Clayton Payne, a 22-year pet-food wholesaler in the UK, breaks down supply-chain margins (a £1 cost becomes roughly 40p profit for the wholesaler at £4 retail) and explains why Brexit created competitive advantage for those who adapted. He warns against vague sustainability messaging and "multi-lining" product ranges that dilute brand identity, and pushes for innovation in raw pet food to move past stagnation.
Chapters
Well, good evening everyone. It's an interesting evening. Hopefully lots of you are just sitting down with a nice cool beer or glass of wine or something similar because right now it's steaming hot in the UK. But we've decided that one of our great UK exports who's currently over in America in some casino gambling all of his wealth away, is going to come and join us and share some insights into the pet health industry and what he thinks makes things tick. And that's given you just enough time to allow my co-host, Dr. Conor Brady, to walk back into the room having disappeared and to actually be now just sorting out his microphone and possibly getting ready for the camera. In the meantime, Nick is currently on his way back from yet another holiday, so I'm not sure he's going to be joining us tonight, but we will be just having a bit of a good time as always, nice and relaxed. Conor, are you ready? He's here.
I am ready.
He's back in his seat.
Look at my plant. Look how wonky my plant is. I have to turn it for those listening on podcast. My plant has a bad kink in the middle, so I always have to turn it so it looks straight, but there's no saving this.
What is going on?
I don't know. I'm not a gardener, but I am nearly a chef. Before I introduce Clayton, I got an awesome tip about how to make really quick wraps. Beef mince, okay, with whatever you like to put in it, a little bit of garlic powder, a little bit of salt, chopped up some mushrooms, some Worcestershire sauce. That's a hard word to say. Worcestershire sauce. And anyway, make it into burger meat and then you smash it down onto a wrap. Okay. And then you put the wrap face down on the pan and you cook it and it makes like a very thin burger wrap thing. And then you flip it over and you grate your bit of cheese on top. And so now you've got that bit. And then here is the crème de la crème. I can talk about filthy food because Nick's not here. I'm just after having an ice pop, which I enjoyed. But then she taught you how to make McDonald's Big Big Mac sauce. Like, everybody likes Big Macs except Nick. Big Macs are the best food on the planet. You don't like Big Macs, Bren? Go away. Of course you do. I judge your personality.
Or Panda, maybe, but not Big Mac.
Clayton better be with me on the Big Macs. So the Big Mac sauce is just 1/3 ketchup, 1/3 mayonnaise, and 1/3 mustard. And I didn't have the yellow mustard that a lot of people in America eat, so I just put a little bit of English mustard in. And then the secret tip is a little dash of gherkin juice. You know the way gherkin Gherkins in a jar. And so you put in a tablespoon of that as well. And it is exactly like the Big Mac sauce.
Are you telling me they made Big Mac sauce by using all the leftovers, including the gherkin pickle?
Put it in a jar, shook it up and went, oh, I'm telling you that with a bit of gherkins, iceberg lettuce, because it's not too crunchy. And then you roll up the wrap. Oh, my God. I swear it was like a really good quality Big Mac. And so I've eaten 2 or 3 of them now and I feel like an absolute pig. But that aside, I hope you like my cooking tips. Should we just get straight into it? Bring on Clayton.
Have you got a channel?
Yeah, soon.
Yeah.
Coming soon.
Cooking for the dog. Cooking from what? But do you have a beer with you? Because we have Clayton on with us here. This is Clayton Payne. If there was ever a cooler name of a human being, Clayton Payne is it. And so the man won't quite live up to how cool his name is, but he is actually fairly sound. And at the moment he is over in Vegas at SuperZoo, which we'll learn about because, you know, everybody's dumping his money away.
I didn't realize.
Oh yeah, yeah, he's actually taking it seriously. And the whole world is going to SuperZoo. We're getting so many emails, are we going? I know Rodney and Karen are over there talking. Every one of our US Canadian stockists is over there going to it. So I really have FOMO about this event. So Clayton's over there joining us at some ungodly hour for those listening podcast. It's quite dark in Clayton's room. And, uh, yeah, what, uh, Clayton likes to wear football jerseys. So first, straight out of the traps, what football jersey are you wearing, Clayton?
