Plenty of bite in pet food

There’s so much talk about the rise of retailer owned brands and a misplaced belief that this is a bad thing for Australians and a bad thing for Australian companies who manufacture here. Yet we have very clear evidence of well-run businesses thriving under hard working and down to earth Australians.

Last month SmartCompany reported on VIP Petfoods, a Queensland-based producer of very high quality, fresh, chilled pet food. It was reported because it is believed to be of interest to private equity investors, and its founder Tony Quinn is keen to sell, at the right price. What’s the right price for a 10-year-old company based in Queensland, Australia, a country with a reputation for terrible labour laws, high input costs and a dollar too strong for anybody to export from? Keep reading and I’ll let you know at the end.

I have to declare a personal interest in this story. I know Tony Quinn through a mutual interest in motor sport, and have huge respect for him, his passion and ability in, and support of, motor sport. And his humble, hard working Scottish approach to building a very successful business. I am not envious of many people’s pastimes, but through hard work, Tony has allowed himself and his family to compete in motor sport in Australia, Asia and Europe, from circuit racing in the Porsche Cup to Targa Tasmania… and he does it in range of Porsches that would make most grown men and women weep with joy.

Tony arrived in Australia trying build a new life in a new country. He, like many of us, took the opportunity to back himself and go into business on his own. Many of us don’t have much choice as we arrived in our late 30s and early 40s and all the jobs with large companies that we used to do in our old country were full. So we take our experience and knowledge and go into business in order to feed, clothe and school our family. That might fly in the face of many management papers you have read, but the start of many businesses often has no greater vision that that. Hard work, good luck and the development of a vision then feeds the growth.

Tony did just that, and in only 10 years, has built an Australian business that successfully competes directly with some of the largest global pet food companies. On the way he has created over 600 jobs, in four factories and not only sells the VIP Petfoods brand in Australia and New Zealand but also exports to North America and Asia. The business now turns over around  $300 million, and makes $50 million EBITDA. And the guy still hasn’t lost his humility or work ethic.

I tell you this because there is always opportunity in our great brown land, irrespective of business cycles, labour laws or currency moves to build amazing companies. Tony has done it, over only a decade. What were you doing 10 years ago… and what could you achieve over 10 years?

So how much is a 10-year-old company manufacturing pet food in Australia worth? Well allegedly KKR and Affinity Equity Partners would be happy to pay around $450 million. Having walked stores in the US, if they pay that price for it, and just win one contract with Publix or Kroger, let alone Walmart, they’d double the size and triple value of the business.

All from a little old pet food factory that was started in Queensland by a Scotsman 10 years ago.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.