2. AGENDA
1. Current Trends Driving the Category
2. Three Dog Bakery’s Philosophy
3. Power of the Brand
4. Product Review
5. Pet Specialty BRAND and Opportunity
6. Recommendation/Next steps
4. U.S. NATURAL PET PRODUCT SALES
Pre-Recall U.S. Retail Sales of Natural
Pet Products 2000-2009*, 2007-2012**
Pre-Recall
• 2005-2009 natural pet
product sales were
forecasted to continue
rapid growth – a 15.9%
CAGR
Post-Recall
• 2005-2012 sales are
adjusted to reflect the
increase in consumer
awareness of the natural
category – a 22% CAGR
millions of dollars
*Functional Foods & Nutraceuticals: “Pet foods get functional”, July 2006
**Packaged Facts, Market Trends: Natural Pet Products, February 2005
***Natural Organic and Eco-Friendly Pet Products in the United States, Progressive Grocer , 2007
302.3
338.0
385.1
446.5
527.3
619.4
728.4
1,300.0
1,482.0
1,689.5
1,926.0
2,195.6
2,502.0
849.3
970.5
1,749.3
1,508.0
1,300.0
1,120.7
0
500
1,000
1,500
2,000
2,500
3,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Year
RetailSales(inmillionsofdollars)
Pre - Recall Post Recall
5. Pet Specialty has 47% of the dry dog category, but only 18% of S&T.
Why can’t Pet Specialty achieve the same mix in S&T as Dry Food?
$2,204,500,000
$403,900,000
$632,450,000
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
S&T - Pet Specialty S&T - Total
S&T - Total S&T - Pet Specialty S&T - Potential
$632 Million
Opportunity!
S&T CATEGORY POTENTIAL – Pet Specialty
18%
6. OPPORTUNITIES TO DRIVE S&T SALES
Fast food restaurants would not be in business if they only sold hamburgers
Fries and drinks drive the majority of their profits, and are a major priority
Snacks and Treats offer the same potential for Pet Specialty
Garnering the same S&T share (currently 18%) they have of Dry Dog Food
(47%) would generate incremental sales of $632 Million to the channel
How?
Merchandising against impulse and bundles, consumer & retailer education,
suggestive selling, more feature ads, etc.
7. FOODS VS. SNACKS & TREATS
Food offers opportunity…
Drive Traffic (Destination Item)
Trade-up
Loyalty
Conversion
Treats offer even MORE opportunity…
Trade-up
Bigger bags…with food delays trip to store…while bigger bags for S&T results in driving per capita
consumption
Conversion
PLUS…
Frequency (only 10% feed daily)
New customers (only 35% of pet food consumers buy S&T)
Pantry out-of-stocks (after 7-8 days since purchase from a Pet Specialty store)
Impulse purchase
Elasticity--increased consumption comes w/pantry load
Promotion: e.g. Bonus bags for foods are a discount (and delays a return to the store), while BB for S&T
results in greater consumption
8. REASON FOR BEING
At Three Dog Bakery, We Love Dogs! And Dogs Love Us!
We were founded with Love - that’s our reason for being. It governs our commitment to use only
the freshest, close to the earth, all-natural ingredients that dog owners can identify and pronounce.
Our Story:
In 1989, three dogs (Sarah, Dottie & Gracie), two guys (Dan & Mark) and one 59-cent biscuit
cutter joined forces to create Three Dog Bakery – the world’s original bakery for dogs.
Providing health food and treats just like you would bake in your own kitchen to dogs the
world"rover”.
It was a dazzling moment in canine history – and dogs rejoiced!
Thanks to Three Dog Bakery, our furry friends could now enjoy fresh, oven-baked and treats and
say -
YES to All-Natural ingredients!
YES to Human Quality ingredients! (TREATS)
YES to Wholesome, tasty grains, vegetables, fruits & herbs!
YES to Delicious taste!
YES to Made in the USA!
