What started in Marie Moody’s New York City kitchen 16 years ago has now become arguably the fastest-growing company in southeastern Wisconsin.
With approximately 50-percent annual revenue growth over the past year, Stella & Chewy’s LLC topped the “Fastest Five” list recently unveiled by the Metropolitan Milwaukee Association of Commerce’s Council of Small Business Executives.
The company’s projected annual revenue for 2014 is more than $35 million, and Stella & Chewy’s is expecting more than $50 million in sales in 2015.
The firm is growing so fast that it is building its third manufacturing facility in eight years, a new 164,000-square-foot facility in Oak Creek that is expected to be ready in the spring.
That’s roughly 13 times the size of the first manufacturing plant Stella & Chewy’s opened in Muskego in 2007 and exponentially bigger than that New York City kitchen where Moody, founder and chairwoman of Stella & Chewy’s, first began feeding her dog a raw diet back in 1998, the year she adopted a dog named Chewy from an animal shelter.
In the beginning
Upon taking Chewy to the veterinarian, Moody discovered the shar-pei/airedale terrier mix that bore a resemblance to Chewbacca from “Star Wars” was severely ill with distemper, an illness that compromised his immune system and was at the time considered a “death sentence.”
When Moody asked the veterinarian what he would do, he said he’d take the dog back to the shelter.
“But I was already in love with him,” she said. “I remember thinking I could either use all my energy being upset or use it to get him better. “
The veterinarian then recommended Moody study nutrition and feed Chewy the highest quality food possible. She soon learned a raw food diet simulating how dogs ate in the wild was the best option, but the problem was she couldn’t find anywhere to buy it.
So Moody started preparing the food on Sunday evenings in her own kitchen and freezing the portions for the week. The diet worked for Chewy, and Moody credits the raw diet with saving his life, along with “a lot of love.” Chewy lived 16 years, and Stella, Moody’s wheaten terrier mix, lived to be 17 with the same raw diet.
Not long after Moody began making the food, she noticed a new trend developing in New York City.
“The trend of the humanization of pets was really taking off, so it was the perfect storm,” Moody said. “And with the Internet and people getting more educated on how they wanted to feed themselves and their families, that started to trickle down into their pet food.”
Moody left her job in sales and marketing for the fashion industry and in 2003 founded Stella & Chewy’s LLC.
“I felt very passionate about pets and wanted to do something that I felt like really mattered,” Moody said. “While I love fashion, it didn’t have the same meaning as pets did for me, and at that time in my life I was single and didn’t have children. I thought the worst thing that could happen is I would end up right back where I was. I didn’t feel like I had anything to lose. I felt like I had everything to gain.”
Moody began bringing samples of her products to pet stores for owners to try on the weekends until they became popular enough that store owners placed orders. She made the food at home, had it freeze-dried at a co-packer and delivered it herself in her green minivan to pet stores around New York City.
The business grew through sampling and word of mouth, and in 2006 Moody won American Express’ Make Mine a Million $ Business award, a national initiative committed to helping women entrepreneurs grow million-dollar firms. Moody was ready to take her company to the next level, but she knew she needed to control the manufacturing process before going national.
“Food safety was a really big piece of it,” Moody said. “Part of the concerns historically and certainly at least veterinarians have had with raw diets is the possibility of salmonella and E. coli. I wanted to get a handle on that before going to national distribution.”
With the help of animal nutritionists at the University of Wisconsin-Madison, Moody finalized the formulas and subsequently opened the first Stella & Chewy’s manufacturing plant, a 13,000-square-foot facility, in Muskego in January of 2007.
Growing the business
Moody, who was born in Milwaukee and raised in Muskego, had no manufacturing experience when she started and thus relied heavily on the community to help her start the company.
“I was fortunate to meet a lot of great people and to establish a lot of great relationships along the way,” said Moody, adding that she continues to use the same accountant, attorney and banks. “Knowing nothing really worked in my favor, because I had to reach out for a lot of help. When you don’t know anything, you seek out experts. I think it ended up being an asset, rather than a liability.”
Moody went on to develop a rigorous food safety system with a leading food safety scientist and signed up key distributors before hitting another milestone in 2010, when she met Jen Guzman, who today serves as chief executive officer of the company.
After having started her career in the investment banking industry, Guzman went on to work in the private equity industry for about 12 years. She learned about Stella & Chewy’s when she was working at Charterhouse Equity Partners LLC, which was looking at putting growth capital into the business.
“Stella & Chewy’s really stood out as highly differentiated and in tune to health and wellness trends,” Guzman said. “I reached out to Marie in early 2010 and got to know her and her business. The more I learned about Stella & Chewy’s, the more I thought what an amazing business Marie created.”
Moody, impressed with Guzman’s experience and knowledge, asked Guzman to join the company, although Guzman initially declined.
“I was happy where I was, and I’m a very loyal person by nature,” Guzman said. “But I always thought I would go to the operations side, and I realized that this company and opportunity was once in a lifetime. There’s not many companies that come along like Stella & Chewy’s. Marie made that leap of faith when she moved from the fashion industry to start this company. This was my opportunity to take that next leap.”
Two months after Guzman joined the company, Stella and Chewy’s moved into a 50,000-square-foot facility at 2842 S. Fifth Court in Milwaukee.
From 2011 to 2012, the company also hired its first chief financial officer and first director of marketing and introduced a new cat line and exotics dog line to the market. Although the company has stayed true to its two original categories of frozen and freeze-dried products, Stella & Chewy’s has added flavors, sizes and treats over the years.
