Pet Insight Interview with Don McIntyre, CEO, Animal Supply Company

March 2018 Edition of Pet Insight Magazine

How did you decided to work for Animal Supply Co. (ASC) in 2016?

When I first received the call, my immediate thought was how exciting it would be to work in an industry that I’m personally passionate about (I have a Westie and Bichon now and have had dogs for more than 40 years). At Claridge Foods, I worked a lot in gluten-free, and with a daughter with Celiac Disease, learned how having a personal connection to your profession can be an incredible motivator. As I learned more about Animal Supply, I was impressed by many things, including the fact that their founders are still on the board. I knew that we could build a team to make a difference in the pet category.

What have you applied from your experience with UNFI, Claridge Foods and Sara Lee’s subsidiaries?

My past experiences taught me to focus first on two key areas when I started at Animal Supply. First – focus on people. A company is the people. One of the first things we did was focus on employee engagement and training. We started a leadership development program, a supervisor development program and held change management workshops. I truly believe that the more we equip people for change, to lead and to motivate their teams, the stronger we will be. Second – build a common vision. That’s why we focused on developing our vision, mission and values before developing a long-term strategy. Before we could develop the best strategy, we needed to build our teams and unify our culture.

What makes working in the pet industry enjoyable?

The people and passion that everyone in the industry brings to work every day. From retailers to customers to vendors to pet rescues and shelters (like the SPCA of North Texas that we recently worked with), everyone is focused on one thing: the wellbeing of pets. This focus gives all of us in the industry a common cause that we’re all driving towards together. We may be playing different roles, but we have the same mission and share common ground.

How and why did ASC to acquire Bark to Basics?

We’re always looking for the best product offerings and services for independent pet retailers, and Bark to Basics brought both to the table. With Bark to Basics, we were able to broaden our product offerings in the Midwest and Texas and increase customer service through enhanced distribution center capabilities in the Kansas City area.

How did ASC decide to acquire Lads Pet Supplies? What makes Lads Pet Supplies a solid partner for ASC?

The Lads acquisition allowed us to add capabilities in the Northeast and mid-Atlantic, specifically growing brands that serve independent pet retailers, including Fromm, KLN, Zignature, Merrick and Bayer. Lads has exemplified the best in customer service for more than 50 years and shares our passion for pets and focus on strong relationships with customers and vendors. Ron Smith continues to manage the Lads business, and we are thrilled with the growth he and his team continue to achieve.

What encouraged ASC to form a partnership with SPINS?

Pet products is a growing industry, but we currently lack sales data and trends insights based on real-time market measurement data. The SPINS partnership brings value to our business by providing access to data and insights to help retailers and brands make more educated business decisions.

What prompted ASC to partner with Postmates?

When it came to partnering with Postmates, we did a lot of work on customer surveys and talked to our vendor partners through the first half of 2017 while developing our overall digital strategy. One of the things that kept coming to the forefront was convenience. A lot of people point at millennials, but everybody likes convenience.

As we looked at e-commerce, one of the things that struck me was that in all the solutions we could offer, the most important was to keep that link between the consumer and our independent retailer. If we provided a solution where we just shipped by FedEx, that consumer would be going onto their phone or computer, ordering a product and would never link back to the store. Now, we can allow those stores to deliver product directly to consumers. So, the consumer feels passionate about the fact that they’re supporting their independent, local store and convenience is multiplied because we’re offering a couple of hours delivery rather than a couple of days. We thought it was a tremendous opportunity for independents to step into a solution that will allow them to offer consumers what they’re looking for in convenience.

How has the overall pet industry evolved in the last five years?

The pet industry continues to grow faster than most other retail channels in the US. The pet specialty channels continue to grow faster than the food, drug and mass sales in the pet category, and independent pet retailers have grown faster than pet superstores. This growth has been driven by several trends: humanization of pets, innovation in pet food and supplies, growth in premium offerings and an increase in the number of pets. As independent pet retailers expand their number of stores, ASC’s national network is more beneficial in supporting their growth. As e-commerce expands in the US, so does the portion of pet food and supplies bought through it. ASC strategically invested to support vendors and retailers with digital sales and marketing capabilities, as well as the last mile delivery to consumers through our partnership with Postmates.

