The emergence of the discriminating consumer is rocking the food industry. ‘Front of the box’ marketing is giving way to ‘back of the box’ facts, as nutritional information, place of origin, and fresh ingredients are usurping traditional selling points like loveable mascots and catchy jingles.
This shift, it turns out, extends beyond the realm of human food. Pets all over the world are rising up and saying no to dry, bland kibble… sorry, check that… pet owners are the ones rising up and saying no (though you can bet their pets are behind the movement). Instead, they’re opting for what’s best, nutrition-wise, for their furry companions, in the same discriminating way they’re choosing what’s best for themselves.
“People are absolutely in love with their dogs and cats,” says Peter Kaufman, CEO of Buddy’s Kitchen, a ‘next-generation pet food manufacturer’ from Aurora, Ontario.
“Traditionally there used to be a lot of mystery in what people fed their pets. What our company creates flies in the face of that. We’re like the craft brewer of pet food – small-batch, attention to detail, local ingredients, always made with care and passion.”
The passion that goes into Buddy’s products flows directly from Kaufman, who goes by the title ‘Chief Dog Wagger’ rather than CEO, and insists his is “not just a pet food company.”
He started Buddy’s in his basement at age 27, focusing strictly on nutraceuticals – science-based nutritional supplements for issues like immune deficiencies and oral health problems. Since then, he’s grown his operations with the goal of creating ‘life-changing food’ for pets.
‘Life-changing’ might sound over the top (unless maybe you’re a dog), but it does reflect the high standards that drive the company. Kaufman wants Buddy’s products to be top quality, all-natural, and with ingredients sourced locally; no different than what a person might expect from a high-end restaurant.
Today, Kaufman has grown and diversified his company to include additional business segments: Buddy’s Kitchen branded products, which include fresh ‘frozen’ food called FreshRx™, as well as treats under sub-brands LOL™: ‘Lick-Out-Loud’ and ‘Off-Leash™’, and private-label treats and snacks for leading pet brands in the US and Canada.
It’s this latter segment – the private-label products – that’s really driving Buddy’s growth. Essentially the company lends its expertise to larger pet food companies and retailers that don’t have the resourcefulness or agility to create new and innovative pet products themselves.
“We work with the established US and Canadian brands to help them come to market with innovation, a lot faster and more cost effectively than they could do in-house,” says Kaufman.
“Bigger companies can sometimes be risk averse when developing products, but at Buddy’s we encourage making mistakes. We try a lot of things, and if we fail, we fail fast. Stop the insanity and move forward. If you’re not making mistakes, you’re not trying.”
The approach is paying off. Since 2011, Buddy’s revenues have grown from $735 K to $5.1 M in 2015. To keep the momentum going, Buddy’s recently opened a state-of-the-art facility in Aurora where the design focus is transparency – visitors can come in off the street and see Buddy’s employees at work making gourmet food and treats. They can even participate in a tasting (it’s human-quality pet food, remember!).
“With our significant investments in innovation, capacity and quality assurance,” adds Kaufman. “We can now play in the same sand-box as the big boys with additional export opportunities waiting for us in the EU, Asia and Australia.”
Export Development Canada (EDC) was able to support this growth by providing loan guarantees to Buddy’s business bank. With EDC’s guarantees in place, just under $850 K in this case, Buddy’s bank could feel more comfortable lending the Canadian small- to medium-sized enterprise the money it needed to purchase equipment for the new facility, and to meet the other financial requirements that come with growth. EDC also used its market connections to introduce Buddy’s to a potential major buyer in the U.S.
“Buddy’s Kitchen is about innovation and leading with speed, so we’ll do whatever we can to enable that kind of growth,” says Kevin Sullivan, EDC account manager for Buddy’s Kitchen. “Because small and medium-sized companies (SMEs) don’t have all the assets and security of a larger company, it can be tough for them to get the financing they need to expand internationally. If we can lend them our size to provide that boost, which is all Buddy’s needed, that’s exactly what we’re going to do.”
For more information on how EDC was able to help Buddy’s Kitchen, visit Newswire
1) What was your first export sale?
Starting my business in Montreal, the New York / Vermont border was only 30-45 minutes away. My first export sale was to a company in Waterbury, Vermont.
2) How did that first export opportunity arise?
Running a small business, I recognized immediately that my chances of landing clients were greater in the US than in Canada. With the internet becoming mainstream; this made the opportunity possible.
3) When it comes to exports, what do you know now that you wish you knew then?
Government regulators, custom inspectors…the whole process of shipping products across borders is an ‘energy vampire’ – both personally (as the owner) and on the limited resources of SMEs. Hire the best experts and custom brokers you can afford.
4) How has the trading world changed since you started in business?
Technology has created a borderless marketplace with immense opportunities for growth. We can now share our ‘made in Canada’ treats with pet parents around the globe who want the healthiest and safest foods for their dogs and cats.
5) What is the #1 thing new SMEs need to know about export and trade?
The #1 thing new SMEs need to know is to design their products and services, out of the starting gate, for the world. Technology has democratized markets and Canadians need to think big and not follow a stay at ‘home’ attitude.
Canada is a brand on its own with tremendous equity. Canadian SMEs need to recognize and leverage this free ‘gift’ of equity into their export and trade strategies.