So today I'm wearing Flamengo— Fluminense, sorry— which is a, um, team from Rio de Janeiro. So it's, uh, interesting.
How many football jerseys do you reckon you have?
At least 150. At least 150.
And have you been to all of their grounds or is this just that you collect them online?
No, no, I generally buy jerseys wherever I go in the world. So if I'm in, let's say I was in Paraguay on holiday and I bought a Cerro Porteño jersey and I bought a Paraguay national team jersey. So wherever I go, I tend to pick up jerseys and they tend to last me. I tend to not get rid of them. So I tend to have quite a lot. I'm a little bit of a jersey hoarder.
Yeah, it's hard to get rid of them, especially Yeah. Especially if you bought it somewhere that you loved.
Yeah, that's the thing.
Yeah. Clayton, I was talking to you there a few weeks ago and just give the people an idea of where you like to go on holidays. And this is legit. This is real. What Clayton's about to say. Give me an idea of the last— just give me a few ideas of where you've been on holidays yourself, by yourself.
By yourself. Not even with the family.
No, wait.
So recent holidays I took were to Somalia, Haiti. I went to Haiti like 2 years ago.
Did you sail a yacht past Somalia? Did you do the—
No, but I did have to hire an armed guard while I was there so that I could leave the city. No, I was in Haiti. It was, um, 80.
Oh yeah, he did say, I do apologize, he's got a bit of a glitch in Las Vegas.
Oh, he's back.
Yeah, tell Wi-Fi, to be honest. But, um, yeah, so, but yeah, no, I had to pay people danger money to take me around, um, people getting shy outside my hotel. Night I was there. I mean, I've been to Tajikistan. I've been to, you know, I just pick a picture. I just normally pick a bunch of—
You close your eyes. Is that what you do? Close your eyes, spin the world and just go—
Yeah.
Oh, no.
Ukraine.
I was in Ukraine in 2014 as well during the revolution there. So no, I tend to—
So I'm trying to work out whether luck's on your side or challenging you at every step of your life.
Still here.
I'm undoubtedly going to get hit by a bus or something outside my house.
2 yards from your house.
A nice people's truck.
Driven by your wife.
Trip over my front step and crack my head on the floor. That's going to be how I'm going to go too.
And like this trip to Haiti, Haiti's got a certain reputation. It was in the news again recently. What's the capital of Haiti again?
Port-au-Prince.
That's it. Yeah. And it looks like Port-au-Prince and there's running gun battles at the moment, I heard. I mean, it's pretty chaotic. I mean, it's not pet food that brings you to Haiti. I mean, why do you go? Why do you put yourselves in these positions? I understand why Anthony Bourdain would do it because he's got a CNN film crew, but what's the drive for you to do it?
So my master's degree that I did was in international development. So I've got a recent development master's, and I did a master's course in development economics. So it's kind of like sort of an interest for me, like seeing how emerging economies are struggling. So my main focus is on unrecognized states. So I've written peer-reviewed articles about places like Abkhazia and South Ossetia and other places you've probably never heard of before, which are disputed territories in Soviet post-conflict areas, frozen conflict.
Love this.
So tell me what got you into— because we obviously see you at all of these pet places. What got you into the pet industry? What was your hook? Do you have pets of your own? Do you have a business that led you in there? What was your first—
I grew up—
Oh, he'll come back.
He will. This is going to kill us. I'm really sorry, guys, yet again. But we are recording the audio, and I'm sure Clayton's press the record on his audio, so we'll get this for the podcast.