10. POWER OF THE BRAND
Over 300,000 copies in print
New Cookbook Published 2007
A Real and Compelling Brand Heritage
11. POWER OF THE BRAND
Worldwide Bakery Network
Builds Brand Awareness and Loyalty
12. DIFFERENTIATED AND COMPELLING
Three Dog Bakery offers a full line of Made in the USA, All-Natural
Oven Baked Treats and Food through its growing network of
boutique retail bakeries and retail outlets.
13. PET SPECIALTY BUSINESS MODEL
Pet Specialty Brand “Spoke ‘N Hub” Storefront
Bakery& Kiosk Model
Model Merchandising
DDS Distribution Model PRODUCT
INNOVATION
Growing the Category
•New Users into Category
•Per Capita Consumption
15. BAKE TO NATURE®
ALL NATURAL OVEN-BAKED DRY FOOD
Puppy Adult Chicken Adult Lamb Adult Fish and
Sweet Potatoes
Reduced Calorie
Chicken
Senior Chicken
16oz. Trial Pack – Suggested Retail $2.99
4lb. Bag – Suggested Retail Range $10.99 to $11.49
12lb. Bag – Suggested Retail Range $23.99 to $24.99
24lb. Box (4-6lb. Bags in a Box) – Suggested Retail Range $39.99 - $42.99
25.
Penny Tray for Front Counter
Clock
Open/Closed Sign for Front Door Hours of Operation
4’ Inflatable
Outdoor Banner
Crew Button
Wall Poster
26. “SPOKE ‘N HUB” MODEL OPTIONS
“Spoke ‘N Hub” Model can be leveraged in several different ways…a great
way to describe this model is similar to what Krispy Kreme has done…
Option #1
Become a TDB Franchisee – utilize baking capacity via storefront and distribute to up to 100 Independent Pet Retailers
Option #2
Become a TDB Commissary (Option would forego franchise/store front and branding development in territory)
Option #3
Solicit existing Independent Pet Retailers that may be interested in becoming a TDB franchise and form a partnership
29. DDS DISTRIBUTION MODEL
Pet Retailer
Chuck Latham & Associates
•Sell-in
•Take Order/Communicate
•Merchandise/Stock
Distributor Network
•Receive Order
•Pick Order
•Deliver/Communicate Order
Chuck Latham & Associates
•Notification of Delivery
•Follow-up visit to Retailer
•Stocks Order
1
2
3
4
Pet Specialty Brands/Product
“SPOKE ‘N HUB” Model Products
30.
2010 2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Phase 1 Phase 2 Phase 3 HOLIDAY - "We Believe" PILE UP THE PANTRY BONUS BUY 3DOGSTOCK HOLIDAY
1/3 1/3 1/3 32oz. Canister Purchase Launch 32oz. Canister 20oz. - 25% MORE Free 48oz. Promo Canister "We Believe"
Distribut
ors
Distribut
ors
Distribut
ors
Receive FREE 16oz.
FOOD
Classics & Biscuits
ONLY
Classics & Biscuits
ONLY
Classics & Biscuits
ONLY 64oz. Promo Canister
TREAT DISTRIBUTION BB Coupons for FOOD BB Coupons for FOOD BB Coupons for FOOD BB Coupons for FOOD
Dual & Single Quad Placements Dual 3' Bridge Endcap
or 6' Section Back-to-
Back
on 1/2 Pallet display
Permanent Fixture
Phase 1 Phase 2 Phase 3 BAKE TO NATURE BAKE TO NATURE BAKE TO NATURE BAKE TO NATURE
1/3 1/3 1/3 "Baked is BETTER" "Baked is BETTER" "Baked is BETTER" "Baked is BETTER"
Distribut
ors
Distribut
ors
Distribut
ors 1# & 4# Intro… 1# & 12# Focus 1# & 24# Focus 1# & 24# Focus
FOOD & TREAT DISTRIBUTION BB Coupons for Treats BB Coupons For Treats BB Coupons for Treats BB Coupons for Treats
Full & 1/2 Pallet Merchandisers Back to Back Display 1/2 Pallet & Full Pallet 1/2 Pallet & Full Pallet 1/2 Pallet & Full Pallet
In-Store Merchandising Event - Leverage Account Activity via Dealer Circular with In-Ad Couponing
Treat Activity
Food Activity
