With a growing market for more sustainable and nutritious food, Haley Russell didn’t see why the same couldn’t extend to our family pets. In this episode, Haley discusses her entrepreneurial journey in founding the sustainable dog food brand, Chippin. and tells us what exactly got her company off the ground. Haley combines a passion for the dog food industry with a growing demand for a healthier and more Earth-friendly canine diet to produce innovative products for dog owners everywhere
Transcript:
Speaker 1: [00:00:14] Three, two, one, lift off, we have a lift off!
Sam Jayanti: [00:00:35] Hi, Haley. Welcome to Ideamix radio.
Haley Russell: [00:00:39] Hi, thanks for having me!
Sam Jayanti: [00:00:41] So quick intro to Haley. Haley is the founder of Chippin, a pet food brand with sustainability a key part of its mission, using planet-friendly protein instead of animal protein. Chippin is catering to the consumer demand for more sustainably sourced pet food and snacks. Haley founded Chippin in 2019. We’re so happy to have you on the show, Haley
Haley Russell: [00:01:05] Thrilled to be here and share more.
Sam Jayanti: [00:01:08] So, Haley, tell us a little bit about how you came up with the idea and what made you start the company.
Haley Russell: [00:01:16] Well, I am a dog mom myself, I have a dog named King Fisher, who goes by Fisher. And really what I identified was that as I was going to the grocery store or shopping for pet food, I was heading in wearing my Allbirds, using a reusable tote and had a reusable water bottle and just was floored that basically the pet food options were so much of what I had seen my entire life with my family dogs, which are these kind of bulky bags of beef and chicken kibble. And I couldn’t find anything that was high quality, really tasty and planet-friendly. And so what we’re doing is bringing alternative forms of protein to the pet food market, which is enormous, especially here in the US, and doing that in a way that’s biologically appropriate for our dogs and really fun for pet parents.
Sam Jayanti: [00:02:21] So your timing is amazing, because the pet food category, as you said, is huge. But a new company is within the space and the need for different protein sources and different product formulations has been consumer driven and so there is such a hunger in the market for it. Looking back, you started now in 2019, was that timing really good? Are there sort of relatively low barriers to entry in the industry? Are they high? Like, how have you thought about that as you’ve progressed with the idea?
Haley Russell: [00:02:54] Yeah, I think with any venture, there’s always time to ramp and so our timing, at least as I’m seeing it right now, has been impeccable. 2020, we all know, was the year in which so many people got dogs. So there are lots of new pet parents. And then I think over the course of the past two years, there’s just been this massive acceleration and acknowledgment of the climate crisis that we are in and a recognition that, really, we all need to do a little something and Chippin is not only a way to give our four-legged family members the protein that they need, that’s more sustainable, but also it’s a way to “chip in”, and do something that’s good for your dog and the planet. And you’re probably gonna hear my dog in the background.
Sam Jayanti: [00:03:46] That’s okay, that’s got to be part of the mood of this episode.
Haley Russell: [00:03:49] Yeah, yeah, he’s having a good time. He’s entertaining himself in the other room.
Sam Jayanti: [00:03:56] Do you feel that you have been able to change the way that the consumer looks at pet food? Has that been a part of your mission? So much about new products and launching new products is a sort of customer education process, right, of getting them to understand why this new product is a good thing and why it represents progress.
Haley Russell: [00:04:23] Mm-Hmm. It’s been really interesting because we have some sets of consumers in which there’s absolutely a big education process where really a lot of the education is centering around how we directly source are proteins and how they truly are so nutritious. All of our proteins, including crickets, overpopulated fish–fish called silver carp that’s wild caught here in the USA–and spirulina, which is a vegan algae, California grown. All of our proteins are more digestible than chicken and contain all of the amino acids that our pets need. That’s not something that really anybody knows right off the bat and so we certainly have this endeavor of sharing with people how exactly the proteins that we’re using are great for your pet. But it’s been interesting because then there’s this kind of whole other segment of people whose pets have allergies, which is enormous and beef and chicken are the top allergens. Most people who have a dog have a dog friend or family member that has had some kind of dietary challenge. And so not only have we been able to deliver on this need and interest in sustainability, but also from a health standpoint, there are a ton of pet parents that are really actively seeking for alternative protein options.