Yeah. Okay. So, no, I was— so, yeah, so I grew up in the pet store. My parents had a pet store growing up. We had the best breed dog in Crufts in 1982 as a bulldog. And then I went from that, I worked for a dog food company when I left school. Then I set up a wholesaler with a friend of mine when I was 20 years old. And we ran that for 22 years. And so I've always— my money has always been in the pet trade. Now, the other stuff I do is kind of more hobby, like the international development stuff. So it's not that— it just gives me different interests, if that makes sense. But the pet industry is kind of where I've always been and what I've always been around, to be honest.
What's a wholesaler? Like, what's a wholesaler? What's a distributor? Explain to people that when they buy their pet food, kind of what's involved in getting it from the manufacturer to their pet shop? What does a wholesaler do?
So it's just different levels of the distribution chain. So a wholesaler would be a company that buys in a lot of different products from a lot of different brands and sort of centralizes that so retailers can buy things in an affordable way, which also gives them the ability to buy a lot of different brands without actually having to go crazy. The problem with buying directly from a distributor, which would be either a company that imports a product or, you know, let's say maybe makes a product, would be that you would have to focus your purchasing on that one particular product or product range, which in the case of a lot of smaller stores would be difficult because let's say your minimum order is, let's say, £400. For them to buy £400 worth of, let's say, I know, A-set brand can be quite, quite hard for them to do. Whereas if they buy from a wholesaler, they only have to buy 2 or 3 items within like a larger order. Now, they would pay a higher price for that, for that privilege, but that's generally what the difference is.
Yeah.
And how much therefore, as a wholesaler, do you have interaction with all of your customers? Do you, did you sort of go out and see lots of stores? Did day just tend to— do you sit in your ivory tower and just sort of like shell stuff out? What was your approach?
So I was so successful as a wholesaler because I'm quite personable and I used to like— my customers were my friends. So personally, I would talk to my customers all the time. I would get them on board by physically visiting them as and when I could. I would even go out and deliver to them and go and see them physically, just see how they were getting on, if they had any problems. I used to take most of the calls from them. And again, that was kind of as a wholesaler, as I got bigger, they got harder and harder to do. But it was kind of a key part of why we were successful, because if there was a problem, people could come back to us and I could sort it quickly. Whereas when you take some of the bigger wholesalers, the people at the top are so divorced from the customer, it can feel like nothing ever gets done. And it was something I used to win a lot on, was people saying, 'Will I buy this product off of them?' And like, 'I can never just get, you know, never get it right,' or 'There's a problem and I want a credit and it takes months,' or that sort of stuff. Or if they were selling a lot of one product and they wanted a better price, it would be easy for me to sort that out. But the more divorced you get from your customers— but look, I liked my customers, so for me it was like, that was half the fun, was actually talking to people and actually understanding what was going on in their shops, understanding what they sold, what they didn't sell. Why they sell things well. So that was kind of— I'm like an obsessive anyway, so I kind of need to know what's going on at every level. So it was good for me, but it was also good for the customers.
And how was that? Sorry, sorry, how was Brexit for your business? Were you still doing the wholesale and stuff? Before we get into what you're doing at the moment with the podcast and whatnot, how was Brexit for wholesale in Pet Food?
So I sold out in 2019. So just before Brexit really took control. But look, the truth is that we've seen other things happen. And look, Brexit is one of those things that it's good for some, bad for others. But the reality is I always like things harder because it takes more. The easier something is to do something, the harder it is to make money out of it. I understand that. So if everyone can go down Booker's and buy cans of Coke for 40p each and sell for 80p. That's not something you're going to sell easily. Whereas if you have to jump through hoops and get vet certificates and do loads of paperwork and buy bigger, be more organized with your buying, that was always a good thing for me. So Brexit would have actually been a positive for me, to be honest. Although as an industry-wide thing, it would have been a negative. But I always like things to be more difficult because the money is in doing stuff that's more difficult, to be honest.
