How did an idea conceived at a card table become the nearly billion-dollar operation it is today? Cord Christensen, CEO of Eagle-based PetIQ, shared that story on Sept. 14 at the Boise Metro Chamber’s CEO Speaker Series.
Over lunch with a view of Boise State University’s Blue Turf in the Stueckle Sky Center, Christensen shared highs, scary moments and lessons learned as he grew PetIQ from its beginnings of just a few individuals working in a few hundred square feet into what the company is today: a nationwide operation totaling about $1 billion and over 1 million square feet; beyond its headquarters, PetIQ also has large-scale operations, such as manufacturing, in Florida, Nebraska, Texas and Utah and approximately 3,500 employees.
“A small piece of equipment creates significant capacity,” Christensen said. “We’re always in a place where we have almost 50% excess capacity.”
PetIQ, in a nutshell, provides major retailers such as Chewy and Walmart with health care products — a number manufactured by PetIQ — for small-size household pets.
In tandem, VetIQ walk-in clinics offer veterinary services; Christensen highlighted having representation in almost every state and clinics within five miles of a given population. Clinics are located in retail partners that benefit from generated foot traffic and purchases, to name just a couple of benefits.
“We just wanted to provide a smart way for pet parents to be able to provide health care for their pets through convenience and affordability,” Christensen said of the company’s mission. “12 years later, a billion dollars in revenue, the message resonated.”
The idea came about after Christensen took a pet to the vet and looked at the bill. Following some sticker shock, Christensen researched what was going on in the industry; he found the supply chain kept costs high for pet health care.
Christensen described the order of the formation of PetIQ, following conception at the card table, as finding out what resonated with customers and employees, then building brands and figuring out how they made a difference, and then a culture starts to develop.
“You start to get that culture through your business so you can replicate it over and over and start building out who you are,” Christensen said.
PetIQ started as a distributor, but Christensen pointed out profit margins in that area are usually pretty thin; so, the company started developing its own products that led to better profit margins. Today, 30% of sales are PetIQ brands.
“It’s 30% on a billion dollars; you realize the margins are 55%, not 6%,” Christensen said, noting the significance of recognizing where profit comes from in a business.
When it comes to working with the retailers, Christensen advised: “As long as you’re able to stay up with where things are going, developing the items, knowing how to execute for them, delivering the right quantity, the right service, they (the retailers) don’t have a need or the time or capacity to go with other people.”
When talking to potential future retail partners, Christensen pointed out that those retailers were not selling pet health care products actually being sold to veterinarians.
As the demand for PetIQ’s partnership grew, Christensen said he found himself having to say “no.”
“We literally had to say no to (companies) like Target and PetSmart because we didn’t have the capacity to keep up with the customer,” he described. “We said, ‘We’re going to have the number-one club store in the country, the number-one retailer in the country, and never disappoint them.’ And we literally didn’t take customers until we knew we could handle the business and properly execute.”
In 2017, Christensen took the company public as a means to make some acquisitions. During this approximately two-week process on the road, Christensen learned “if you’re not at least five to 10 times oversubscribed, all those people are backing out.”
“What’s fun is the big funds don’t put their bids in until the last day,” he said. “In 30 minutes, we went from $250 million in orders to probably a billion.”
In closing, Christensen said, “You just never know, when you start a business, how it’s going to go. I have built a lot of businesses but the ones that…have that really different strategic need and difference are the ones that kind of run and do amazing things if you have great leaders and you bring great people along and drive the business…and that’s kind of the story of PetIQ.”
Following his talk, Christensen took some time to answer a few questions from event attendees:
“How do you manage having a consistent culture (across) all locations?”
“It’s hard; it’s probably the hardest thing we have to do,” Christensen acknowledged, but also said, “We’re committed to it.” For example, leadership will fly out to other sites and hold events at those sites, and the company invested in video equipment for remote town hall meetings, including for employees.
“Have you given any thought to branching out into larger animal care?”
Christensen said not really, as it’s a really different niche.
When asked about possibly going international, Christensen said, “It takes 35 countries to get to the same size market of that of the United States. We’re not anywhere near the size we need to be here.” Christensen acknowledged the company did acquire another company in Ireland that had beneficial intellectual property and technology. When it comes to different regulations on health care drugs, “It’s a difficult task overseas.” If a leader is not ready for that kind of scale, going international could be a distraction, he added.
As a final question, one individual asked how Christensen has managed stress as the company has grown, specifically, “what has been your cornerstone?”
Christensen said that while that cornerstone has changed over time as the company has evolved, today, that cornerstone is people who now carry much of the large stress Christensen once carried, such as around legal matters.
“Now, I get to be there to help them through those times and opportunities,” Christensen said. “When it (a situation) comes to me to solve, I’m usually not dealing with all the other in-between stress and so that one big stress I can take. I’m fortunate…for being able to have a cornerstone of people who are good enough to be better than me in those areas I was trying to manage.”
Editor’s note: This article was updated Sept. 22, 2022 to include new photos and the Q &A section.