Pet food producer 4Legs has been able to capitalise on the rise of Australia’s love of pets, manufacturing wholesome dog food that you see in supermarket fridge sections and spinning sales into a $13.5 million family enterprise.
Founder Tony Ratten has watched Australia’s manufacturing sector evolve over decades; his dad played a key role in the Passiona Bottling Company in the 1950s, and Ratten later followed his father and grandfather into the drinks business, seeing the behind-the-scenes production process for everything from straws to Sunnyboy icy poles.
The 4Legs business turns 21 this year—in dog years, that’s a lifetime watching the consumer goods manufacturing space. SmartCompany spoke to Ratten about how to work well with your kids in a “family” business, and why expansion is now key to the success of the 4Legs.
I started 4Legs 20 years ago in the 90s, but before that, I was always in business.
My grandfather and my father were instrumental in starting the [Melbourne franchise of the] Passiona Bottling Company. When my grandfather retired from that, he started off making straws. So I started off in a small manufacturing business that made drinking straws, that was the next family business.
Like any business [at the time], it had just changed from paper to plastic, and when I got involved it was floundering a bit.
We invested in new equipment and had to make some ourselves. To package things into bags and do things like that, you had to be your own inventors, really.
From there my father started and was a partner in the Sunnyboy business, separate from the Passiona business, [and also distributed other juices under the Valencio brand].
I ended up being in the Valencio business to get that going—and again it was about building on importing and putting new investment in equipment. That business grew and it was eventually sold in 1984 or 1985.
At that stage, I had three young children. I dabbled a little in computers—at that point it was the early days of the PC.
But then a colleague of mine wanted to start a pet store business. He had this idea to market an RSPCA brand of pet food, which he started, and I was there to help him financially.
We started it and he’d arranged people to manufacture the products, but after launching he got cold feet quickly—he had his house on the line, I guess. It didn’t launch as quickly as he’d like, so I said to him, “I’ll give you the money back and I’ll keep it going”.
It went on for a few years before I realised we should have been in manufacturing [of pet food] instead. Our competitors, the ones who were making [the food], were becoming more successful.
That’s when 4Legs was conceived.
Getting distribution is very difficult through supermarkets. I was lucky when I started; it was early days and there was a lot more leeway. These days, you get less opportunities.
I think when we started with the RSPCA brand, it was canned food and dried food. It launched very well and people were interested in it, but after a period of time it became just like another food.
The canned food was a very, very ordinary type food. I could tell people were concerned about their dogs and just couldn’t understand what was in the food. I think it was really at the time where pets were starting to be treated right— people were having their pets inside, in their beds overnight.
It was then about making a product that fits that market.
I think with me, there’s been that drive there to do things [on my own]. I had a short stint of working for an employer, about six months, and I really decided working in my own business would be more pleasurable.
All my kids work in the business and run the business now. It would be fair to say I never started the business to provide jobs for them. It came gradually, as they went to uni and established their careers, they worked part time for us.
I said to them: “Working for the business is not going to be a waste of time. If you move on, you’ve got the experience and your degrees.”
You’ve got to be patient, and let [your kids] make their decisions. I’ve seen [the opposite] in suppliers we deal with, where the son is in the business and the dad doesn’t let them have any control.
They are all at the stage now where I can’t teach them much more.
I was given some good advice by our family solicitor [that I pass on]: whatever you do, leave yourself room to move. Don’t knock yourself into something you can’t change or amend. You’ve got to be able to analyse where you’re going.
With local manufacturing, I think where things can be solved by software and robotics and where it doesn’t eliminate labor but makes it more productive, then that’s good. If it can’t do that, then you’re really up against it.
I think there is a future and this country has a lot going for it, but how long it will take and what it will take is not known.
I think for a business like ours to grow we are going to have to move into different markets. While we have a nice niche in supermarkets, you are always quite vulnerable. Our objective will be to grow into different markets in Australia or overseas.
The traditional countries like America, well there’s an awful lot of dogs, but you don’t have to be all over it. Then I think there are other parts of the world where people are searching for good dog food—that could be the Middle East, in India, there are many places.