Issue #40

January 16th, 2024

Quick Hits:

🏈 Who’s your favorite football player?

🐁 The billion-dollar opportunities in serving specialty pet parents

🐕 Would you work here? Of course you would!

💪 New year, new me - this is the year I finally get in shape.

🐹 You are not going to find a better headline than this - “I spent over $200 to immortalize my dead pet hamster — as a stuffed stripper”

🇺🇸 Which state has the most responsible pet owners?

‘TIS COLD OUT THERE! Much of the US is currently experiencing bitterly cold weather. Many of our pets are not equipped to deal with these frigid temps. Please keep your pets indoors, bundle them up when you go outside (include booties if possible), and watch out for salt rock and antifreeze on roads and sidewalks, as both are harmful substances.

• Katkin - The UK cat food producer has secured a new investor.

• More than cats and dogs - About 25 percent of pets in China are exotic animals such as birds and reptiles.

• CES Show’s best new tech - no, not for you - but for your dog.

• New SVP - A former leader at Mars Petcare has joined the Wellness Pet Company.

This week we interviewed the legendary Jim Dougherty, the founder of PetSmart & Petsense. We had so many questions for him, we had to split the article into two parts, so stay tuned for part 2 next week! If you want to read more about his story, you can purchase his new best-selling book here.

What were you doing before PetSmart, what attracted you to start a business in the pet industry?

I had several businesses prior to starting PetSmart. I started and operated several bike shops in the San Diego area, an excavating company, an indoor hydroponic alpha-sprouts business, and a mail-order business.

The business before PetSmart was the first-ever big box retail pet store called Petfood Supermart (the early 80s). It was owned by a large feed company based in California however I built and operated the business for them in Las Vegas/Phoenix.

In 1986, you launched PetSmart, what was the pet landscape like at the time and what did you see in the market that made you decide to open PetSmart?

At the time, the pet industry was an $8B industry mainly consisting of small owner-operated stores that sold a limited assortment of foods and also sold pets. 

95% of dog food was sold in grocery stores. Our objective was to convince the grocery store customers to buy from us. We included the grocery brands along with a variety of premium dog food.

Your wife was an integral part of helping you build PetSmart, what was it like working with your wife? What were some challenges you faced together?

My wife, Janice, previously worked in the grocery business and was familiar with the operations/customer side of the business.

Challenges: Store hours, UPC codes, computer system, and allowing pets in our stores.

By 1994, that's less than 10 years after opening, PetSmart had 100 stores across the nation. How did you manage to scale so quickly?

PetSmart hired talented associates with a background in the grocery industry and also knowledge about the many facets of running a retail business.  

We grew quickly and the suppliers were having to rethink their distribution process as well as manufacturing companies, to keep up with the demand for products at PetSmart.

Were you ever concerned about the competition (Petco for example) or did you think, “there's plenty of room for everyone to grow”?

Petco only had one store, and it was not of the scale it is today; it actually had a mail-order component of its retail operation. It was located in LaMesa, California.

Our biggest competitor at that time was the grocery store.

There were only small owner-operated stores in the early days; there were no big box pet retail superstores. It was a small industry ($8B sales). There was certainly a pent-up demand from customers and plenty of room for growth.

In 2005 you launched Petsense, what was the idea behind it? How did you find working on two businesses simultaneously?

Originally, PetSmart was thought to have had the mission to  “put all the small owner-operated businesses out of business.” I decided to change that mindset by developing a plan (along with some trusted colleagues from PetSmart) to start a pet retail store (Petsense) on a much smaller scale and gear it to customers in underserved, mostly urban settings (at the beginning). Thus putting an end to the idea that PetSmart was in business to put the “little guy” out of business. That was never the case.

In 2016 you sold Petsense to Tractor Supply Company. Having one successful exit is extremely difficult, having 2 is almost unheard of. What do you think was your “secret sauce” in building two successful businesses in the same industry?

First, a simple philosophy of listening to the customer; give them what they want, not what you think they need. Second, creating and maintaining a culture within the company of passionate associates who understood pets and pet owners. Lastly, getting the attention of the grocery customers and convincing them we understood pet food and were eager to demonstrate the differences in pet food (premium brand advantages).

We look at average household income, the percentage of household pets in the area, and if we can get a good supply of groomers for that area.

• Free-roaming cats no more - A North Carolina town decided it would fine owners if their cats are unleashed.  

• Reopening in BC - After a fire destroyed a large portion of it, a reptile rescue center is seeing delays in re-opening.

• Does your dog enjoy some chill music? - This Japanese startup believes so.

• Paw Patrol - Meet NYC’s cutest firefighters.

• Puppy Bowl - Here are some of the cuties taking the field in 2024. Also, meet some extra special cuties!

• Capy-ccino - In Japan, you can enjoy a cafe with a capybara - yes, that’s right, a capybara cafe.

• But can he sing? - Meet Pebbles, Simon Cowell’s latest addition to the family.

PAWS right there!!! Don’t forget to subscribe 👇👇

3 key insights from Jim Dougherty

When you launched PetSmart, you had plenty of naysayers. What is your #1 piece of advice for young aspiring entrepreneurs starting a new company today dealing with naysayers?

Don’t let the naysayers “get between your ears.” Don’t lose focus on the end game – to open your business.

You will fail – it’s part of the process, no matter how much planning goes into your project. Failure is part of the road to success. Learn from failure – it’s an opportunity to do things a new way.

How did you fund PetSmart in the early days - and as the company grew?

Funding is a difficult process, especially since we were trying to raise money in an industry that few people were involved in from the investment world. There were no historical facts and figures to show investors. We were basically doing something never done before. Our challenge was supplying potential investors with a business model we had just developed and “hoped” would work. Plus, supplying sales and profit margins.

We spent an enormous amount of time just explaining our concept. Strangely enough, what seemed to perk the interest of potential investors was the fact that if they owned pets, they seemed to be more interested. We had a passion for pets, and it seemed they did too.

How do you prioritize innovation and stay ahead of the competition in the rapidly evolving pet industry?

It was easier than one might think. No one had done anything like PetSmart, and with the help of passionate associates and management, the ideas were simple. We listened to the customer and what they wanted. Pet adoptions were huge and kept customers coming back. We created a one-stop shop for our customers: grooming, pet food, toys, leashes, collars, etc. The ideas were endless.

How did you approach building a strong brand for PetSmart, and what role do you think brand identity plays in the success of a business in the pet industry?

No one had built a pet retail superstore. We knew we needed “pet” in the name, and at the time, “mart” was a familiar term, such as “K-Mart and WalMart.” Customers could associate “mart” with shopping in a big, one-stop shop.

Your customer base will determine your brand, i.e., good service will most likely equate to building your brand.

• Hit the target - Boat to Bowl is now available at Target

• The full arch - Arch, sustainable and hypoallergenic pet nutrition, just announced 2 new products.

• Brand of the year - Kelly & Co’s just received the prestigious award at the World Branding Awards in Vienna.

The eternal question…

You reached the end, you deserve a treat 🍖

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Finally,

What was the goal of the duck detective?

To quack the case!

See you next week!

The Woof is a weekly newsletter dedicated to covering the pet industry.