How Choosing the Best Food for Your Dog Can Add Years to Their Life & The Problem with The Legacy Pet Food Market with Terri Rockovich, Co-Founder & CEO of Jinx

0:00Like we are the consumers. We know exactly what needs to be better. We know exactly where we can win really confidently. And that allows us to continue to optimize our business and our product portfolio in a way that I think really speaks for itself. And I think that Chris would agree that when he gets Dodger ready for mealtime, that is the most excited that Dodger gets. Like being able to eat great food and get excited about it and like and share those moments is just it's really special. And it's something that I know I do with my own dogs. It's like we have a new baby in the household. And so she's definitely first priority.

0:47But we do have a morning routine and it goes walk and then feeding. And they rely on me and I rely on them. And it's such a source of joy. And I think everybody, regardless of their personality or their profile even, can really relate to that. Hello, I'm your host, Mike Gelp, and welcome to The Consumer VC, where we focus on the intersection of venture capital and consumer innovation. This show is brought to you by Propeller Industries. Propeller Industries is a leading strategic finance and accounting partner for venture stage companies. Now, I know this is free content, but if you're enjoying it, please subscribe on whichever channel that you're listening on.

1:31That's my one favor to ask of you. Whether that's YouTube, Spotify, Apple, that'd be great. And if you're really loving this show and you want some more content, check out my newsletter at theconsumervc.com. I send a weekly recap of all the latest consumer deals that are happening, all the latest news for the emerging consumer ecosystem, distribution news, new product launches. that's at the consumer bc.com and you'll also get emails of when the latest podcast episodes are released too so check it out the consumer bc.com and click subscribe please note that all content and episodes are for informational and entertainment purposes only it is not investment advice thank you jerry stab for the intro to our guest today terry rokovich who is the founder and ceo of jinx Jinx is a dog food brand that offers premium kibble, homemade toppers, and beef crumbles.

2:23They're made by a team of pet nutritionists and veterinarians. We discuss her time working in digital marketing, the opportunity she saw in pet, what is entry premium, and how she compares Jinx to others in the market, since it seems like there's a lot of other premium pet brands that have come to market, why she raised multiple rounds of capital for Jinx, how she thinks about her different sales channels, D2C versus Walmart and other retailers, how she also thinks about pricing for different sales channels as well, and also the future of this category. Without further ado, here's Terri.

3:10Terri, thank you so much for joining me today. How are you doing? I'm great. Thank you for asking and thank you for having me. Oh, thanks so much. Thanks so much for joining me here today. I know we've had this on the books for some time and I apologize that I've had to reschedule a couple of times. So thanks for still be willing to come on the podcast. Of course. Life introduces a lot of stuff and so I'm very used to rolling with the punches. I appreciate that. Really appreciate that. So let's start from the beginning of Jinx. what was the gap in the pet food market that convinced you there was room for another premium brand in pet food?

3:52And as well as what even attracted you in the first place to pet? Sure. So maybe I'll start from the top in the sense that I've been an animal lover my entire life. And so I didn't necessarily realize that that was something I should pursue professionally. It was something that I liked doing personally in terms of rescuing and rehabilitating animals. And that's been a pretty common theme from the very early stages of life through now. And so it should have been maybe a more obvious factor in identifying the industry or the category that I wanted to be in. But I was really presented with the opportunity to work for a digital agency, which exposed me to small brands and enterprise level brands, gravitated towards the small ones because you can make more impact there.

4:44And then it took me three startups to be fully inspired to start my own company in a category that I care deeply about. and as it relates to the white space I had a dog at the time who had a host of different health issues and in addition to those health issues and health drama he had a picky palate and a sensitive tummy and so as a consumer it was really confusing and frustrating to me that there's quite literally hundreds of brands that existed and none of those brands worked for my dog And so what I try to do is think about creating a better product with better pricing and better distribution.

