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The pandemic is a good time to be in the cat food business – and many others

By August 14, 2020August 18th, 2020No Comments

(This post originally appeared on The Guardian)

There’s a global pandemic going on. Hundreds of thousands of people have died. Millions are sick. Economic disaster has struck nations worldwide. Hey, anyone care for some delicious cat food?

It seems like an odd question to ask. But not for the owners of Smalls, a “direct to consumer” manufacturer of pet food products geared specifically to cats. The company just this past week raised $9m in a round of funding that brought its total amount of capital raised to $12m. And they’re just getting started.

“Cat parents want to give their cats the absolute best, but the majority of what’s available is effectively junk food, disguised as health food,” said Matt Michaelson, who founded the company with his friend Calvin Bohn.

But this is not just a story about two guys who love cats.

It’s a good news small business story that’s getting little attention during a time when so many small businesses are publicly failing, millions are unemployed and economic output has precipitously fallen. Why?

Maybe it’s because we don’t want to trivialize the plight of the businesses that are struggling. Or maybe it’s because the media only likes to emphasize the negative and ignore the positive. Or perhaps it’s just that some people don’t really care what their cat eats and if that’s the real reason then shame on them!

The fact is that, in the midst of all the bad economic news, some companies continue to thrive and that while so many small businesses are suffering so much hardship, there are many other small business owners and entrepreneurs who are moving forward to achieve their goals and fulfill their dreams. They’re out there, raising capital, working harder than ever, making products and delivering services.

Take the cat food market, for example. Thanks to so many people quarantining, pet adoptions have soared. Rescue centers from Kansas to Colorado have literally run out of dog and cats. Companies are offering stipends to help their employees with the cost of pet adoption and ownership. One firm hosts regular Zoom meetups … for dogs. “In the first few weeks of stay-at-home orders, the ASPCA saw a nearly 70 percent increase in animals going into foster care through our NYC and Los Angeles foster programs, compared to the same period in 2019,” Christa Chadwick, vice-president of shelter services at the American Society for the Prevention of Cruelty to Animals told US News & World Report.

All of this means opportunities for firms in the pet industry. Firms like Smalls.

According to a TechCrunch report, the company has “several thousand” active subscribers for its products, which is up more than four times over the prior year. The pandemic has created some supply chain challenges, but Michaelson said that the huge rise in pet adoption has driven some pet owners to “look for alternatives” to their local pet store. “Because we’re seeing this big movement towards the direct-to-consumer side of things with Covid, it’s really an opportunity to lean into that and grow faster,” he said.

Significant economic disruptions can result in lost sales, disappearing profits and even bankruptcies for some small businesses. But for the others, it opens up new markets and opportunities. E-commerce sales are up this year. Savvy restaurateurs have pivoted to delivery and pop-up offerings. Quick-thinking manufacturers have retooled to make protective equipment and other healthcare items. Oh, and two best friends who started cooking cat food in their Brooklyn kitchen are now expanding their Chicago factory after raising $9m.

It’s a good time to be in cat food.

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