Petbrosia startup builds team, adds new products at its Cincinnati headquarters

Pet food startup raised $1.2 million to date

CINCINNATI - Keith Johnson is cranking up the revenue engine at Petbrosia LLC.

The two-year-old pet food company sells custom-blended food online for dogs and cats. It recently upgraded its website and added pet treats to its product mix with the goal of boosting orders and cultivating regular customers.

Company founder Johnson won’t say what the monthly revenue has reached, except that June revenue was 10 times greater than June 2013. And he’s still confident the company can someday reach $100 million in annual sales, which is the goal he established when he launched the company in 2012.

“We’ve actually grown in our operations further than what I expected,” said Johnson, a former P&G executive and self-described pet parent. “It has taken a little bit longer to get investments than what I expected, but frankly it’s been a lot faster than is typical.”

Petbrosia raised $1.2 million in the first quarter of 2014, according to the MoneyTree Report, published by PriceWaterhouse Coopers and the National Venture Capital Association. An SEC filing in February said Petbrosia is trying to raise $1.25 million in a private offering.

Johnson wouldn’t confirm those amounts or discuss his fundraising progress in any detail. But he did provide a tour of the company’s 10,000-square-foot warehouse and distribution center near Lunken Airport, where seven full-time employees, three part-timers and two interns are building an e-commerce company for “pet parents,” the company's  customers.

At Petbrosia, cooked food is blended to the nutritional needs of individual pets – using a proprietary algorithm that factors in age, breed, weight and other characteristics. The food is blended into bags of up to 20 pounds and shipped all over the country. Johnson wouldn’t let us take pictures of the process.

A 20-pound bag costs $69, including shipping. Johnson said the company has shipped about 6,500 orders so far, with more than half of those going to repeat customers. In addition, Petbrosia now has 550 customers on auto subscription. In exchange for free shipping, those customers agreed to have products automatically shipped every six weeks or so.

“They’re making progress,” said Joel Ivers, vice president, entrepreneurial development for the Dayton Development Coalition. Ivers is a former CEO for two Cincinnati-area startups, NanoDetection Technology Inc. and Airway Therapeutics. Now, he manages Dayton’s Entrepreneurial Signature Fund, which invested $200,000 in Petbrosia in the company’s first year.

“When I arrived, we started talking to Keith … about focusing on his repeat sales,” Ivers said. “Once he gets people in the groove, then they’ll keep buying from him and it becomes automatic. We see the results and it’s giving us a lot of comfort.”

Johnson said a software upgrade has made it easier for the company to identify customers who are most likely to make recurring orders. By offering pet treats from Bixbi, a Boulder, Colo. –based maker of organic pet foods, and Crumps’ –branded products from Ontario, Canada, Petbrosia is able to increase order sizes and get the company closer to profitability.

“What we heard from our pet parents is they were looking for us to innovate,” Johnson said. “They wanted to have salmon that has digestion and allergy benefits. With our web site upgrade we’ve been able to bring in some other products, like treats. We’ve paired up with some companies that we believe follow the same kind of nutritional philosophy as Petbrosia.”

Johnson isn’t the only Petbrosia executive with big company experience. Mike Stella, director of operations, joined  in July, 2013, after managing the Kroger Co. sales relationships for Starbucks and PepsiCo since 2007. This is Stella’s first experience with a startup company.

“It’s night and day,” Stella said. But “a lot of the same capabilities that it takes to grow those brands, those businesses are here. You take the same teamwork aspects that have to work there, have to work here. The same operations and inventory (systems) that are necessary there, work here. We’re still meeting the needs of customers. The customer here is an individual consumer. There it was large customer, be it Kroger or another supplier.”

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