a week’s batch of dog food at home. I do what they do—chunks of meat or chicken, a little rice, and carrots or peas. I freeze whatever is going to be eaten more than two days out. If my dog wants more veggies he nibbles on the grass outside. This is a lot cheaper than paying for someone to put it in a can for you.
Thanks for the ping! Good article.
Good point, but many people feel they don’t have the time, and this seems like a nice solution from a good batch of folks running a good, ethical business.
Capitalism works as long as the consumer is allowed to have all the information.
That is just not something I want to do. I just moved to a small dealer that sells only US, organic pet feed.
Our dog has some health problems that seem to be in better control on the all meat feed I am giving him now .
It is a little more money, but not that much
Exactly, but we need a government that checks imports and then tells us
I had a scare last Sunday morning with Willie the Wonder Cat when he went to a corner of my living room and appeared to pee against the wall, and that’s not like him. When I went over to inspect, I saw no urine but a good amount of blood!
I immediately called the 24-hour, 7-day Emergency/Trauma Veterinary center to tell them we were on the way.
The first thing I thought was cystitis. I lost a cat to that many years ago and Willie had a bout several years ago. The next thing I thought was it some sort of Kidney problem caused by a food problem. Yikes!
After about 6 hours in the “ER” with x-rays, blood tests and urinalysis, the doc diagnosed it as a urinary track infection and gave Willie a prescription for an antibiotic and a bill for about $520 (and yes, it was worth it) and she told me to follow up with my regular vet.
I hadn’t hooked up with a new vet since I moved so I asked for a recommendation noting that there was a cat only vet in my area. This vet was made a hardy recommendation to go see her. The practice has only one doc but she’s one of only about 100 certified feline specialists in the county. Not only did the ER doc recommend her, but when I called my old vet to have them fax over Willie’s and my other two baby’s medical records, the woman I spoke to had once worked for this doc and said she was “wonderful” and “great” and I would really “love” her.
Since I made the appointment (we are going tomorrow) the new vet’s office called me twice; once to confirm the appointment and then again to confirm they received the records, ask me how Willie was doing and about vaccinations and some other questions that weren’t clear from the records as the doctor wanted to be well prepared before our visit. They also wanted to make sure I knew how to get there, if I needed directions, if I was familiar with their website and if I had any questions before our visit. I was so impressed by their professionalism that I wanted to ask if they took “human” patients.
I’ve been feeding my kitties the “prescription” Science Diet, supposedly formulated for cats prone to cystitis, but I have some doubts since the Menu Foods thing, so I’ll ask her if that’s still a good choice and what alternatives I have for Willie and his condition – other brands, US only ingredients, organic, home made and such. Petfresh only does dog food but I would think there are similar companies specializing in cat food.
I’ll post an update on what she tells me.
Wow—how lucky are you to have found such a highly recommended vet!
What a scare you had with Willie—sounds like it could still be related to cystitis problems? Maybe sub-q fluids would help? You can also give them as maintenance maybe once or twice a week even after he is well to help flush out toxins. The antibiotics are very important with UTI’s (they can be very stubborn infections)
If the vet recommends it, please don’t be afraid to do it at home. It is probably the most important thing you can do for a kitty. It helps with kidney problems too.
The cat fountain is a good idea too. I’ll give you a funny tip. My cat’s LOVE to drink out of a tall glass. I leave normal bowls of water, but also a few tall glasses of water and you would be surprised how much they like it—I guess it is the “heighth” of the glass that they like. I use tall plastic glasser with a big opening (they don’t like their whiskers to touch) and they love it and seem to drink more water that way.
“People have tended to humanize their pets”
And not have children.
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