For instance, an enhanced Carnivore Crunch treat line was launched in November of 2013, a new Frozen Dinner Morsels line came out in February of this year and a new Meal Mixers line was unveiled in August. The company is set to launch a new frozen turkey line by the end of October and plans to release a new 25-ounce bag of freeze-dried Dinner Patties for Dogs by the end of the year.
The Stella & Chewy’s line of dog products ranges in price from $8.99 to $44.99, and its line of cat products ranges from $1.89 to $23.99. More than 70 food and treat SKUs are available in approximately 4,500 independent pet stores nationwide. In 2013, the company entered the Canadian market, where it is in more than 500 stores.
Moody said pet owners should consider trying Stella & Chewy’s because “a little raw goes a long way.”
Stella & Chewy’s products are natural (with added vitamins and minerals) and raw, the latter of which, according to the company’s website, helps improve appetite and digestion; increases stamina and vitality; produces a healthy coat and skin; and supports a healthy immune system.
All Stella & Chewy’s products are made with raw, naturally-raised meat, poultry or fish and sourced from USDA-inspected facilities without added hormones or antibiotics. Furthermore, they all go through the company’s patented SecureByNature food safety process, which is designed to make them safe from harmful bacteria while retaining the food’s nutrient value and flavor.
“A lot of dogs can survive on medium-grade kibble or processed foods, but they don’t thrive on it necessarily,” Moody said. “I would say what you feed your dog is the single greatest factor that can impact its longevity and life.”
Preparing for Oak Creek
More than 150 people, including Gov. Scott Walker and Wisconsin Humane Society representatives, celebrated the groundbreaking for the new Stella & Chewy’s facility in Oak Creek facility last June on what Moody called a “rainy, swampy” day.
The new 164,000-square-foot building is more than halfway complete, and Stella & Chewy’s plans to move into it in March or April of 2015, with a grand opening ceremony slated for June.
The facility will sit on an 18-acre parcel of land in the 220-acre OakView Business Park southwest of West Oakwood Road and South Howell Avenue. The site was purchased by an affiliate of Lincolnshire, Ill.-based Venture One Real Estate for $1.55 million from Milwaukee-based Wispark LLC, the real estate development division of Wisconsin Energy Corp.
On Oct. 15, the building won the Construction Deal of the Year award from the Commercial Association of Realtors-Wisconsin.
Stella & Chewy’s has signed a 20-year lease on the facility, but it has the option to purchase it. As the first tenants in the business park being developed by Wispark, the company also has the option to expand to 280,000 square feet of space in the future.
The Stella & Chewy’s facility, for which Venture One is the developer and Chicago-based Clayco is the general contractor, will have 100,000 square feet of factory production space, 24,000 square feet of office space, 20,000 square feet of dry storage space and 20,000 square feet of freezer storage space.
That space will quickly be put to good use as Stella & Chewy’s is currently at capacity.
From an operational standpoint, the No. 1 challenge for the company, which added a second and third shift in late 2013, is keeping up with customer demand. Its new facility, however, will support more than four times the current overall production capacity.
Moody and Guzman are optimistic about the Oak Creek facility’s proximity to their current workforce, the ability to expand and the space for a greatly expanded research and development laboratory that will allow them to continue developing and prototyping new products.
The location will also have a dedicated dog run for employees’ dogs to enjoy. At Stella & Chewy’s, it’s not uncommon to see a half-dozen or so dogs walking around the office or to find a bone under a conference table during a meeting.
Moody, who has a standard poodle whom her son named Tummy, believes dogs are the most amazing creatures.
“They’re always there for you and happy to see you,” she said. “They’re easy to love.”
As a result of the expansion to Oak Creek and the growth the company has been experiencing, Stella & Chewy’s plans to hire at least 30 more employees in the next year or two throughout departments, including marketing, sales, administrative, operations and finance.
The company currently employs 225.
“We’re really just scratching the surface right now,” Guzman said. “There’s lots of opportunities to get the company’s message out.”
“And a way to bring raw food to the masses,” Moody added.
For instance, the company plans to launch a new website by January and to begin utilizing social media more as a way to better engage with consumers and to create a sense of community online. Stella & Chewy’s will also continue to invest in marketing to increase its aided brand awareness.
In the 11 years since Stella & Chewy’s was founded, Guzman added that not one safety incident has occurred, which is not the case for all raw food companies.
According to Guzman, the $22 billion pet food industry consistently grows at approximately 3 percent, and she believes the premium pet food section is experiencing the highest percentage of growth. She asserts that is due to the continued humanization of pets, as well as consumers’ interest in healthier, less-processed foods.
“Because of pet food recalls and the distrust of what’s really in pet food, we try to be transparent. We post all our lab results online, and we test every batch to make sure it’s free from salmonella and E.coli,” Moody said. “People derive a lot of comfort in knowing it’s all done in our manufacturing plant. There’s real people making this food. It doesn’t feel like a big factory.”
“Everyone here feels a part of Stella & Chewy’s,” Guzman added. “Our employees, but also all these folks in the community, our vendor partners, our distributor partners, and our retail partners. They all feel a part of it because they’ve been so instrumental in what Stella & Chewy’s has become.”
Over the years, Stella & Chewy’s has shared its success through financial contributions and product donations. For instance, it donated $344,000 worth of products to animal shelters and rescue groups across the nation last year.
“Now there’s so many other people who are invested in helping to push this thing up, I no longer feel it’s resting on me,” Moody said. “The success of a business is due to a lot of people. You can’t build a brand with one person.”