5:25And obviously, that's way easier said than done and requires a lot of capital and a lot of thoughtfulness as it relates to bringing something into market that we can objectively say is superior to all of the other bags and legacy brands. But I consider Jinx to be entry premium. And so on the better product piece, we can really objectively compete with legacy brands in the space based on digestibility, palatability and stool quality results. And that is something that nobody can argue with regarding the scores that you get for how your food tests. And then we also wanted to create something that felt just generally more appropriate for the modern dog.

6:12And that is a proportionally appropriate diet in terms of nutrient distribution. And so something that just feels appropriate is easy to process and won't leave the dog feeling tired, won't leave the dog feeling too energized, and also won't leave the dog fat or obese, which can then lead to a host and series of different health issues. We use high quality ingredients. And so those are premium proteins as the number one ingredient on the label. We use superfoods for functional purposes. And then we use probiotics for digestion and gut health. And why I bring all of those things up is because we as humans understand why those things are good for us.

6:55And so when we're buying grass-fed beef or Atlantic caught salmon or cage-free chicken, we really then understand how that transfers to making the same high-quality selections for the people and the pets that we love that can't necessarily choose for themselves. And so that really wraps the better product piece. Better pricing is pretty straightforward. But when you think about buying a premium diet, especially for a multi-pet household or dogs over, let's call it 40, 50 pounds, you can really be spending a lot. So hundreds of dollars a month just on your pet's food. I know for Blitz specifically, I was doing a lot of hybrid feeding because he was so picky.

7:40But I was spending more on Blitz than I was spending on myself in terms of groceries. And I don't think I'm the only person that does that. So we wanted to make sure that we were building an aspirational brand with a really high quality product, but was really being available not only in many channels, but at an attainable price point. And so adding that value component to a premium brand that sits at the top of the shelf in the aisle and can compete with other brands is like a really critical part of, I think, you know, getting the consumer to try and like and favor a new brand. And then the last piece is just better distribution.

8:20So we have a really strategic channel strategy. It looks a lot different as a brand that entered the category and didn't kind of scale through the traditional route, which is neighborhood and independent pet, specialty pet. And then if you're lucky and you survive those environments and build a lot of brand affinity and customer loyalty, then you make your way into some of those bigger forums, bigger commerce forums. But we really wanted to bypass some of those channels and focus on mass environments like Walmart, Target, Tractor Supply, and then some of the larger grocery chains. And then obviously to satisfy the younger demographic, have a really great representation on e-commerce channels.

9:05Wow, there's a lot there. And thank you so much for kind of painting a picture in terms of how you got started. Well, of course, you being a lifelong pet lover, and as well as going through that experience with your dog, which obviously I'm very empathetic towards. I remember just telling you, like, I had a dog that had lymphoma and unfortunately didn't make it and passed away only when he was six years old. I think a great place to kind of start is first, what pet food the legacy brands, what typically they offered when it came to pet? And also, and I know that you mentioned that with Jinx, the focus was high quality proteins, superfoods, probiotics.

9:57But take us a little bit, if you step back in terms of what some of the legacy products kind of offer. And also maybe how concentrated the overall pet indifood is. Is it just a few companies, for example, that kind of dominate the market share? Is it many companies? companies how quickly as well is that turning from some of from Jinx and other premium brands in terms of taking market share from legacy um uh uh pet brands uh would love to kind of just like paint a picture in terms of what the kind of current offerings were when you were going through that period with your dog sure so I would say you know we started the company six years ago um and unfortunately for both consumers and dogs not a lot has changed there are an abundance of options.

10:43And frankly, it's really confusing for the consumer. If you just walk down the pet food aisle in a grocery store or in a mass retail store, you quite literally get inundated with options. And all of the marketing claims are essentially saying the same thing. And so from a consumer perspective, it's just really confusing, especially if you're looking for something new for your dog. And so in terms of optionality, tons of options, let's call it hundreds and thousands in some cases, depending on the retailer of options, but it's all consolidated at the top. So strategic CPG has these pet portfolios that perform very well because the category in the industry continues to grow in a really compelling and compounding way.