Definitely. Yeah, it definitely is. For those that don't realize it, everyone's bitching about Trump's tariffs and whatnot, and Europe's up at 15% now for products going into the US. And whatever about that, people don't realize that for me in the Republic of Ireland to ship to my stockists in England, I have an 8% tariff on there. And then there's always a sneaky 1% or 2% customs fee that's not always the same for some reason on top of customs delays. And so there's 10% going to the right and there's 15% going to the left now. It's not much of a difference. And so people aren't always aware that those tariffs are in place, certainly if you're in Europe trying to get into Britain. And so Brexit seems to have made that a little bit more complicated for people that don't understand. I've only realized since talking to you, Clayton, when you know things, how easy things can be, like how easy you would find moving a product into the US compared to me. I would just find it just wouldn't work. It just wouldn't work for me. Whereas when you know, it's much easier. But for me, getting in after Brexit has been trickier than it used to be, that's for sure. That's how I'm finding it anyway.
No, look, the reality is that things are like, it's hard to make money if you don't know what you're doing. So for me, where I've been doing this my whole life, it gets easier and you get more contacts and you understand just the logistics of things and how they work. Yeah, for me, these things seem simple, but I guess if you've never done it before, it seems like a massive mountain to have to climb, to be honest, just to try and sell something into America. And it's like one of the common things people say when they see America is they see all the different tax systems in place and city tax, state tax. And a lot of this stuff is completely unapplicable unless you're actually set up in every single state with an LLC. Most of these things aren't hoops you actually have to jump through. So it's just understanding the real lay of the land.
That's all it is. Yeah, it's really interesting. We've had loads of business challenges over the last 5 years, from Brexit in the UK to COVID around the world to all of the cost of living crises that we've been through, what's happened with oil prices from various wars and all sorts of changes in delivery costs and the results of that. And I know we've got lots of guys that are running their own businesses, small businesses. Some of them are in retail, some of them are services direct to customers, but all of them have their challenges. And I know that, as you said earlier, that relationship that you had with customers on the ground and where people were managing their own businesses and buying from you. What would you say have been the people that have been successful's big thing? What has made their businesses successful where other people have failed, would you say, in your experience?
Okay, so the most important thing, and I say this, it's funny, like a friend of mine, she always says, it's like you got to be like a shark and you got to keep moving. And so as a wholesaler, I would always be happy with where I was, but then I would have a plan of what I was doing in the next year, the next 3 years, the next 5 years, and how that business was going to continuously evolve. And then when I'd look back on where I was in the 5 years' time and where I would have been had I have changed nothing, it was always like 50% of the business I would have had as a result. What makes people successful is their ability to continuously adapt, move to changes. And that can be on product ranges, it can be on messaging and just understanding where things are all the time and being prepared to move with it. Look, in the last 5 years, we've seen huge changes. We've seen the growth in online, we've seen the growth in 3PLs. 25 years ago, when I was wholesaling first, you had to have your own warehouse, your own van, like a team of people working for you. I'd only just got a computer, so I was over the moon. I didn't have to handwrite invoices anymore, whereas all this stuff now seems stupid. But things will just keep moving. You have to be lean. You have to understand that you need to work for the basic. You need to cut all your costs down to the absolute minimum to make the absolute maximum. If I'm employing a social media manager for £40,000 a year, are they producing me £80,000 worth of money? Because if they're not, they're not worth having, to be honest. And there's other ways I could be spending that money. I could just be getting a consultant in and just say, well, I only need somebody for 4 hours a day. And we've moved a lot more into that economy where we're not necessarily employing people, but we're getting people to do certain specific jobs to fit the holes around our own sort of like businesses and where our own blind spots are.
Yeah, I think that's so important. I think even for the people offering services, you know, keeping yourself abreast of, you know, what's current, what thinking's there, whether that be how to raw food feed, whether that be, you know, what health implications there are about ultra-processed foods, what there might be as far as the various drugs that are out there, you know, being able to understand your customer and have a conversation, but keep current with information and not just think, I learned this 20 years ago, that's still what I should be saying to people.
