Central Pet Distribution
6 questions with Keith Bornholtz, president
What’s the secret of your success?
At Central, we are clear about what we are as a company. Our role is more than “transactional,” and our success is rooted in the ongoing value created through servicing both our customers and vendors. Through a lot of work with my leadership team, we developed a forward-looking strategy pivoting our business from a legacy model. This strategy has continued to gain traction and is the foundation for continuous improvement.
You mentioned a forward-looking strategy; how does your strategy support the growth of pet specialty retailers?
First, it was critical to understand who the specialty retailer is. Central’s strategy is built around them and building our competency to serve the channel more effectively. We provide a deeper and broader assortment of nonfood products with an infrastructure optimized to support these dynamic product segments. We can and do meet the entire pet store’s non-food assortment needs as a single source.
Does this mean Central is primarily a supplies distributor?
Our core competency in supplies is unmatched, but we have serviced food lines effectively for decades. Food is essential to our strategy. With our portfolio approach of a limited number of partnerships, we are able to provide a more committed level of service in an overcrowded segment. Our food vendors benefit from a higher degree of focus at Central than they could achieve elsewhere.
Was the new strategy a big change? How is the industry reacting?
Yes, strategy is about making difficult choices. It requires trust and commitment. We engaged stakeholders to gather insight, we clarified how we were viewed by stakeholders and, importantly, what would create value in the distributed model. Many long-term assumptions about Central are changing for vendors and retailers open to options. We are successfully addressing business challenges and helping our partners win.
How does Central support pet specialty brick-and-mortar retailers in this age of increased omnichannel competition?
That is a loaded question! I’m a realist. The impact of omnichannel consumer shopping is here to stay. The shift from brick-and-mortar to online is generally bad for pet specialty retailers. Most brands are finding growth in e-commerce, and resources are shifting to support the channel with the best payout. Without going into detail, we have invested more in the brick-and-mortar channel rather than shifting, and we are growing share.
It’s clear a large base of consumers prefer a retail experience. We support that consumer as well as the retailers and vendors committed to serving them by offering an assortment that works. When done well, consumers are satisfied with the shopping experience and are more likely to remain loyal. We have looked at offering an e-commerce solution, but there is some risk to that. Each time a brick-and-mortar consumer is provided an option to reduce a trip to a store through e-commerce, the retailer must re-earn the next trip. At some level, we’d be making the problem worse.
Pet specialty retail represents the majority of the customers we serve, yet our role as a distributor can vary significantly. Our objective is a high level of engagement at every touch point. Our sales, customer experience and drivers are a team. I require that we are accessible and available to our customers and vendor partners. When we make mistakes, we need to own it by being available and doing what we can to make the situation right, learn and move forward.
What can you tell us about the state of the industry today?
Contrary to many articles, we are seeing growth with our independent specialty channel in aggregate. E-commerce third-party sellers are the most volatile channel. More vendors are choosing to manage the channel directly, and some distributors have shifted their focus to this channel and even participate in directly selling on e-commerce platforms. We don’t do that at Central. We’ve been successful for more than 30 years focused on pet specialty. Our strategy is working for us. Our vendor and retail partners are having success. There is tremendous opportunity in this business, and I’m honored to be part of it.