11:28But most of those brands have some type of presence or even ownership from these larger CPG companies. So as you might imagine, a smaller brand trying to compete with legacy brands just from a sheer distribution and budgeting perspective is very, very hard. And we knew that going in, which is why we chose the path of being venture funded, not only so we could get the formulation and the R &D and the product testing right. But so once we launched our brand, we would be able to compete by offering trial experiences, creating some type of ambassadorship in the aisle to educate the consumer, spending on lower funnel marketing, and then obviously leaning into any and all merchandising opportunities that we have.

12:20But in terms of stepping into what was a very noisy and congested category. Most of the legacy brands kind of have this like Goldilocks problem, which is either too little or too much. There wasn't really a brand that was just right and really serviced the largest addressable population of dogs and worked for dogs of different ages, breeds and sizes. So as we were going through the formation of the company and really thinking about our nutrition philosophy that not only and selfishly worked for our own dogs, but would work for the mass market. And most consumers, we really wanted to make sure that we were providing proportionally appropriate diets so that really like we could feed an abundance of dogs with a better diet.

13:11That was the only thing that made this challenge worth pursuing from my perspective. and so we kind of have this positioning that is like specialty for the masses so you've been in a petco or a pet smart or a pet supplies plus they have really high filters for the products that they put on their shelves and they sell to consumers and so we wanted to make sure we passed all of those filters and we could sit on any pet specialty shelf but that product is available in mass channels and at a price that is really tolerable for the average consumer. And so that's how we kind of pulled apart from the legacy players is creating a diet that was compelling for a large audience and worked for most dogs that had better health benefits, stronger ingredient labels, and more health benefit claims, but also tasted delicious for the dog and was affordable for the consumer.

14:09And so we weren't trying to necessarily alienate anybody, which is a problem with more of the new age brands that offer fresh and raw and rock coated and freeze dried and air dried options, but instead solve for the masses and really put a healthier alternative on shelves. So consumers could start shopping with that brand. How did you also think about learning product as well and learning, for example, what the right formula was and also where to even source your approach to even sourcing the right ingredients or products in the right ground. Because I know, Terry, you have an incredible background in marketing, at ModCloth and Casper and Outdoor Voices.

14:54And what I also find unique is that a lot of what we're talking about is on the product side too, right? And the ingredient side. So what was your strategy in terms of, or, or your, and I'm sure extended from your curiosity with your own dog, but, but how did, what was kind of the steps that you took in order to understand product and the supply chain side to actually building out Jinx? Sure. So the first thing we did before we raised a single dollar was to really start networking within the industry and within the community. And so we knew that we were bringing a certain skill set to the table, hailing from Casper most specifically, but mostly digitally native brands.

15:42We were trying to start a CPG company with a consumables focus, and none of us were scientists, formulators, veterinarians, or animal nutritionists. And so we assembled a nutrition Council at the onset of this business that really served as strategic partners to help us think about why we were doing this, what the nutrition philosophy looked like, how we brought that to life, and then how we sourced manufacturing partners and ingredient procurement partners to make sure we were putting the best possible diet on shelves and delivering against our main mission, which is to elevate the way that pet owners care for and connect with their animals.

16:23Apart from, of course, it taking up a lot of CapEx, but since this is quite a new product and quite different to the old guard when it comes to pet food, when did it make sense for you to use a network of manufacturers and co-manufacturers versus actually trying to actually vertically integrate and build out your own manufacturing plant? Sure. So our entire manufacturing practice is based on co-manufacturing. It would require hundreds of millions of dollars and frankly, a skill set we don't have to build and staff our own factories. And then really even think about like the distribution and logistics aspect of how to get that product from said factory to our retailers.

17:13We have had a commitment from day one, and that has been to produce in a domestic network. It makes things more expensive, but you also then reduce the risk of things happening overseas where they're frankly out of sight or where there's less oversight. And so we really wanted to commit to being U.S. made and manufactured and only work with leaders in the category. So we had the privilege by way of adding some folks with incredible expertise and reputations in the industry to our nutrition council of getting introductions, flying to the Midwest, going on factory tours and sitting with the executive team to really then evaluate the partners that would be best for our business at the time of launch and through scale.

