Editor Thomas Rice and OPCO CEO Dr. Steve Tsengas chat all things OurPet's
The Bowser Report's Editor, Thomas Rice, spoke with OurPet's Company CEO Dr. Steve Tsengas. Below is a transcript of their conversation:
Thomas: Can you talk about the current state of the pet products industry?
Steve: When OurPet’s (OPCO) first got into the pet products industry in 1995, the size was about $16 billion in annual sales. Now it's up to about $65 billion, according to the American Pet Products Association (APPA). The industry continues to grow, especially cat products, which are increasing about 6% a year. Cats are much more of a maintenance-free type of pet, and with the advent of clumping cat litter in the 1990s, it’s much easier to keep them inside. Dog product sales growth is around 2% or 3% annually.
Thomas: Right after The Bowser Report initially recommended OurPet’s in October 2007, the company came under some litigation. What happened with that lawsuit?
Steve: A company that made automatic cat litter boxes saw OurPet's as a real threat so they filed a major lawsuit. We dug our heels in and after $3 million in legal fees won a settlement. OurPet's also received a utility patent. Unfortunately, the litigation took a lot of time and money for three or four years. That was time and money we could not put back into the company. Growth continued, but we couldn’t invest in tooling and product research and development and so on.
Thomas: What’s taken place since reaching the settlement?
Steve: In 2011, we came out of litigation and paid off all our legal bills. Now we’re back on a track and picking up steam. OurPet's has gone through a transition, preparing the company for the next level, which we hope to be about $50 million in annual revenues 5 years from now.
Thomas: What changes has OurPet's implemented to make the transition to a company that can handle higher sales volume?
Steve: We have put in place an updated infrastructure. For example, we’ve automated our Enterprise Resource Planning (ERP) system complete with automatic warehouse logistics. We also receive all orders electronically all the way to payment.
Thomas: Your management team has also undergone a transition, is that right?
Steve: We've built a fantastic team. In the last three years, we've upgraded management tremendously. Our vice president of marketing, Gabriella DeSantis we recruited from one of the major pet companies. She's got an MBA degree in marketing and 17 years of experience. Our vice president of sales, Kathleen Peters-Homyock, has 30 years of experience and an MBA degree in consumer product sales. Our chief financial officer, Scott Mendes, has a Master’s degree in business and has been with us for four years. Dean Tsengas, my son, is an industrial engineer, and was recently promoted to chief operating officer. I've been blessed with an excellent executive management team; the best team I've had in my business career.
Thomas: Recently, you completed a new branding strategy. Can you explain the new branding structure?
Steve: OurPet's started implementing our new branding strategy in 2012. Now there are two brands. OurPet's is specific to the pet specialty market, which includes PetSmart, Petco and other pet retailers and distributers. The other brand, PetZone, is intended for the food, drug and mass channels, like Walmart and Kroger. We completed that transition at the end of last year.
Thomas: Innovation is essential to the success of OurPet's. What are some of the innovative products that fall under your two brands?