Scott Morris, co-founder of Freshpet, shares the challenges and successes of transforming pet food. From convincing retailers to install refrigerators for their fresh pet food products to building a dominant brand, Scott discusses obstacles, nutrition requirements, and the battle with Walmart. Despite economic difficulties and skepticism, Freshpet now has a 96% share in the fresh pet food sector.
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Quick takeaways
Fresh Pet revolutionized the pet food industry by offering refrigerated, fresh pet food to cater to the trend of pet humanization.
Fresh Pet faced financial struggles but successfully navigated through challenges with angel investors and strategic partnerships.
Fresh Pet gradually expanded their retail presence by convincing major stores to install refrigerators and invested in manufacturing capacity and advertising to support their growth.
Deep dives
Challenging the Traditional Pet Food Market
Fresh Pet aimed to reinvent the pet food industry by offering refrigerated, fresh pet food instead of traditional dry or canned options. However, they faced numerous challenges, including short shelf life, high overhead costs, and resistance from retailers to install refrigerators. Despite skepticism, Fresh Pet found a core group of consumers willing to spend more on premium pet food.
Seeking Funding and Overcoming Challenges
Fresh Pet faced financial struggles, constantly seeking funding to finance a manufacturing facility and overcome high overhead costs. They secured investments from angel investors and a significant investment from Tyson Foods. However, they later faced challenges when a new CEO at Tyson sought to bankrupt the company. With the support of their chairman and private equity firm Midocean Partners, Fresh Pet managed to navigate through the financial difficulties.
Expanding Retail Presence
Fresh Pet gradually expanded their retail presence, convincing stores like Kroger, Safeway, and even Walmart to allow them to install refrigerators in the pet food aisle. They started with a few stores, proving the success of their refrigerated pet food, and slowly built their network over time. Despite financial losses, Fresh Pet continued to invest in manufacturing capacity and advertising to support their expansion efforts.
The Humanization of Pets
The podcast discusses the trend of humanization of pets, where pets are seen as more like kids or humans. The speaker questions why, despite this trend, pets are still being fed like farm animals using kibble. The speaker shares their journey of creating Fresh Pet and how they worked with veterinary nutritionists and food processors to develop a fresh, shelf-stable, and sliceable pet food. They also highlight the importance of taste and nutrition in the product, as well as the positive health effects reported by pet owners.
Challenges and Growth
The podcast delves into the challenges faced by Fresh Pet, including the complex supply chain, the need for longer shelf life, and the maintenance of refrigerators in stores. It discusses the marketing strategies employed by the company, such as in-store demonstrations and the use of road warriors to distribute samples and promote the product. The podcast also touches on Fresh Pet's experience as a public company and the ups and downs in their stock price. Despite the challenges, Fresh Pet continues to focus on expanding their presence in retailers and aims for steady growth and profitability.
Freshpet co-founder Scott Morris helped transform pet food by sidestepping traditional kibble and cans, and making slice-and-serve meals that almost looked palatable enough for humans. When Scott and his partners launched the business in 2006, the concept of fresh pet food was so novel that retailers balked at installing special refrigerators for it. So Freshpet provided its own refrigerators, a logistical nightmare that nearly ground the business to a halt. More than 30,000 refrigerators later, Freshpet has a 96% share of the fresh pet food sector, with a customer base of 10 million dog and cat households.
This episode was produced by Carla Esteves, with music by Ramtin Arablouei.
Edited by Neva Grant, with research help from Alex Cheng.
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