Yeah, like being, being ready to pivot. There's a, there's a talk I'm doing at the moment. I'm doing it again now in San Diego in October, Feed Real Conference on the 11th of October. But it's talking about fiber and, you know, plant fiber is probably not working out for most of us, but it's almost certainly not working out for for carnivores. And the end of that talk is like, here's what animal fiber really looks like to a meat eater. And you won't be surprised to hear it's all the indigestible parts of animals. And so I finish with a slide talking to manufacturers and to canine nutritionists saying, heads up, guys, it's on us to get the market to shift a little because it's very hard for a pet food manufacturer to say, hey, we want to start putting feathers in our pet food. And they suddenly start putting that in there. And then my wife Elaine opens up the food. She goes, oh, gross, there's feathers and beaks in this. And it's like, Well, small manufacturers are well ready to pivot and do things that are new and whatnot. Whereas the bigger you get, the more consistency you need, the more reluctant you are to change. You turn like a cruise ship. So small businesses, I feel, always have the advantage. They're more ready to pivot to newer ideas than the larger businesses that are used to keeping it same old, same old, steady the ship, let's keep the profits coming in. So maybe that's an advantage for smaller business. I like that saying, fat cats don't hunt. Small businesses are always light on their feet and they're always looking for opportunities. So I'd say that comes naturally to small businesses. I would say it's a hallmark of them.
I think also it's important for small businesses as well to become authorities on what they do. And like, because again, when you're a big company like a Nestlé or Mars, you are going to have a million different things to your, your bow. But when you're a small company, you have to be very focused in what you're doing because there's nothing worse than dealing with a company that doesn't really understand what it is and doesn't understand what its actual real gains are. Because it's a bit like, why does an old-style pet shop today struggle, whereas a raw pet food shop tends to be a lot more successful? And it's because they've built an authority. They're saying, well, we're not interested in selling wild bird food and hamster food and blah, blah, blah, and millions of other stuff, but we really know what we do when it comes to holistic feeding for pets. And that's all we focus on. So the customer goes in and before they've even spoken to the person, they already have a better feeling than that person understands them and understands their needs and solves their problems better than somebody who is trying to be 30 years ago, more generalized operator.
Yeah. If you were to give some tips to, let's say, manufacturers of products outside of the actual shops themselves, you've handled an awful lot of goods and some of them have been hits and other times you've probably bought put in a few tons of stuff and gone, oh, this isn't moving at all. And there's nothing more heartbreaking than having your cash tied up in stock. I mean, everyone's been there. It's awful. So what are your top— after selling some winners, what are your top tips for small businesses new to the game making food or treats or products or supplements? What are your top 3, 4, 5 kind of tips for success? What would they be, Clayton, in your experience?
So number one is like obviously messaging. Messaging is important. So, and people buy reactively, not proactively. So if you have a headache, you buy paracetamol. You don't buy a paracetamol because you might have a headache in the future. Like, so when you're messaging, you have to like say, right, what problem am I solving? Because most money is handed over to problem solution. So it's sort of like, you know, it's a bit like when you're a dog trainer, you don't want to be a— I'm a, this, that, and the other dog trainer. What you want to be is a really good one. You don't want to be like force-free and all these things. They all sound great. But the reality is, if you're going to a dog trainer because you've got a problem, your number one concern is, does this solve your problem? So this is why terms like sustainability struggle, because it doesn't solve a problem. It's a bit airy-fairy. It's a bit like how much, how little. What you want to do is if you're selling a dental product, you sell this, this cleans teeth. That's your number one. And don't start talking about because it's got seaweed, it could also do joints and skin and that. Just forget all that. Just teeth. That's it. And like just focusing because also when it comes to USPs, people believe in things if it does one thing really well. They struggle to believe in things that do 10 things. Because if your product does teeth and skin and gums and toenail and the rest of it, yeah, scenario. Yeah, yeah. Then people are like, does it really do any of these things properly? Because again, people are buying based on problems, you know. So that's, that's the first thing. Your messaging has to be right. If you're producing products, obviously you need to understand your route to market. You need to understand your pricing model. So again, it's like most people, like, they'll make a mistake early doors where they'll price their product wrong and then it becomes very hard to get back from. So generally speaking, I say that if it costs you a pound to manufacture something, you're selling it for 4 is the basic rule of thumb, possibly 5. And the reason you do that is because you have to go through distribution chains. While the idea that you sell and you can sell on Amazon and say, well, Amazon only takes 15%, 20%, but not if you're paying PPC ads and all the rest of it. All your other costs and your FBA, you're looking at like 40%, 50%, 60% in terms of margin giveaway. And if you're going through retail, you have to give the distributor a margin, you have to give the wholesaler a margin, you have to give the retailer a margin.