Sam Jayanti: [00:05:55] That’s totally fascinating because a similar trend has happened in the consumer space, right, where even just in terms of the amount of animal protein that is average in our diets these days, the proportion has gone down both for dietary and health considerations, but equally for environmental considerations because of the impact of animal breeding on the Earth. Do you think that that is, in a way, you know, the allergens almost sort of help the cause of moving pet owners, and their pets consequently, to alternate proteins, has that been sort of a trend that has worked in your favor, do you think, as the company’s grown?
Haley Russell: [00:06:42] Yeah, absolutely. Because I think whenever you’re doing something new, there is always that challenge of people knowing to search for it. So hypoallergenic protein, no-chicken pet food is something that people have to search for, and so that’s been a great entry point for us. I think when you’re looking at any startup, right, the RXBAR story of the CrossFitters being the early adopters who are really passionate about it and they needed that kind of bar to power their lifestyle. We have a similar thing when it comes to pets with allergies.
Sam Jayanti: [00:07:23] Yeah, totally makes sense. Tell us a little bit about founding the company. So many people have great ideas. They also confront a number of fears and constraints. How do they fund their idea? Should they start a company alone? Investors tend to prefer teams of founders because they feel like there’s less key man risk. Tell us a little bit about your thought process around the founding and how that’s evolved since then.
Haley Russell: [00:07:55] Yeah, the process of founding a company I think is always going to be scary for for anyone, unless you’ve done it a handful of times before. This is the first company that I’ve founded, but it is not the first company that’s earlier stage that I’ve worked in. And so I had the experience of spending a couple years in finance and then right after working at a big bank, I worked at a tiny juice company in which I was the first full-time employee. So I had seen really closely the activities that the founders there were going through and knew what it was like. And that de-risked the process a little bit for me. And then I worked at Uber for a bit, so I saw a startup more at scale. And so I think the process of founding the company, for me, was really that I’d kind of sat in a couple of different seats, not as the founder, and so it felt like it was time to sort of jump in. I had an idea that I obviously still really strongly believe in and am passionate about scaling, and so I just had to make the leap. And then I, as I think it comes to actually growing the company, every step is new. It’s something where I try to really look to people who are one, two, three, ten steps ahead, both in this industry and the pet food industry and also in other industries, to just learn about their experience so that I can do the best I can.
Sam Jayanti: [00:09:44] I’m really glad you brought up the learning point because that is such a key aspect of starting and scaling a company. On the one hand, you had this really powerful base of knowledge and learning coming into this process of starting Chippin where you had worked, as you said, at a number of both early-stage but also more growth-stage startups. But at the same time, founding a company is a little bit of a lonely process, and you’re always looking for people to learn from, to almost get coached by, to have mentors around you who can help answer some of the questions who have you turned to for coaching and mentorship? How you found those people? How have those relationships impacted your learning curve as a founder and consequently the trajectory of the company?
Haley Russell: [00:10:38] Yeah, I think there are a couple different segments of people that I talked to. Certainly other founders are really huge because they can empathize with what you’re going through and I think it’s, there’s almost an unspoken commitment to sharing out the many failures that you go through when you’re a founder to help others try to avoid or at least navigate them fluidly. And so other founders, number one, have just been fantastic for operating the company and then also fundraising advice and then have another bucket of people that are seasoned investors. So really talking to folks who do early stage investing a little bit later and have a couple of mentors within the investor space that have also helped that ‘what are our goals for three to five years out so that we can start to track toward those today?’ And then I think, you know, the pet food industry is kind of interesting in that you have these really big players who are potential acquirers for us down the line. And since we’re at such a different stage, we’ve actually taken part in some networks within the pet food industry in which we’ve been able to speak with executives from Mars or Purina and that’s been really awesome just for goal-setting in a way, where our day-to-day activities are structured so that we really can fulfill our potential when it comes to Chippin.
Sam Jayanti: [00:12:34] So that’s a really interesting point, the last point you raised about talking to some of these larger companies that could be acquirers for your company and others in your space over time. On the one hand, the larger companies have typically failed to innovate in the way that you are, at Chippin, or others in your space, precisely because they tend to have a mainstay business that’s doing fine and it feels a little bit like biting off the hand that’s feeding you to sort of start an alternate business that then starts to chip away at your existing business, no pun intended. And so they are looking for opportunities to partner with, to acquire, companies such as yours. What are your learnings from them, in some of those relationships that you’ve built, and what are the key things you’ve taken away from those?
