Industry Profile Pets Choice

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Industry Profile: Pets Choice
14th November 2016

By Sandra Pearce



It’s been a busy few months for Pets Choice, with new launches and the acquisition of Tasty Bone. We meet chief executive Tony Raeburn to find out more about his plans for the Lancashire manufacturer

Blackburn-based Pets Choice has huge plans for Webbox, which it acknowledges is already a ‘mass-market brand’. It wants to expand the brand further, with the aim of it becoming a one-stop shop for retailers.

Chief executive Tony Raeburn said: “Although we want to become a one-stop shop, this is not by being an importer or collator of other manufactured products. Most of our products are either produced here or by our sister companies. Webbox is our key brand, and we’re putting a lot of investment into it. Our task is to tell the pet trade about this portfolio.”

To this end, in May at Interzoo it launched Webbox Natural, a natural wet and dry cat and dog food range with a high meat content, vegetables and whole grains, complementing its Webbox Complete range of pet food. It features 40 or so products, including alu-tray wet. “With Webbox Natural, our goal is to offer a complete solution to customers, offering a natural premium product at a great value-for-money proposition,” he said.

Last April, Webbox launched its first range of 30 dog toys into Asda, which has been so successful that more toys are in the pipeline to be rolled out into the pet trade. The treats category also continues to grow, and sales of cat sticks have pushed Webbox comfortably into second place for UK branded sales.

Ultimately, it’s about responding to customer demand. Last year, it surveyed 15,000 pet owners, a core finding revealing that 60% prioritised nutrition over all other factors when buying dog treats. Tony said: “Understanding our customer base is very important, and we are spending more time looking at customers and what they want. You know, the big adage is that dogs are color blind but people want to buy colours. We are spending more time focusing on that.

“We want to offer what our end customers want, which is high-quality products. That is why it’s important for us to enable customers to buy our products throughout the whole industry. Most pet shops are stocking Webbox products already, especially cat treats. We want to help them grow their offering.”


Christmas orders are being taken now. Range includes new products

Many in the independent pet trade carry one or more of the other premium Pets Choice brands, namely Goodwyns, Davies and Oceanic – each offers a point of difference for customers. Davies is the oldest as it began production in 1881, when the Blackburn family manufactured pet food under the family name. Goodwyns offers wet and dry natural holistic foods, and Oceanic (as the name implies) is a range of fish food for dogs. All its brands (and private label) have led to Pets Choice boosting turnover by a fifth last year to £35m. A far cry from an earlier chapter in its history when it hovered close to collapse.

A FANTASTIC OPPORTUNITY
Pets Choice was put together by city investors in 1980, following the amalgamation of several national pet businesses including Thackers Pet Products, Magnet Pet Foods and Chamberlain, Pole & Co. Unfortunately by taking out owners and replacing with management meant the group struggled, ending with several rights issues and a complicated share structure resulting in a staggering 120 shareholders.

In the meantime, Tony had been involved with pet food brand Top Gold, which he sold to Pets Choice. “By 2002, Pets Choice was in a very poor state, and that was when I became financially involved,” he said.

At the time, Pets Choice had a turnover of circa £7m selling dog, cat and pond food, but the bottom line was not healthy. “I had nine months to sort the company out with the late chairman, Charles von Westenholz,” he said. “Because I was involved in other successful businesses, I saw that the management was weak. The product was good, it just needed direction without putting a lot of money into it. So we took a different perspective.”

The business was heavily fragmented, with different brands in different retailers and a whole host of other brands, and Webbox was mostly Chub. “I delisted all the own brands, and decided to go with Webbox as a main brand for grocery and Davies as the main brand in pet shops. We ditched all the others. Those first six months were incredibly hard, but by 2005, we realised we were going to survive and business had started to turn around.”


