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Headquarters: Southlake, Texas
Top Executive: Founder and CEO Roger Morgan
Number of Salespeople: 1,000
Products: Holistic pet food and supplements
Roger Morgan believes he is pioneering uncharted territory with his pet products startup pawTree. In fact, he thinks this combination of direct sales and custom pet nutrition is “turning the pet products market on its head.”
A long time in the making, Morgan’s idea for starting his own company was a seed planted while he worked in the pet products industry selling to massive retailers such as Wal-Mart and PetSmart.
But when he founded pawTree in Southlake, Texas, he moved far outside those big boxes and has never looked back. And he says he’s exactly where he planned to be.
“Most of the steps I’ve made in my career have been with this end goal of starting my own business in mind,” says Morgan, who started pawTree in 2012 after serving as CEO of multinational pet products company Retail Product Group, a division of NCH Corporation, and as past chairman of the American Pet Products Association (APPA). He says he recently read a journal entry he wrote as the company was getting off the ground and in it he says to himself: “Roger, this is it. This is what all of these decades have been preparing you for.”
The only gap in that preparation was experience in direct sales. But Morgan says he found mentors in, and became a student of, the channel—a channel he believes is ideal for reaching people who are passionate about the health and well-being of their pets. He also recruited an executive team with more than 35 years of combined experience in social selling to help him build his direct selling chops.
He says pawTree is doubling its sales every year and that it has enrolled the majority of its 1,000 direct sales associates—called petPros—since January 2016. He also confirmed that after raising two rounds of seed capital in the company’s first two years, he has not sought more funding and says the company is on track to take increasingly larger bites out of this market—one that seems to offer plenty to chew on. According to APPA, U.S. pet owners will spend nearly $63 billion on pet products in 2016—nearly half of that will be spent on pet food and another $15 billion will go toward supplies and over-the-counter medicine.
Scratching a Niche
There are other companies that sell custom pet food—including big retail sales dogs such as Purina and smaller web-based players such as Paul’s Custom Pet Food, The Farmer’s Dog, and Tails.com, according to an online search. In the direct selling space, a few companies exclusively sell private-label pet food, treats and supplements, and a few human wellness companies sell pet supplement products. Morgan says pawTree aims to differentiate itself with its designs of a holistic diet of food and supplements based on a pet’s specific nutritional needs and challenges. “There are multiple reasons why a food-only concept is not going to be successful long term. We offer a whole nutrition plan. We really can do amazing things for pets and create a more sustainable business model.”
|Founder and CEO Roger Morgan with his own dogs, an Australian Shepard/Labrador rescue named JoJo and a Cavalier King Charles Spaniel named Bella.|
The direct sales model is perfect for pet owners, Morgan continues, because “people generally want to do the right thing for their pets. They just don’t know what the right thing is.” So this approach provides a level of knowledge and customization they can’t get shopping among dozens of brands at a retail store. pawTree products are formulated by veterinarians and animal nutrition experts and endorsed by other pet lovers. “I chose direct selling because vets and people you know and trust are the reasons people will change their pet food.” And it creates an environment for repeat business, too, he says.
This business is about more than selling “a few bags of pet food,” though, Morgan continues. Of course, it’s also about offering flexibility and financial freedom to the sales associates, as most direct selling opportunities are. But Morgan can’t get enough of seeing how improving a pet’s health can have a profound effect on the relationship between that pet and its owner. Just read between the lines in a customer testimonial, he says. When an owner whose dog was having digestive trouble writes, “My dog couldn’t roll over before, but after three months on your products, my dog rolled over for a belly rub!” or “My dog had terrible breath, and now we can snuggle!” Morgan says it’s hard not to conclude that pawTree strengthens the bond between animals and their pet parents.
He says he has been blown away by the emotional impact his products have had on people. “You can’t predict what’s happening in people’s hearts,” he says. “I hoped it would happen; but to see it happen, it’s just been heartwarming and really surprising.”
Angela Doheny, who handles public relations for pawTree, says she had no doubt that Morgan would make a difference in the pet industry with this company. She was drawn to his energy when she worked with him for eight years at Retail Products Group, and was highly motivated to be a part of pawTree when she learned of his vision for the company.
“Roger is just one of those leaders that you want to get behind,” Doheny says. “I had a passion for joining him at his new company.”
Doheny says pawTree continues to attract people who fully support each other—from the 12-person team at the corporate headquarters to the hundreds of outside contractors who provide manufacturing, branding and IT services to the growing number of petPros, who cover every state except South Dakota and Alaska. Case in point: At the recent pawFest conference outside of Dallas, Morgan presented an award to a petPro who happens to be deaf. Not only did pawTree provide a sign language interpreter for the associate, when he received the award every hand in the room went up and waved, a universal sign of applause for the hearing impaired. “That speaks to the culture of petPros, clapping for him in his language,” Doheny says.