Haley Russell: [00:13:30] Yeah, I think a lot of them tend to be pretty industry-specific, so things like how to make sure we’re setting up the right structure with our manufacturers. So we design all of our recipes in house, we work with a board-certified veterinarian, PHDs, food scientists. So more than other companies getting going, we really have a lot of internal processes, but we don’t own a manufacturing plant, right, we’re not at that stage. And so ensuring that you have the right relationships when it comes to producing the product that we’ve designed, and we’ve consciously sourced all the ingredients for, is big. And there’s really nobody else in the industry who knows better than a big company of kind of how to make sure you’re setting up those relationships right. So that’s certainly been one area of expertize and advice that we’ve sought out from them, and then I think also just, you know, getting a sense for what’s interesting in the market for a big company and keeping a pulse on that, not that that changes what we’re doing but it’s still helpful information just to know.
Sam Jayanti: [00:14:54] Yeah, totally makes sense. I want to go back to your model, which is, as you just described, one of co-manufacturing and co-packaging because you’re a small company, you’re not at the stage where you own your own manufacturing. And that largely has been an enabling trend, right, across a bunch of different product categories where it’s possible to outsource all of these different stages of a product and getting it to market. And that’s led to, you know, brands in your space in pet food but equally in cosmetics and consumer packaged goods and all kinds of other spaces. That said, the time of the pandemic has been rife with supply chain problems. And how have you thought about that? What are the risks that have arisen from some of those supply chain dependencies? And how have you solved some of those problems?
Haley Russell: [00:15:54] We really did plan early in the process to try to avoid supply chain challenges to the best that we could. Delivery have probably been the hardest for us because we really have no control over what UPS or FedEx or other carriers are going to do and timelines. But when it comes to our actual supply chain, what has come to light, and one of the things that was so critical for us, is that we have an advantage by directly sourcing our proteins and by conducting all of our manufacturing activities here in the US, from food production to even the development of our packaging. And so a lot of companies had issues if they’re sourcing things from overseas, packaging a lot of times coming out of China. And we really didn’t have any of those. Lead times have increased, but by having a pretty tight, US-centered supply chain and one in which we’re working directly with our cricket, directly with our spirulina, directly with our fishery partners, we get visibility into what’s going on with them so that we can try to pre plan if it’s seeming like there was a labor shortage and maybe there’s a supply chain hiccup. And so I think just that tight control over supply chain, which is important for high quality foods, trust and safety within pet food has also been something that throughout the pandemic has made it that we haven’t had major bumps or hiccups.
Sam Jayanti: [00:17:42] That’s great to hear and it totally makes sense, I think more and more companies are starting to realize the importance of onshoring their supply chain and various activities, but you guys did that from the beginning, which is wonderful. How do you, Haley, tell me a little bit about–I think this is really valuable for our listeners because so many of them start companies or think about starting product companies and there’s always this tension between, of course, e-commerce has made it possible to reach consumers directly. That said, you spend a lot of money on marketing to reach those consumers directly and build brand awareness, and much of that is helped if you, for example, are selling your products at a big retailer, where the margins might be lower but the exposure is way higher. How have you thought about that balance between sort of own-store sales versus third party?
Haley Russell: [00:18:43] We definitely have a mix. Channel diversification is important for us, and it’s important for our customers. When you’re looking at some consumer goods for people, maybe there’s an opportunity to disrupt the industry by bringing it online. With pet food, there’s very much a lot of channel-switching. People might want to buy treats in-store, at a farmer’s market, but they order their food on auto-ship online. And so from day one, we envisioned that we would really try to meet people where they are and focus on innovation within the protein space and make Chippin available both online on our own website, a more limited set on Amazon, and then in stores. And so we kicked off with Petco, now in Petco.com. But we did a feature of Chippin in stores in 2021 as part of an Earth Day promotion. And then we’re in a handful of local pet shops, specialty grocery, we’re in Erewhon out in Los Angeles, and those are doors that we continue to grow. So any listeners that have requests, definitely send our way.
