Saturday, October 19

Direct-To-Consumer start-ups are coming for “Big Pet Food”

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New Direct-to-Consumer businesses are stepping in to offer a better end-to-end experience for purchasers. Scratch Pet Food, a new start-up is now joining the movement by offering a better experience to Australian pet owners. Barely two months old, the Melbourne-based start-up had a waitlist of 400 pet parents by the time it launched and is already serving hundreds of dogs.

The $2.8 billion Australian pet food industry is currently absolutely dominated by multinationals. Consumer trust has been lost, with recalls by premium brands such as Advance and BlackHawk after multiple health issues and dog deaths. A Senate report has also just recommended regulation after 100,000 Australians signed petitions.

Big retailers like Coles, Woolworths, PetBarn, PetStock and now Amazon are constantly putting pressure on brands to reduce prices, fund massive and regular sales campaigns – while at the same time copying best selling products and launching them under their own brands, at a lower price. With the mark-ups that occur along the supply chain, raw ingredients can make up only 10-15% of the retail price, pushing manufacturers to compromise or be priced out of the market.

Similar to Everlane and Warby Parker in the US, or Who Gives a Crap in Australia, this is why Scratch only sells direct to customers via a subscription. It takes the large retail mark-up and invests instead in high-quality ingredients and then transparently discloses the recipe.

Traditional dog food from the major players is mostly cheap grains or carbs like potato and tapioca rather than high-quality protein – so they have been happy not to declare ingredient percentages. Many customers would be shocked if they knew the truth.” Doug Spiegelhauer, Co-Founder of Scratch.

Having a direct relationship with the customer also has other advantages. Scratch creates personalised feeding guides for each dog that automatically change through different life stages and they personalise each box to include the name of the dog it is made for. Knowing when each dog is going to need its next box allows a much shorter time from manufacture to dog bowl.

Subscription changes everything for dog owners. It means that you get fresher food that has not been sitting in warehouses or store shelves for months before you buy it. You never run out on a Sunday night when everywhere is closed and you get better ingredients at a cheaper price than other premium foods.” Mike Halligan, Co-Founder of Scratch

The biggest issue with selling pet food online is that it is heavy and therefore expensive to ship. Scratch is currently focused on shipping only to Melbourne, Sydney, Brisbane and Adelaide but is on track to expand to Perth, Canberra and other major cities in 2019.

Existing brands are very much wedged as they are effectively blocked from selling direct to consumers themselves as they would get quickly de-ranged by the major retailers.

Scratch is a collaboration between an experienced pet food industry insider Doug Spiegelhauer and ecommerce specialist Mike Halligan. Both of course are dog lovers! To find out more about Scratch, or to sign up your fur baby for this innovative pet food experience, go to www.ScratchPetFood.com.au.

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