Break down those margins for us there. Give us an idea. I'm making a SKU for a euro or a quid. What's the distributor need? What's the wholesaler need?
What will it end up on the shelf So generally speaking, most of the time I would say just building either a distributor or a wholesaler. Wholesaler is a kind of a dying breed in the market a lot of the times now, because a lot of sensible distributors will almost be like wholesalers. Wholesalers are kind of a bit, you know, like my old style of wholesaling where you'd go out and you just do tons of shops and you deliver it all yourself. That's kind of— it's a bit sort of 1990s, early 2000s, really, way of operating. But let's say we build that in. So if it costs a pound— well, let's work it backwards. Let's say it retails for 4. It needs to cost the shop about 2. So that's their margin. So 2, 2.20, something like that. Then you go back to the distributor. It needs to cost them about 1.50. £1.40, and then what's left in between is yours. So that, that 40p which you're making— so it might be selling for £4, but you're only making 40p. But the reality is, is that if you're doing that, even with Amazon, by the time you sold it for £4, you take your 20% off for Amazon, there's the, the FBA costs, it doesn't work out much different. So it's— it doesn't matter what vertical you're going through nowadays unless you're buying something, putting it on the market stall and selling it, you know, like up the road at your local funfair or something like that. Basically speaking, if you can't scale it to 1 to 4 or 1 to 5, you don't have a scale product at any point in the future.
So that's really interesting because just to bring it back to the veterinary industry for a moment, as the vet in the room, the CMA, the Competition and Merger Authority, have obviously been investigating veterinary practices around, because for decades, if, yeah, absolutely decades, the classic was to do exactly what you said, as to be the shop front, is, you know, they do buy in for 2, sell out for 4, because there's all of the costs behind that of staffing, of keeping it, of stock control, of wastage, of, you know, various other things. But right now, because of abilities to buy online and costs seeming to be much less, the CMA are critiquing the veterinary industry doing that.
So how—
is there a price point at which the selling out for 4 when you're buying in for 2 stops? Is there a cost point where actually, no, if it's going to be 50 quid, instead of, you know, if you're buying it in for £25, is that selling it out for £50 no longer appropriate?
Yeah. So when we look at food, for example, which is a lot more competitive and a lot more of a regular base product, the margins are lower. So for example, if you're buying, if you're selling it for £4, chances are you're probably paying £3. You know, the margin isn't big. And if you're buying an Estée Lauder product, you could be making 10 to 15%. That's what people tend to— yeah. So what people tend to do actually is they tend to margin spread. So you'll have your 10% to 15% on your Nestlé, but then your Dr. Brady's product, they'll try and nick a little bit more on. So that's just the reality of it. And I think with vets, vets are in a funnier spot because you are told to some degree what you've got to sell, your recommended certain products. So you're in a weird bind, which isn't— which is sort of an anti-competitive bind. And actually, if you say the CMA should get involved in something, it should be in stuff like, um, you know, the— I forget what the name of the paracetamol you sell with codeine in, but it's sort of like, you know, it's things like that. You— yeah, you should actually be— you should be allowed to sell whatever products you want that make the most sense in the market, whereas actually you can get in trouble for moving off the script. So it's kind of— that's where the anti-competitiveness is actually in veterinary rather than the pricing. Because look, everyone, if you said to everyone in reality, oh, it costs a pound, I sell it for 4, they think, oh my God, you're stitching me up. But this is just normal, like, retail economics that if you produce a product, it has to go through these margins, otherwise it won't get to market. Because the pet shop needs to make money, the wholesaler needs to make money, and the manufacturer needs to make money. And even at these rates, unless you're selling quite a bit of stuff, you're still not making any money. So it's, um, that's the reality. The whole thing has to spin.
