BY CLAY JACKSON
Pet industry wonks are a bit all over the map as to exactly what the 2016 acquisitions of TailsSpin Pet Food & Accessories and Wylie Wagg by Chicago-based Bentley’s Pet Stuff and Santa Monica, Calif.-based Kriser’s Natural Pet, respectively, portend for
independent pet retailers in 2017.
Will the new year bring widespread buyouts, or will
it be business as usual and another rosy year for the pet
CAN’T THROW SHADE ON SUCCESS
Few know the pet industry as well as Steve King, president for 26 years of the Pet Industry Distributors Association (PIDA), who sees the recent mergers as par for
King said the pet industry’s own success is why it is
flush with private equity money and seeing moves at all
levels—manufacturing, distribution and retail.
Lending credence to King’s assertion is the 2016M&A
Outlook Survey by KPMG, a global auditing firm in the
Netherlands, which found that 51 percent of the more
than 550 executives it surveyed held that “corporations
and PE funds sitting on record amounts of cash and uninvested capital and the need to make money work, especially in today’s low interest rate environment” would
be the biggest driver of deals in 2016.
“Now, if you look at how the industry came through
the last recession that started in ’08 compared with a lot
of other industries, it kind of put the pet industry in an
enviable position and one that attracted the attention of
a lot of folks from the outside,” said King, calling the pet
industry “recession resistant.”
King compares recent acquisitions by Kriser’s and
Bentley’s with what Petco did some 20 years ago or so,
when the San Diego-based pet retailer started to rap-
“When you look at the growth of Petco … it was large-ly by buying up regional chains rather than adding new
stores,” King said.
Buying rather than building can be a good business
decision for growth companies, noted King, because they
don’t have to spend additional time and money scouting
locations and on construction, and they have a knowledgeable, established customer base to tap into.
“An established retailer is going to have a customer
base that’s in place, so if you’re new to an area, it may be
easier to establish yourself [by buying] than to start com-
pletely new, where consumers in that area don’t know
your brand, don’t know your store,” King added.
There’s no denying that consolidation has occurred in the
pet industry, especially among wholesale pet distributors,
over the past few years.
In “virtually every market in the country,” King said,
“there has been a regional distributor that has sold to one
of the larger companies that have been rolling up distrib-
utors around the country.”
Three major players are responsible for the consolida-
tion of pet supply distributors: Central Garden & Pet Co.
in Walnut Creek, Calif., Phillips Pet Food and Supplies
in Easton, Pa., and Animal Supply Co. in Whittier, Calif.
King is optimistic, however, that the industry is big
enough for national and regional pet distributors to
“In those same markets, there is still at least one, if not
more, regional distributors that continue to compete and
provide service to the retailers in that market,” he said.
To King, the Davids who continue to compete against
the Goliaths aren’t better than those who’ve merged with
“They have simply made a decision that for them it
made more sense … to remain an independent distributor
than to become part of a larger entity,” he said.
TWO SIDES OF THE RETAIL COIN
The decisions are the same for pet retailers; the motivations of buyers and sellers often differ, but there needs to
be common ground or no deal.
“For us, it was always the plan to grow and take care
of as many pets and pet parents as possible,” said Brad
Kriser, founder and CEO of Kriser’s Natural Pet.
“Expansion into the Northern Virginia-D.C. region
has been on our radar for a while, so when Wylie Wagg
came along and we saw the remarkable fit in terms of
tone, appeal and customer experience, it just made sense
to do it,” he said.
The ownership of TailsSpin, with its three Georgia locations, and Wylie Wagg, with five locations in Northern
Virginia and Washington, D.C., each report having been
approached before (further proof that acquisitions like
theirs are nothing new) by “investors, venture capitalists
and other chains” looking to buy before each found their
“Larger chains are buying and pursuing smaller independent pet retailers at a rate that appears to be higher
than in previous years,” said Laura Clark, co-founder of
Clark said it was the “right time” to sell and that she
did so of her own volition.
“We chose Kriser’s because their philosophy so closely
aligned with ours,” she said.
Specifically, Clark cited the Kriser’s commitment to
the health and well-being of animals and the company’s
agreement to keep on all of Wylie Wagg’s current em-
ployees. “We knew we were leaving our team members
in great hands.”
While Clark stepped out of the business entirely, Jusak
Yang Bernhard and Jeffrey Allen Manley, co-owners of
TailsSpin, wanted to retain some level of involvement as
well as see their brand live on.
Do recent buyouts of independent pet retailers signify an onslaught of consolidation on the
horizon, or just good business moves in an industry that continues to overachieve?
37% increase customer base
37% new lines of business
36% expansion of geographic footprint
34% broaden intellectual property or amass new technologies
25% seize opportunity when target becomes available
20% a financial buyer is looking for a profitable enterprise
and/or net gain on exit
16% invest in another part of the supply chain
13% respond against activist investor
7% hedge against competition
SOURCE: KPMG 2016 M&A OUTLOOK SURVEY
CONTINUED ON PAGE 8
For Jusak Yang Bernhard and Jeffrey Allen Manley,
co-owners of TailsSpin Pet Food & Accessories, the
decision to merge with Bentley’s Pet Stuff came
down to one word: competition.
Since appearing on “The Profit,” Bentley’s Pet Stuff has
gone gangbusters and now boasts 40 locations, now
including TailsSpin Pet Food & Accessories.
Laura Clark, co-founder of Wylie Wagg in Northern
Virginia and Washington, D.C., felt it was the “right
time” to sell to Kriser’s, which shares a similar