Creating The Pet Industry’s Most Iconic Brand!

Issue #53

April 2nd, 2024

Quick Hits:

🌸 This rescue dog inspired her to start a flower company

👎 PetIQ has closed 149 veterinary practices located inside stores of partners

✈️ At American Airlines, your pet no longer counts as a carry-on

💤 So how much sleep does your dog actually need?

💜 Private equity firms love vet clinics, but do vets love private equity firms?

💰 Old dogs can inspire new business models

This week we spoke with a founder who is responsible for launching one of the most iconic pet brands ever! Joe Roetheli is the creator and co-founder (together with his wife Judy Roetheli) of Greenies, even if you’ve never had a pet youre surely familiar with the brand. We caught up with Joe to hear his story and learn about his new venture Yummy Combs.

You grew up on a farm on the edge of the Ozarks and earned your Ph.D. in agricultural economics, yet you end up together with your wife, Judy Roetheli launching Greenies® which became the #1 dog treat in America, how did this come about? 

I have been an off-the-charts dog lover since age 4.  We had a farm dog who was also our pet—my pet, in particular.  He was killed as a result of a farm accident when I was 4. This left a huge permanent scar on my heart for dogs. Now, let’s jump forward almost 4 decades. My wife and I have two sons. We told them that for their 10th birthday, they could pick out a dog, as long as it was in our budget.  They both loved Samoyeds, so each got one. Over a few years, both Ivan and Katie developed horrid halitosis. Judy, my wife now of over 50 years, bought many products from pet shops and vet clinics to deal with the halitosis. She made no progress. She then had this crazy idea that since I had been managing research, development, and commercialization for the Federal Government for nearly 20 years, surely I could solve the halitosis issue. A bit tongue in cheek, but after she chased me around the kitchen table with the rolling pin, she finally knocked enough sense into me that I took a stab at solving the issue. 

What made you decide that this product was something worth pursuing and scaling? How did you figure out the formulation? 

I accidentally got help from my dentist at the University of Missouri-Kansas City Dental School. He had access to the library, and he got about 4” stack of journal articles that I read. I used a few ideas from this. Then, I made contact with a Board-Certified Veterinary Nutritionist with a Ph.D. in Physiology who helped refine the formula that I created in our home. I wanted to make sure I did no harm to our dogs—or any dog! We built a formula with over 50% protein. Judy came up with the idea of the shape—a toothbrush on one end and a bone knuckle on the other. I wanted to injection mold the product, but dozens of injection molding specialists told me that was simply impossible.  But, I have a distant Swiss relative who has been referred to by a seasoned sports reporter and a talented travel reporter as likely the greatest endurance athlete ever. His philosophy is: “Impossible is just a bullshit word; anything is possible if one is willing to pay the price”. So, we kept pursuing this and finally, a molder with only an 8^th- grade education, one hand, and my prodding figured it out, so Greenies® was the first injection molded dog treat and the first to earn the coveted VOHC Seal of Approval. Today, many dog treats are injection molded.

You had no prior "business experience" was it a learn-on-the-job scenario? What were some early mistakes that you made that stuck out to you?  

Yes, it was on a ‘wing and prayer’! I used the learning I had from growing up caring for livestock from a very early age, 3 degrees from Agricultural Colleges, and the experience working side-by-side with some very high-level business leaders that taught me much while I worked for USDA. As a family, we sacrificed greatly over 3 years before we achieved appreciable sales; how we survived those years with no income and only meager savings is still hard for me to comprehend today. In fact, our sons had part-time jobs, and they sometimes had to use their paychecks to put food on the table for the family to have anything to eat. I can assure you that a diet of mainly saltine crackers and water is not what you desire to have long term. Yet, we had much of that for over 3 years!  

 We made many mistakes—fortunately, none were ‘fatal’ or so big that it destroyed our entrepreneurial spirit. One early mistake occurred after we returned from our first trade show with $150,000 in orders; that was 6 months of production capacity. So, we had to secure more molding equipment but we had no financing—I finally talked to an equipment lease company to provide a molding machine and mold. It was on the mold that we got ‘too smart’. We coated it with Teflon to deter sticking, but the result was terrible sticking. We had a very generous supplier who went way out on the limb for us on our accounts payable, because we could not get bank financing. In fact, our first real bank loan occurred the month after we sold $1 million of product. 

On another occasion, we had a man who begged us to allow him to distribute Greenies®. We gave him rights east of the Mississippi River. What did he do?  He went out to capture as much of the territory as he could West of the Mississippi and did little to the east. On one trip to seek financing, I accidentally wore one brown shoe and one black shoe. But that trip ended like many dozens of other financing endeavors—as Judy would say, well, we gave those bankers the best laugh they have likely had in quite a while. 

You launched in 1996 and by 2005 you were already selling 315 million Greenies per year, what do you attribute that massive growth to? How did you create relationships with the major pet retailers? 

In short, we were at the right place, at the right time, with the right product to solve a problem manifested by many dogs—halitosis. We believed in ourselves and others. We worked with a philosophy that if we treated our employees well, they would treat the customers well, and that would make the investors well!  Good people were at the heart of our success — employees, suppliers, and buyers. Our second distributor was an amazing case. He was in his early 20s.  He had dropped out of college, junior college, and diesel mechanics training.   

We spoke with him.  He was passionate, persistent, and enthusiastic about selling Greenies®. I suggested to Judy: let’s hire this guy! He can at least deliver product for us. Five years later and with us having 3-4 dozen distributors many with dozens of salespeople on the road, this young man out-sold them all by himself! The success came from great people and a functional product with great taste that solved a problem, we were able to successfully brand it.