How have distributor consolidations and acquisitions affected the pet industry?

Distributors who have grown with consolidations and acquisitions have access to a wider assortment of food and supplies. Having a larger network of facilities across the country helps improve order taking, expedite customer deliveries and build new customer service capabilities. With a national scope, distributors can also share best practices across markets with customers; and importantly, can assist customers expand into new regions.

How have online retailers altered the pet industry?

Online retailers have created an intense level of competition in terms of how retailers serve pet lovers. Today’s shoppers expect convenience. However, they also want a trusted source when it comes to selecting products for pets. Pets are part of our families. That’s why we focused on developing our partnership with Postmates. Our solution serves the on-demand consumer and allows them to buy local and maintain a relationship with their local pet shop that knows their pet personally and is educated on the best products for them.

How can online and brick and mortar retailers co-exist?

Brick and mortar has a real opportunity to create omni-channel experiences for their customers to extend their in-store experience beyond the store walls. Online is about meeting customers where they are and providing product when they want it. Most shoppers want the benefits of both online and brick and mortar.

How does ASC stand apart?

First and foremost, our people and our commitment to our vision, mission and values. We have a team of very ex perienced associates and always look to acquire companies with strong teams that allow us to broaden our view and learn new ways to manage the business.

Our national scope affords us many benefits as well. With the largest footprint of facilities across the country, largest assortment of SKUs for both food and supplies, and exceptional delivery services and capabilities, we’re able to provide a ‘win-win’ for our retail customers and vendors.

What are benefits of a strong partnership with a distributor like ASC?

Trust, growth and efficiency. When you understand your partners’ needs, culture and expectations, you are better prepared to deliver what they expect. A nationwide footprint with experienced people and the largest assortment of SKUs opens up many opportunities for promotion support and new product introductions to help drive growth. In addition, needs can be anticipated and fulfilled by past experiences, so it saves time.

How do regional distribution centers help ASC address retailers?

With the largest network of facilities, ASC can provide our retail partners with a larger product assortment, improved order taking and delivery execution, and the ability to offer new services and capabilities.

How does ASC decide which manufacturers and specific brands to work with?

This is an important process that starts with looking at whether the manufacturer/brand is aligned with our vision, mission and values and overall strategic plan. We also look for what is unique about the manufacturer and brand, how their brand aligns with our current product assortment and which parts of the country the manufacturer wants the product distributed.

What do retailers and manufacturers have to do to ensure MAP pricing policies are effective?

MAP helps protect brands. If retailers can’t make a reasonable profit then there is little incentive to carry a brand. This leads to reduced innovation, and ultimately, less value for the end consumer. For brands to make MAP work, it needs to be enforced. The brand must be willing to make the difficult decision and take action to enforce MAP to gain needed long-term compliance.

How can retailers incentivize pet owners to shop brick and mortar?

Provide topnotch customer service that makes the shopping experience fun and personal. In addition, learn and be willing to share knowledge to educate customers on what is best for their pet. Make sure to offer a broad selection of brands, including those only available through the independent pet channel. As far as pricing goes, brick and mortar doesn’t need the lowest prices, but they need to be competitive. One way to help with this is to offer frequent shopper programs and benefits. And of course, have an on-demand home delivery option for when getting to the store just isn’t an option.

How are independents showing their resilience with competition from larger retailers and online?

There are so many ways independent pet retailers can and do edge out their competition. They provide a more personal shopping experience that can come to life in many ways. For example, they can: provide education, expertise and product samples; hold fun in-store events and promotions; lead or participate in community causes and engagement; engage in creative social media campaigns; offer in-store services such as grooming, training and boarding; and of course, for when customers just can’t get to the store, provide an on-demand delivery option.

What are the top priorities you are focusing on in the near future?

Our top priorities are leading in digital solutions and e-commerce logistics. We have built a new e-commerce platform that allows us to innovate and provide new service offerings that are very different from the core business we had and is transforming our industry.

What can we expect from ASC in the near future?

You can expect a different business model from ASC and new expertise from our people. Our mission is grounded in connecting brands and retailers to those who love pets. We are getting smarter about the way we do that and improving those connections each day.

This article first appeared in the March 2018 issue of Pet Insight Magazine