18:04And so we take our time. We're incredibly thoughtful and diligent when selecting those partners. But we do have those filters and requirements that keep the business domestic. So in the U.S. and then, you know, really allow us to feel comfortable and confident that we've got the right safety protocols in place so that we can really deliver food without any type of problem. So contamination issues or recall. And actually, our very first full-time hire outside of the founding team was a manufacturing and food safety expert. Because if you can't get that piece right, then to me, that is kind of the biggest concern within the business.

18:50And so we continue to invest in having a best-in-class assurance quality program, both internally and externally. So with our full-time employees who have that domain expertise, and then also with our co-packers, co-manufacturing partners, ingredient sourcing partners, and so on. What was it like convincing manufacturers to work with you? Because high nutritious food for humans, that's something that's been around for a long time, producing high nutritious food for humans. where, as you pointed out with the incumbents, it wasn't high nutritious foods that they were actually producing. And for pet, how as well were you able to convince manufacturers that we want to produce high nutritious foods for pet?

19:40There is a market here. Because I know now the market seems to have kind of exploded with a number of, with Jinx and obviously a number of brands. But that is still a pretty recent phenomenon. It is, yeah. And listen, I can't claim that it was a cakewalk at all. We visited a lot of facilities and spoke to a lot of different partners. But I will say, you know, myself and my two co-founders, we look and sound a lot different than the people that are the CEOs, COOs and CSOs of existing legacy pet food companies. And so I think that helped to set us apart. And when we walked into those rooms, we had so much, albeit blind, confidence about what we were building because we were the consumers and we were solving for our own pain points and frustrations.

20:34And furthermore, you can't argue with the trends and the data and the numbers. And so we knew that millennials were the most attractive cohort from a consumer standpoint regarding how much they're willing to spend and how deeply they want to make the right decisions to keep their pets happy and healthy. They're delaying major life milestones, like getting married and having kids in service of really taking their time and having pets and making sure that they're able to take care of those animals in a real way before they make those big life decisions. And so all of the trends were working in our favor.

21:11And frankly, I think we just looked and sounded a lot different in those conference rooms than other pet food executives. One of the interesting parts about pet is with pet food, you don't know. Not that taste doesn't matter, but it's a lot less. You might be a lot less concerned with with taste. It's it's as long as the animal eats the product and consumes the product, then great. You can pack it in with a ton of nutrients. It's not like, you know, human food where taste is like, no matter how nutritious a product is, taste is kind of is is king. It's it has to taste good in order for anyone to to kind of eat the products or or for most people, at least taste is is usually the first thing that people look look for.

22:06When you're doing formulations and testing and nutrition and thinking about nutrition, how do you even think about what is the right combination that works for a dog? Is it let's pack as many nutrients here as possible because taste might not be as much of a factor in as long as they're consuming it and we're packing in as much, you know, high amount of protein, probiotics, that, and then this is great. How do you think about that? Sure. So palatability is one of the top three things that we solve for when we are either going through a brand new formulation process or if we're optimizing a diet.

22:51And that is because some dogs, more than you might think, have palatability preferences and or picky palates. So our philosophy was it doesn't matter how healthy the diet is. If the dog won't eat it, then there's no purpose, right? We're not going to be able to continue to win that repeat business. And so palatability is actually one of the primary things that we solve for. And making sure the food is delicious is tested through PAL studies. And we make sure that we not only meet, but be head-to-head tests of the legacy players in the space that have been doing this far longer than we have. Because taste and flavor profiles are such an important part of the dog getting excited for mealtime and then finishing their bowls.

23:42That makes a lot of sense in terms of also running tests as well to make sure that, of course, the animals are, of course, eating it and enjoying it as well and consuming it. And I guess for, for palatability, I'd imagine that your, your test, your test is over different breeds, different, even size of, uh, size of, uh, of animals to make sure that it's kind of, um, across, uh, across, you know, all the spectrum that it actually is, um, that, that dogs are actually eating it. Right. Yeah. 100%. And to be honest, I have two big dogs now and they'll eat anything. So they're not great data points for me.

