Why DTC Is A Better Path Than A Marketplace For Bespoke Offerings

When it comes to their pets, Americans are more than willing to shell out impressively large sums of cash. In 2018, American consumers spent $70 billion on their pets. The largest category of spending is on food – around $23 billion each year, or roughly 32 percent of the total.

And yet for all the money we’re spending, it is not clear that we are getting great value for the money. Among frequent complaints about pet food is that the under-supervised and under-regulated area of commerce offers wide ranges of quality levels. Much of what passes as salable is at best full of fillers that add little nutritional value, and at worst are full of “antibiotic residues, toxins, pesticides or disease-causing pathogens.”

There are some great brands out there – but, consumer groups often complain, there is no easy way to tell the good from the bad. Paying more for labeling that says “organic” or “grain-free” is not much of a guarantee of quality.

Enter direct-to-consumer (DTC) brand Ollie, which came to the market in 2016 with the promise of dog food that was not only healthier or higher-quality than the average offering, but was actually fit for human consumption. Three-and-a-half years and $17 million later, the brand has found there is an audience for such an offering – a fact that, as newly appointed CEO Nick Stafford noted in an interview, can be explained by the cultural shift in which Ollie launched.

While the idea that “you are what you eat” is certainly not new to the market, the wide-ranging focus on wellness as a differentiator of products has piqued consumers’ interest even more. A customer who is concerned about the holistic implications of what they are putting into their own body, Stafford said, is also transferring that feeling into the food they choose to buy for their animals.

“I think it looks a little bit like the human space, which is why we’re increasingly looking at wellness,” Stafford told Cheddar. “This – sort of – premium and fresh [food] part of the market is arguably one of the most dynamic parts. It’s a strong growth part of the market.”

To meet the demand, Ollie’s main selling point is the amount of customization it offers its canine clients for their food. Among the factors taken into consideration are the dog’s age, breed, activity level and even taste preferences. That data is used to create customer recipe recommendation, along with the correct serving sizes for the pet.

Pricing is based on how much a dog actually eats – a small dog’s portion will run about $3, while a more average price per meal is around $6. All food is prepared in a USDA-certified kitchen and includes fresh, “human-grade” ingredients like chicken, beef, lamb, butternut squash, rutabaga, chickpeas, potatoes, cranberries, kale, strawberries and cod liver oil, among others.

The product is not inexpensive – although it’s not quite human-level pricing, it is far closer than the average bag of kibble. And the more expensive end of the market, which Ollie is largely credited with helping to create a few years ago, has become increasingly congested, with a host of competitors offering similarly premised products focused on nutrition and wellness. But Stafford remains confident that the brand has staying power and a competitive edge.

As Stafford noted, Ollie works directly with their clients and develops relationships with the pet parents who come to their site for customization and bespoke service. Other players in the field who are trying to make that work without creating that brand-customer relationship are unlikely to replicate that experience, he believes.

“That’s harder to do for a marketplace than it is for a direct-to-consumer brand,” he noted.

And for pet owners who are also devoted to the wellness and nutrition of their furry friends, the core value lies in the customization and the confidence that they are offering their pet the best available option on the market. Which means for now, despite the crowding, Ollie is not looking to learn any new tricks in terms of building scale by adding other services. The product is the focus, because it meets the customer’s need.

“The logical place for us to start is to say we have a great product, and we would like more people to experience it,” said Stafford.