Tools for Retail Partners; Products for Pets
Blaine Phillips, CEO of Easton, Pa.-based Phillips Pet Food & Supplies, talked to Pet Product News about why he’s proud of his company’s ability to rapidly adapt to the changing needs of the pet industry and provide its retail partners with all of the products customers seek.
"The iT Kit, which was rolled out in early 2014, is specifically for our independent retailers, which are the lifeblood of Phillips. The kit was an answer to changing demographics among consumers and a changing landscape in regard to competition. We started to see more e-commerce and big-box chains pop up and more people wanting to get into the pet industry."—Blaine Phillips, CEO of Easton, Pa.-based Phillips Pet Food & Supplies
Pet Product News: Share with readers Phillips’ history from its beginnings as a feed store to a regional operation to a national distribution powerhouse. What would your grandfather say if he could witness his company’s scope today?
Blaine Phillips: Phillips was founded 78 years ago in 1938 by my grandfather Ralph as a feed mill servicing the local Pennsylvania market in a little town called Germansville. At the time, we were one little store servicing local farmers with horse, dairy, chicken, cow and pig feed. The market changed and the local population started to increase—it was cheaper to live in Pennsylvania than the surrounding New York and New Jersey markets.
The demands for different products, including dog food, increased. We found ourselves expanding into four feed stores to keep up with the ever-growing demand, and together my grandfather, my father and myself operated them. When Purina ProPlan first launched its food, the company’s sales representatives went out to its feed store partners and asked if they would be interested in distributing to a 50-mile radius around the stores. My dad and I both said yes. Our territory kept expanding into what it is today.
My grandfather, Ralph, would be absolutely shocked—yet so proud and very happy—to see what Phillips is today. It’s a great American business story. My father, LaVern, has retired from the business, but he is able to pop in and see how things are going today.
PPN: How many vendors does Phillips work with, how many distributor facilities does the company own/operate, how many brands does the company carry, and how many retailers does it serve?
BP: We operate 19 facilities from coast to coast.
Our vendor portfolio varies by region to accommodate our retail partners’ requests and consumer demands. We track retailers’ requests and arrange the portfolio to reflect what they want. We make sure to feature different price point levels, segments and categories of products so the retailer can be stocked for all consumer types.
PPN: When did you take over leadership from your father? How did growing up in the Phillips family and working your way up from the warehouse provide special insight into the business and prepare you to lead and grow the operation?
BP: It was the mid-1980s when I took over leadership of the company. My father and my grandfather both had very strong work ethics, and I do, as well. I have done every job at Phillips, and I have complete respect for what it takes to get the job done. I’ve worked in the warehouse stocking and putting product away, I’ve driven a tractor-trailer making customer deliveries and vendor pickups, and I’ve placed orders in the system. I have a thorough understanding, knowledge and appreciation for how the business runs and what all our team members do.
PPN: Many industry experts, including the president of the Pet Industry Distributors Association, Steve King, have noted that there are only about 50 distributors serving U.S. pet specialty retailers, compared to about three times that amount 10 years ago. Major distributors distribute larger, more established brands; smaller operations serve newer and smaller brands to gain market share. How will this current structure continue to affect independent pet retailers and small/new manufacturers?
BP: There are significantly more than 50 distributors in the market today.
If there’s demand for a product from retailers, we listen. We want to make sure our retailers can stay current with the trends and can offer their consumers the latest products. Variety, freshness and product innovation are what keep the consumers coming back to their stores.
PPN: What do you say to those who claim that distributor consolidation means fewer opportunities for smaller retailers and manufacturers? What would you say to independent retailers and small manufacturers who are leery of huge distributorships to quell their fears?
BP: Using fewer distributors creates efficiencies and helps reduce costs for the retailer. When retailers work with fewer distributors, retailers can create a real partnership with their distributor and take advantage of the services the distributor offers.
PPN: Share with independent retailers why your four regional shows are must-attend events.
BP: Phillips takes a different approach with our shows. There’s the buying aspect of our shows, which is great because it really allows retailers and vendors to connect in an efficient manner and take advantage of some great deals. At the same time, we offer an educational component.
We understand that the retailer is taking the time to step away from the business, so we really want to make sure there’s value in it for them. We offer seminars on marketing for their store, inventory, POS systems, etc. … We cover several topics in our seminars, which are free for retailers to sign up for and attend.
PPN: What is Phillips’ iT Kit, and how does this tool help your retail partners?
BP: The iT Kit, which was rolled out in early 2014, is specifically for our independent retailers, which are the lifeblood of Phillips. The kit was an answer to changing demographics among consumers and a changing landscape in regard to competition. We started to see more e-commerce and big-box chains pop up and more people wanting to get into the pet industry.
The iT Kit is filled with business solutions that allow them to compete like a big-box store, and it features everything from mobile marketing solutions to assistance with website design. We used our size and influence to go out and negotiate discounts on various programs in order to turn around and offer them to retailers at a discount price. We make nothing on the program; we simply want independents to remain healthy.
It features components that reinforce three things: drive, retain and enhance. We’re trying to drive consumers into that independent channel, we’re helping the independent retain that consumer, and we’re helping enhance that consumer’s experience while they’re shopping the retailer’s store. The millennial demographic in particular is looking for technology or other mediums during their shopping experience.
PPN: What big-picture industry trends are top of mind for Phillips as the company goes forward?
BP: Everybody is buzzing about the millennials and their shopping behaviors, and we’re trying to make sure that we have tools to help the independent go after that demographic. We also keep our assortment fresh, making sure our portfolio has the products the retailer wants and selection they want, when they want it. n
This article originally appeared in the March 2016 issue of Pet Product News.