A supplier to Oak Creek-based
Stella & Chewy’s, a manufacturer of pet food products that use raw and natural ingredients, is suing the company following a contract dispute that allegedly caused the supplier to lose $2.5 million.
Omaha, Nebraska-based
DDR Meat Solutions is a provider of fresh and frozen meats used for food production. The business, which is owned by
Roy Wiggs, is a supplier to Stella & Chewy’s.
The two companies first formed a business relationship in 2020, when they entered into a supplier agreement. Under that agreement, DDR would supply Stella & Chewy’s with raw ingredients for pet food monthly. The agreement included an order minimum.
The agreement was extended to 2021 and 2022 after the 2020 contract was fulfilled without issue, according to the complaint.
In November 2022, both companies agreed to extend the contract into 2023. The 2023 extension included specific information regarding the volume of orders Stella & Chewy’s would be responsible for, according to the complaint.
Beginning last September, DDR alleges Stella & Chewy’s wasn’t placing orders at the agreed upon rate.
“DDR was forced to warehouse several products due to Stella & Chewy’s lack of orders, causing increased cost to DDR,” according to the complaint.
DDR sent an email to Stella & Chewy’s leadership inquiring how to handle the “overbought position” Stella & Chewy’s allegedly left DDR in. In a response to the email, the complaint states, Stella & Chewy’s leadership “made it clear they knew that DDR was in possession of excess inventory.”
At the end of 2023, DDR alleges there were still over 100 loads of meat that had not been taken by Stella & Chewy’s. DDR agreed to enter into a 2024 contract with the company in order to fulfill the overload volume from 2023 and to “continue having an amicable relationship,” according to the complaint.
Shortly after entering the 2024 contract, Stella & Chewy’s allegedly rejected two shipments of meat from DDR and sent a letter to terminate their agreement. The letter accused DDR of delivering products late and failure to obtain quality assurance approvals prior to shipping products.
"Viewed in the full context, Stella & Chewy manufactured a breach of contract so that it would no longer be obligated to abide by the price and quantity commitments it made under the 2023 extension," reads the complaint.
Wiggs claims his business has suffered damages in the amount of $2.5 million. DDR seeks to recover $2.2 million, plus legal fees and post-judgement interest.
"Stella & Chewy's values the relationships we have with our partners that help us provide the highest-quality pet food," said the company in a statement issued Monday. "We're aware of the allegations and are taking the appropriate steps with our legal team to vigorously defend Stella & Chewy’s."