The Webbox team at Crufts

There was still the issue of the 120 shareholders, which made it difficult to take the business forward. In 2006, after the sad death of Charles, a management buy-out reduced this list to just five. By 2013, Tony was the biggest shareholder. “I was asking the question, where are we taking the business? We had a three-year plan, part of which was to buy this warehouse and build a factory. But by this time, the other investors decided they wanted to sell – most were nearing retirement age. Do I sell out, go the equity route or buy-out? I saw this fantastic opportunity and the years of hard work I’d put in, and decided to take the opportunity to stay on. So then it was a choice of finding equity or getting a partner.”

A logical partner was Hans Jurgen Deuerer, founder of German pet food manufacturer Tiernahrung Deuerer, which had been supplying Pets Choice for several years.  Hans had also invested in Vitakraft. “I knew Hans, he had a reputation for his products and making the best cat treats in the world. He also supplies to most major retailers in Europe,” said Tony. The ensuing partnership has seen an alliance with strong brands and factories in France, Germany, Austria and the UK. As it is, 65-70% of Webbox products are made in the UK.

About 18 months ago, Pets Choice moved into its new bespoke 140,000sq ft office and warehousing facility in Blackburn, in addition to two manufacturing sites (one extrusion and the other for wet food and treats). It is also in the process of acquiring a further site, on which it plans to start work on building a new factory in the next six months or so. “Before we had a warehouse that held 1,000 pallets. Now we can hold 14,000. When we moved here, we did not know whether we could fill it – now it is almost full,” he said.

Depending on what happens with Brexit, production can move if necessary to the UK or Europe. “We are now in a very strong position, and have invested more in the business in the last two years than in the last ten years,” he said.


Webbox Natural has joined the Webbox family

If the pound continues to fall, it will make more sense to manufacture in the UK rather than rely on imports, but at the moment, it is very much a wait-and-see proposition. “It’s still very early days, nobody in government knows, so it’s very difficult for us to know what to do; there is massive pressure on currency, but everyone is in the same boat.”

The last year and a half has also seen a doubling of head office staff – the aim is to do as much in-house as possible, whether it’s design, digital marketing, production, or nutrition. “We are attracting a good calibre of personnel,” he said. “We try and encourage open forum with everyone involved, there is no hierarchy here. Anyone who has an idea can pool their ideas into the mix.”

QUESTION EVERYTHING
Part of the Pets Choice success story is down to the team constantly reviewing what it does, why and how. “We question everything across the business, marketing, anything, we are always reviewing,” said Tony. “We have moved people around in cases where we’ve had the right people but in the wrong jobs. We try to get the best out of everyone.”

At the moment, apart from growing the Webbox brand, attention is focusing on exports which are ‘still quite small’. But that’s because up to now, the concentration has been on getting the UK mix right, he said. “We are now pretty satisfied, and are looking to exports, especially with Webbox Natural, Goodwyns and Oceanic.”


Trade shows are important for Pets Choice – this year at Germany’s Interzoo

To that end, in March Pets Choice acquired Tasty Bone, the manufacturer of nylon edible and rubber chew and play toys. Founder Ken Seymour, who is now retired, had built up a strong business in Australia, North America, Canada and Europe. Tony said: “They export to 20 countries and about 70% of the business is export. We bought their export management, which is being integrated into Pets Choice. It’s all very exciting.

“I am passionate about the Pets Choice business, I live in Essex and commute up every week and I have fantastic loyal staff. Hans and I are not looking to sell in two, five or ten years’ time, which is why we have not gone the equity route. We just want to maximise sales and continue to invest in customer service and the development of the team. We have an ambitious growth target and we are confident that we will see £80m turnover in the next five years.”

He does not rule out further acquisitions, so long as they complement the existing portfolio. “There is no point in acquiring something unless it’s for certain reasons. Likewise, we would not dismiss launching new brands.

“We are a sales-led company. Some companies are operations led, some are financial led, we are sales led, whether it’s right or wrong. If a customer asks ‘Can you do that?’, we do it. Since I have been in business, there are daily battles and you cannot win every battle. Often you go forward three and then back one. But as long as you go forward, that is the challenge.”