24:23but Blitz, my dog who really inspired me to start this company and do it in the vein of creating a healthier alternative than what existed in current pet food aisles was really like the pickiest dog. He would turn his nose up at human food if it like wasn't the right temperature, if it didn't have the right smell and so he ended up being like the inspiration for creating something that tasted delicious on its own without any mix-ins. And so we very confidently produced something that could do just that, but with the full understanding that people really are hybrid feeding. And so they're mixing and matching in a lot of cases just to make sure that they're changing it up to keep the dog interested, but not in a way that's disruptive to their digestive system.

25:15Are there any dog breeds that are actually a lot harder to crack in terms of that are a lot more picky or a lot more particular when it comes to food? Yeah, this is a generalization. But I would say small dogs are usually pickier. It's like dogs over 50 pounds, large dogs, big breeds. They're typically the ones where they're hungry, in some cases ravenous by the time they wake up for the day and they're going to eat whatever's in front of them. This episode is brought to you by Propeller Industries. If you run a high growth business, and your focus on profitability, extending your runway and improving your operational efficiency, you probably need a finance and accounting whiz that will grow with you.

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26:36There's a link to Propeller Industries in the show notes if you wanna learn more information. After you figured out what the formulation was and the product, and after you did your testing, with and finalizing what that formulation was in the right mix and that, hey, these dogs off across breeds and through our testing, they're really enjoying this product. And then also it's it's it's it's also has a lot of great nutrients. I know that you that you mentioned you thought about Jinx and the opportunity to be entry entry premium where you're not paying hundreds of dollars a month for one dog in order for it to eat right.

27:20It's premium food, it's quality food, but at the same time, really kind of price conscious and available for mass. I know you just got into Walmart or recently got into Walmart, which is phenomenal. How did you approach pricing? And especially, I'd imagine that you're probably comparing yourselves to the incumbents and how they're pricing. What percentage increase were you thinking about doing that actually made sense that is that kind of entry premium price? Sure. So let me give you kind of the full spectrum answer here, which is like context absolutely matters. We launched our business into the height of a pandemic through a direct to consumer business model.

28:05So the pricing was its highest at the launch and onset of this business because we needed to make the unit economics work. And then also there was, frankly, a lot of demand and not enough product because a manufacturing cycle can take anywhere from 30 to 60 days. And so the marketplace was all over the place. And so the direct-to-consumer pricing strategy was high such that the unit economics could work within that environment. How that has evolved over time is we expanded into retail. And so we launched our first large retail partnership with Walmart in March of 2022. And again, at that time, inflation was a very big part of the conversation.

28:58And so you have this small brand stepping into a crowded category where price competition is really high. And frankly, there are bigger brands taking price advances very frequently. So in some cases, every quarter, in some cases, twice a year. But really, inflation was bleeding into and affecting the consumer. We chose to hold firm on our price point because there is no way we can continue to compete with those big brands by making smaller bags and raising our prices, which is really effectively what they were doing. Consumers are smart and they know that that stuff is happening. And so we really wanted to build favorability and affinity by remaining really fair from a price point perspective.

29:51And then part of this larger positioning strategy of specialty for the masses is not only having a trusted product in the right channels with modern and relatable positioning, but also having a really compelling price value equation and being a slight discount to the most premium brands. and then just a little stretch up from the brands that fall below us. And so right now what's happening in the category as these kind of macroeconomic conditions continue to affect people's budgets is that there is trading up if consumers can understand the value of trading up. So they're willing to stretch. They're not willing to stretch that far.

30:33But a comfortable stretch, a few more dollars per bag is something most consumers can absolutely tolerate. And so we've continued to really anchor the brand and making sure we get that price value equation right. When you did go into Walmart, did that... I've talked to brands that started off in conventional and didn't go to the natural channel, for example. And they've said that it's actually made them a lot more price disciplined and really kind of think a lot more about their margins. Whereas going from, for example, the natural channel where consumers might have more discretionary income on spend into conventional, it can be a lot tougher just because, of course, more opportunity in terms of number of stores and just much larger accounts.