Morgan says pawTree products have even strengthened his connection with his own dogs, a 7-year-old Cavalier King Charles Spaniel named Bella and a 2-year-old Australian Shepherd/Labrador rescue named JoJo.
“Dinner time at our house looks like this,” he explains. “I open up a bottle of joint support, a little chew, and that’s their appetizer—from my hand. And then they each get a different dog food. Then I put a couple of squirts of salmon oil on top of the dry kibble, then pawPairings Superfood.” Bella and JoJo seem to understand the whole process, he says. “At the beginning, they know I’m preparing the meal for them, and they sit there and look at me. As soon as I sprinkle the Superfood, they know it’s time. And they dive in.”
They’re diving in to meat-based food that’s been formulated to meet their specific nutritional needs. pawTree recommends a recipe based on a pet’s breed, age, weight, allergies and other details the owner provides in an online pet profile. The personalized nutrition plan includes food—manufactured domestically by Nebraska-based CJ Foods, with no corn, wheat, soy or poultry byproducts—as well as supplements and sometimes skincare products. Pet owners also can give the food a custom name, like Molly’s Yappatizers or Dino’s Din Din, and pawTree will print the name and the pet’s picture on the food bag label. Once a pet’s plan is in place, the owner can sign up for automatic shipments with customizable shipping intervals and amounts.
Now that it has established itself with the canine contingent, pawTree is opening the club to its feline friends, having unveiled its line of customized cat nutrition products at the July pawFest. Dog products were a natural starting point, Morgan explains, because dog owners spend two or three times as much on their pets as cat owners do; plus, dogs are bigger, so they eat more. But cat owners are passionate about their fur kids, and pawTree wants to serve them, too, Morgan says.
|pawTree consultants, or petPros, are recognized for their achievements.|
He says pawTree’s five-year product roadmap will take the company deeper into the dog and cat product categories. “I don’t see going into reptiles or fish or hamsters,” he says. Given that the customer base of dog and cat owners is three times the size of the base of other pet owners, according to APPA, pawTree seems to be barking up the most popular tree.
Pet lovers usually find out about and start purchasing pawTree products because of a relationship with an individual petPro. But the company does provide the opportunity for petPros to host events called Pawloozas, which are similar to home parties, except that there are often multiple petPros on hand to introduce the products and the idea of creating pet nutrition plans.
In the early days of the company, Morgan and one of his executives would regularly attend Pawloozas to help recruit petPros. That’s who hooked petPro Elka B., then an emergency veterinary technician, who attended a Pawlooza in Salt Lake City and met Morgan and pawTree National Sales Director Melissa Davis. “My passion has always been with animals—I loved working with them and helping them to survive,” Elka says. “We went through the nuts and bolts for two hours. They really made me comfortable taking on this new venture wholeheartedly.”
If a pet lover decides to take the plunge with pawTree, the initial investment is relatively small. For between $25 and $300, new associates can purchase a starter kit and pawTree will waive the website fee for six months. petPros then earn 10 percent to 20 percent on their own retail sales and a percent of the sales of any petPros they recruit.
pawTree also organizes sales coaching and leadership development events for petPros and provides virtual sales training through the petPro app, a game-based mobile app created by Rallyware, a direct sales-focused provider. Sales associates work through modules at their convenience—earning points and rewards along the way—to increase their understanding of pawTree products and develop their direct selling skills, Morgan says.
Recruiting and developing strong petPros is important, according to Morgan, but not for the sake of having more petPros. “We’re definitely a product-centric company and a customer-centric company,” he says. “We have far more customers than we do petPros—that’s important to us.” Morgan emphasizes that pawTree’s mission always has been and always will be about animals and their owners.
“A key criterion we’ll always use to filter will be which products make a difference in the lives of pets and people,” Morgan says. “There’s a bunch of pet products that you could argue don’t make a difference. If it’s a solution to a pet’s problem, if it makes a pet parent’s life more comfortable, you can be sure that’s on our product roadmap.”
At the moment, pawTree products are sold just in the United States and will be for the near future. “Right now, geographic expansion is penetrating deeper in the United States; before we get to saturation, we’ll start looking to other markets,” Morgan says. “We fully intend to expand internationally. The vision is absolutely global.” Morgan says his vision for the company in general comes from a solid product plan and measured growth strategy. “It takes five to seven years to run up the growth ramp to build a sustainable company. Most companies that are successful don’t have $100 million in their first year.”
But the deeper element driving pawTree’s success, Morgan says, isn’t about strategy or numbers. It’s love. “We love pets and people. All people,” he says. “This whole business is a story of unconditional love, and the love our pets provide to us, and the opportunity we have to give back to our pets in ways they can’t provide for themselves.”