Your Business: Wolves are the key to dog diet

Chief executive Calvin Smith says Auckland is a test market for Australia. Photo / Natalie Slade

K9 Natural, the raw petfood company, named by Deloitte Fast 50 as the country's fastest growing manufacturer last year and the fifth fastest growing company, was founded by Geoff Bowers, a former British police dog handler, who went to Alaska to study wolves in the wild and found that they thrived on a diet of raw meat, offal and blood.

When he fed his dogs in the same way, their vet bills and skin allergies decreased and their energy rose.

Bowers came to New Zealand and, meeting up with like-minded dog breeder, Bruce Mayhew, the men launched a dog food range.

Sourcing from meat companies like Silver Fern Farms and Alliance, K9 Natural now sells both freeze dried and frozen meat in New Zealand and to 18 markets overseas.

The Christchurch-based business, which began in April 2006, has grown turnover by 300 per cent per annum for the past four years and it has now put out a food range for cats which contributes around 10 per cent of turnover and is forecast to reach 30 per cent.

The dog food retails at $9.95 for 1kg, and $6.95 for catfood. Cat ownership is higher than dog ownership in most countries.

Bowers is now director of sales, and the company's ambassador.

Chief executive and 20 per cent shareholder Calvin Smith runs the company which has a turnover approaching $10 million.

Smith, the former managing director of Credit Suisse First Boston in the UK, is optimistic about the growth in the pet food industry, which has doubled in size in the past 10 years.

The fastest growth area is natural, raw, premium pet food.

The company, which exports 80 per cent, is currently making a real push in New Zealand.

"People are coming to us now, wanting to stock our product," says Smith.

Marketing of K9 Natural is being stepped up in Auckland. It is stocked in pet stores like Animate, Animalia, Raw Essentials, Petstop and in the vet clinics such as Milford Pet & Vet. It will also be in selected Foodstuffs supermarkets.

"Auckland is a test market for us, for what we are going to do in Australia," Smith says.

K9 Natural is going to do pop-up shops in shopping malls in Christchurch and will do the same in Auckland if these go well.

"We find that if you get in front of people, about 80 per cent of them end up being loyal."

The natural petfood manufacturer has its two biggest markets in Japan and the US, with China in its sights.

"Japan is our fastest growing market," Smith says. "The Japanese really value the NZ brand."

K9 Natural owns 35 per cent of the distributor in Japan.

"We helped set that up. It's run by an American guy and his Japanese wife," he says.

"They bridge the gap between the Japanese and Western culture.

"I think that's what I need to do in China."

To help it upgrade its machinery and establish a large sales network, K9 Natural raised $2.5 million late last year.

This added a new 10 per cent shareholder, Grant Ruddenklau, to the four main shareholders.

"I wanted long-term investors who could add some value," Smith says. He is a board member of the NZ Venture Investment Fund.

The investor interest at the time made Smith think that a public float in three to five years' time would be likely to have a good reception.

Smith, who has 22 staff, is looking for a marketing/brand manager who could be based anywhere.

He says hiring people for a Christchurch base is a challenge at the moment.