Mars, the biggest player in the pet space bought Greenies back in 2006 for an undisclosed amount, what was it like partnering with such a massive multinational corporation?  

I had worked with many high-level business individuals and in high-stress environments, so I was comfortable in the big company sphere. Mars was and still is the largest pet food/treat manufacturer in the world.  We talked with them some months before the sale. Then there was dead silence for those intervening months.  Ultimately, on a Thursday afternoon, Mars had an intermediary contact us wanting to know if we’d talk, and if so what their ‘rules’ were—one was they wanted to move fast. We asked about compensation, but the intermediaries had no idea. 

So, Judy and I told them to go back to Mars and get a ballpark idea, plus we sent our own standards under which we would talk. The next afternoon the intermediary called back about 3:15 with a number. We were neither overly impressed nor overjoyed with the number but finally agreed we would talk, but if the price went down one penny we were leaving. So, I then noted that the previous day the rule was they wanted to move fast. So late on that Friday, I asked if they wanted to meet the next week or the following week. The response was no, negotiations begin at 8:00 am tomorrow morning in New York City at place XYZ.  One week to the day after the first call, all documents were signed between the two private companies for Mars’ acquisition of Greenies® and Pill Pockets®. The Federal government then took almost 5 weeks to simply approve the deal.

What made you want to launch another similar product Yummy Combs 4 years ago? 14 years after you sold Greenies? How has the experience been now so long after your first business, what have you found different this time around?  

As I noted at the beginning of this interview, I am a passionate dog lover!  I have been quoted numerous times, as having said: “I can exist without a dog, but I can’t live without a dog”. I simply had more ideas for the health, welfare, safety, longevity, and enjoyment of dogs. That is one of my most ‘burning desires’ in life!  I had ideas to improve oral care; 80% of dogs over the age of 3 have some form of gum disease from plaque and bacteria that harbors in tartar, a precursor to gum disease which is a precursor to vital organ damage.

Yummy Combs® provides a revolutionary solution!  Second, gulping, choking, and bowel obstructions have been traumatic welfare issues for dogs with bones and dog treats for a century. We conceived 4 innovations to deter these issues. One vet from Southern California recently reflected that their clinic average nearly one choking issue per day! Yummy Combs® delivers an advanced safety solution. A third major issue from my perspective is weight control. Studies document that 54% of dogs over the age of 2 are overweight. 

In addition to superior nutrition, we reversed the traditional protein-to-starch ratio from 0.35 to 7—a 20-fold reversal. How many people do you know who want to lose weight that go on a starch or carbohydrate diet? I know many that go on a protein diet. Yummy Combs provides a weight-control solution! Today there are many more dog treats on the market than when we launched Greenies®. I have this burning desire to help dogs, so that is the joy of working with my ‘best friends’!

 What was it like launching through COVID-19, how did you overcome those obstacles?  

COVID was a really high hurdle. Most stores were closed. We delivered our first Yummy Combs® to PetSmart in the third and fourth week of March 2020, and our first shipment was delivered to the veterinary channel the first week of April. Days later the pandemic caused havoc. We were behind the eight ball in terms of not being very attuned to social media. Some product went out of date before they sold, so we had to replace that. However, we have made progress and provided a dog treat with 95 benefits/attributes to help dogs live healthier, happier, safer, longer, and more enjoyable lives!  That is gratifying to us!  

We say:  “Yummy Combs® is . . . Hybrid Wellness . . . for dogs! A hybrid is combining two elements to achieve a better outcome. Wellness is holistic health. Try em—your dog will love the taste and you will appreciate the benefits!

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3 Business Lessons From Joe Roetheli

Best advice for a young entrepreneur who wants to enter the pet space with a product or service but is maybe unsure what to do?  

Know what you are getting into before you start. It may sound like a ‘piece of cake’, but it is not a cakewalk! Financing is excruciatingly difficult to secure; banks loan money to companies after the major risks have been overcome.  There is much competition. Validate your claims. If you are not willing and able to take big risks, don’t consider being an entrepreneur!

I'm sure there were times during your first venture that you thought about quitting, what made you persevere and continue moving forward?   

OH, yes many times especially for Judy who is not as much of a risk-taker as I am. What got us over many a high hurdle was friends, traditional mentors, and family. The most significant mentor was our mental mentor, Serge Roetheli, whom I referenced earlier who was running the distance of the circumference of the world during our early Greenies® days. I told Judy dozens of times that if Serge with his only team member, his wife on a motorcycle, could overcome all the hurdles he faced in running that surely we could get over our much smaller hurdles, and, that really worked to our advantage!

I've heard you say that your unique work culture is your most valuable resource, how does it differ from other companies and what are some key traits you look for in new hires? 

We seek individuals with talent and above-average interpersonal skills. We want people who are problem solvers and have a record of success. One of Judy’s favorite interview questions is “If you were a bird what bird would you be and why”? One of mine is to ask:  Why are manhole covers round (borrowed from someone else)?

We want people with passion, persistence, and enthusiasm who simply refuse to give up. People with values similar to ours. If you can’t handle teasing and jokes, our place is not for you, and you are not for our place. We have seen many miracles in our lives and the lives of others, and we hope to see many more! 

You reached the end, you deserve a treat 🍖

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Finally, my dog takes a ruler to bed each night.

He wants to see how long he slept.

See you Thursday!