A customer with no money

G'day Sellouts!

Today, we’re discussing The Farmer’s Dog, a company that turned a desperate kitchen experiment into a $2.5 billion juggernaut by targeting a consumer who, quite literally, has no money: dogs.

From rescuing one Rottweiler’s troubled tummy to redefining an entire pet food category, The Farmer’s Dog is capitalizing on today’s pet owners’ desire to give their pets the very best

And in a world where most dog food is…let’s just say “unappealing,” these guys nailed fresh, human-grade meals that actually look (and taste) like real food.

So how’d they do it?

Why focus on convincing kibble feeders rather than competing with other premium brands?

And what can you learn for your own business from a brand making millions on consumers who can’t even pay for themselves?

Let’s dive in.

A Consumer Without Money

The Farmer's Dog has transformed from a kitchen experiment to a $2.5 billion powerhouse by targeting a consumer that doesn’t have any money..

Dogs.

It all started when co-founder Brett Podolsky's beloved Rottweiler, Jada, was suffering from severe digestive issues. After trying every commercial dog food on the market with no success, a vet suggested home-cooking her meals.

With instant health improvements, Brett and his roommate Jonathan Regev realized that the dog food market was all highly processed, and that owners might want to treat their pets better.

Even though the vast majority of dogs have no problem digesting processed food, The Farmer's Dog realized that there's a disconnect between what’s currently on offer for Dogs…and what is actually best for them.

From Kitchen to Kingdom

What started in 2014 as two guys cooking dog food has exploded into a business that:

• Delivers millions of meals monthly

• Has raised over $267 million in funding

• Achieved 669% search growth since 2018

• Reached a $2.5 billion valuation

So how did they do it?

The key success factors come in realizing that this is a luxury purchase.

The brand emphasizes experiences that help owners feel connected to their pets.

1. Show the goods: Unlike traditional pet food companies which hide behind vague ingredient lists, The Farmer's Dog shows you exactly what's in their food. You can literally see, smell, and even taste it (yes, their founder Brett has).

2. Personalization: Each dog gets a customized meal plan based on their attributes like age and weight.

3. The Power of Word-of-Mouth: Their primary marketing channel isn't paid ads - it's satisfied customers. By focusing on creating a flawless experience, they turn customers into evangelists.

4. Smart Customer Acquisition: Instead of trying to convert everyone, they focus specifically on kibble-feeding owners. Other "fresh food" companies are considered "allies".

This last point is worth lingering on.

Why not focus on owners who have already proven they will pay more for their pet food?

Because this is a luxury purchase. Those who already splurge on luxury food are less price sensitive and less willing to switch brands.

However, it's very easy to convince kibble buyers that The Farmer's Dog is a superior experience for their pet than kibble or canned food.

The Breakthrough Moment

The company's real genius was recognizing that as pet owners have come to see their animal companions more and more like people, they also want to treat them more like people.

We know that a diet of heavily processed food is unhealthy for people. It's easy for consumers to extrapolate that the same must be true for their pets.

By offering fresh food with direct delivery, they created a solution that was convenient enough to be adopted by modern pet parents.

This fuels word-of-mouth recommendations, as pet owners want to advocate for better pet health.

The Farmer's Dog is now working with JPMorgan to raise hundreds of millions more, signaling even bigger moves ahead. But perhaps more importantly, they're changing how we think about the pet experience.

Key Takeaways for Your Business:

• Know why your customers buys, even if they aren't buying for themselves

• Boutique DTC must be quality-first

• Make it easy for customers to ‘upgrade’ from their current purchasing habits

• Be mission-driven to turn customers into advocates

Until next week,

Keep selling out,

Luke

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