Sam Jayanti: [00:20:12] Wonderful. Tell us a little bit about your fundraising experience. I mean, that’s another area that, for a lot of founders and for a lot of companies, it’s a big reason why companies fail if they fail to raise the funds that they need within the timeframes that they need it, what has your experience been like? Who have you relied on for advice on how much money to raise and when? As a founder, you’re always trying to strike that balance between I want to raise enough money that I’m not going back out too soon and there’s sort of stability and security for the next couple of years, and at the same time you’re trying not to be dilutive because you know that your valuation is increasing as time passes. So talk a little bit about that.
Haley Russell: [00:20:56] It’s absolutely a learning process. Fundraising isn’t something that I think anybody is amazing at day one. You sort of have to figure it out and so that’s where that bucket of other founders and investors as mentors has been huge. And we’re still in early stages, so we’ve raised some capital from a mix of strategic angels and some VC firms as well. But we consider ourselves pre-seed. So we’ll be going out and raising some additional capital in the months to come, doing a full on seed round. So it’s something that we’ve seen early successes with. I have a lot of fun with it and I think for anyone who’s considering starting a company, you just got to treat it as a learning process because every single conversation with–my dog.
Sam Jayanti: [00:21:56] No worries
Haley Russell: [00:21:57] That’s King Fisher for you. think this year for you. He might need some Chippin treats. There’s a lawnmower. I think if you treat the fundraising process as a learning process for every conversation, you get a question that helps you deepen your thinking about something related to the business. Then it becomes fun and investors feel that energy. You’ve got to be able to show that you really care about what you’re doing, which if you’re founding a company, I’m sure anybody does. And so I don’t know, it’s something that I’ve really enjoyed.
Sam Jayanti: [00:22:47] It sounds like it’s been overall a very positive experience for you, I mean you’ve approached it with the right spirit but no sort of negative things to report thus far.
Haley Russell: [00:22:56] Not yet. Not every moment is perfect, of course, but I think as a founder you got to have a sense of humor and take it as learning and keep moving.
Sam Jayanti: [00:23:08] That’s so true and have a thick skin. It’s OK. So tell us a little bit about–you said you’re you’re raising a seed round–what are your goals for this year in 2022?
Haley Russell: [00:23:24] We have not kicked it off yet, so that will happen imminently. But certainly, I think most like other founders, kind of big things on the horizon are new products, growth on the DTC and wholesale side of things, and then expanding the team.
Sam Jayanti: [00:23:49] Yeah. Makes sense. What are the new products like?
Haley Russell: [00:23:53] I can’t share that. But what I can share is products that we’ve recently released. So we started with oven-baked crunchy treats powered by cricket protein. Then we added on a vegan spirulina treat, came out with an overpopulated fish-based food over the summer. Fisher’s barking for our latest treat, which is a jerky. So we just came out with a silver carp jerky and a cricket jerky. Just huge, 50 percent of our customer base express that soft and chewy formats were most of interest to their dogs. And really, we haven’t really come across a dog that doesn’t love it.
Sam Jayanti: [00:24:42] Okay. I can’t wait to try it for our dog. Who are some of your key hires for this year?
Haley Russell: [00:24:48] Yeah, I’ll share those out imminently but I can also say that we recently brought on a new head of business operations. I’m really excited she’s joined, and a new marketing teammate. And so growing the team and excited to lean into the operational excellence, continuing to build out the brand and growth marketing department and then also lean more and more into our sustainability/eco advantage.
Sam Jayanti: [00:25:24] Fantastic. Well Haley, you’ve had such a tremendous amount of experience. What are some final thoughts and advice that you would impart to both people who are at the earlier stages of their career, just like you and I were where we were working at different companies before starting our own, or really early stage founders who have an idea or are very, very sort of early on in the birth of their companies?
Haley Russell: [00:25:56] I think really just treating it as a journey. It certainly, as you mentioned, can be a process that is daunting, at times lonely, but there are lots of other people working in companies so leaning on that founder community and then also really just focusing on it’s always a journey and there’s learnings to be had along each step of the way.
Sam Jayanti: [00:26:24] Fantastic. Well, thanks so much for joining us on the show today.
Haley Russell: [00:26:27] Thank you.
[00:26:30] Thanks for listening today. You can subscribe wherever you get your podcasts. And while you’re there, please do review the show. We love hearing from you, so email us at info@theideamix.com or Instagram DM us. Our episode this week was produced by the incomparable Martin Malesky, with music by the awesome Nashville-based singer-songwriter Doug Allen. You can learn more about Doug at DougAllenMusic..com.
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