Key Take-Aways from Petcare Innovation USA
These days, it’s not unusual to see Fido the dog or Fluffy the cat in family photos or on family vacations. A significant number of pet-owning households around the world consider their pet to be an integral member of the family, and the consumer spending in the industry proves it. According to the Bureau of Labor Statistics pet expenditures in the US totaled approximately $58 billion in 2013. That number climbed to $102.8 billion by the end of 2021, so it’s no surprise that the pet care industry is booming.
Earlier this month, K&R Principals Ed Yuhas and Patrick Fitzgerald had the opportunity to connect with industry leaders at Petcare Innovation USA in Los Angeles.
During the event, Ed moderated a panel discussion among Sarah Philips of Emil Capital Partners, Johnny Tran of 301 Inc (General Mills), Nicholas Nohling of Merck, and Neda Daneshzadeh of Prelude Growth Partners. Focused on raising capital and scaling a business in this growing industry, the panel offered valuable insights into constructing a strong leadership team and recruiting a CEO.
Some of the most notable takeaways from the conversations the pair had both during the panel and outside of it included:
- Being Selective: In acquisitions, the primary focus is on the intangible aspects, particularly the strength of the team and the prevailing organizational culture. Startups are becoming discerning in choosing stakeholders, with an increased emphasis on their selections. Alternatively, when evaluating founders, investors seek individuals with both “GRIT” and “QUIT” – the willingness to go the extra mile and the understanding of the fiduciary duties and the potential need to delegate responsibilities.
- Being Prepared: The business landscape demands a cautious approach, emphasizing sustainable growth over reliance on subsequent funding rounds. Because of the challenge of determining the industry’s demand-supply curve, judicious leadership is critical to success, especially in acquisitions. Those leaders often need to discern whether the acquisition is viable regardless of VC subsidies.
- Being Innovative: Leaders who foster a healthy company culture that inspires and cultivates innovation are a key success factor in any company, but especially those operations lacking cash. Organizations should encourage creativity and emphasize gaining traction in the market through consumer engagement. And while AI has significant potential in the pet care industry from an innovation standpoint, it’s best used as tool to be leveraged with oversight.
The panel and event consensus was clear: the rapidly growing sector is providing opportunities for organizations with an appetite for innovation that have been selective and come prepared to seize them.
Bureau of Labor Statistics: https://www.bls.gov/opub/btn/volume-12/we-love-our-pets-and-our-spending-proves-it-1.htm
Panel notes courtesy of Jeffrey Mard