But, um, you're absolutely right, because the ridiculousness, uh, for vets in the market— and I'll let Conor move on to the general pet stuff in a moment— um, is literally that people will see those human drugs that they could maybe buy for 16 pence in the supermarket as a paracetamol and assume that, you know, well, why can't vets do that? But because of the legislation and the ability for us to be able to purchase human drugs, and even if we went to somewhere to buy human drugs, the price at which we're sold those human drugs is often double what you can buy it over the counter from, you know, if we buy it through the proper channels which we're being told we have to buy it through.
And that's brutal.
And so it becomes a real problem for many vets to try and absolutely say, you need to use this. I know that this is a legitimate drug. And so many of them where they're trying to help customers with cost of living issues and things like that are saying, yeah, you could probably get this product and it'd be safe. Avoid the unsafe ones like ibuprofen, obviously, and things like that, just for people watching. But the downside is that you then have no control over which product they get. And as soon as they say it's for their pet, the pharmacist or the store will say, we can't sell you this product because this is for humans only.
Yeah. And we see that as customers, as non-vets, we see this happening. We see what like, you know, a Vetri glucosamine and chondroitin costs, you know, it's €1 a capsule for the exact same product off the shelf of of, let's say, Amazon is 1p, you know, when you buy them by the 500. And it's like, well, what's the difference between the veterinary brand? You'd like to think it's completely different, but we see that happening. We see the way paracetamol has been put behind the counter. Vets can't recommend what is an incredibly effective pain relief for animals. And it's like, so yeah, we see that happening, but we don't understand why that's happening. And the vet at the call phase can be blamed for that. Something you said there, Clayton, was really important for people to remember. They think that vets sell dry food because they make so much money and all the cash kickbacks. That is not true. You're getting 10 to 15% for selling big brand pet foods. And I mean, if I say Hills and Royal Canin, I don't know for exact, but that was the way it was when I was in Guide Dogs. I remember those margins were so fine that it's a service to get the person in and the vets had to make it elsewhere. The last point you said was really important too, Clayton, that when people manufacture products and they do the €1 and they sell it for €4, even that doesn't leave a whole lot of margin. You get your 40p and let's say it goes onto Amazon for that. Anybody can put a product on the shelf. But the trick is getting it off the shelf. And if you haven't thought about that bit, you'll get, you'll get your 1 to 4 and it'll get up on the shelf at Amazon, but it's not going to sell. So you need to leave enough margin as well on top of all the other things you've just mentioned to actually go after paying a digital marketeer if you can't do it yourself, running ads if you want to be an online business, you can't exist without it. And so they have a cost as well. So there's people don't understand that when they buy the product, there's a whole lot of cost that's not necessarily in the actual manufacturing of the unit, you know, But yeah, they're really good, important tips. We only got to step 2 and I'm aware we've only got 10 minutes left. What's number 3 on your list today? Yeah, what's number 3?
I think, well, I think a key one is brand cohesion. Like whenever you do anything, I think especially as a smaller to medium-sized business is to have like a cohesive product range. And that could be I'm a raw pet food store selling raw pet food, but then also you've got a big stack of Dr. John's and you've got a big stack of pedigree dental sticks. That doesn't make sense in that environment. Or it could be you're creating your own range of products. So I've got a range of Dr. Conor Brady's products, but I'm also going to have some weird funky treats or something like that which have got sugar in them or something. And then when you actually have them on the shelf, that they make sense. As part of a range. So a common one I'll see is that you'll have brands that, I call it multi-iling. So for example, Bugalugs is one of these companies that multi-iles, which they start off with shampoo and the next thing they're in supplements and then they're in treats. And these are all different parts of the aisle, whereas you should be, if you're a shampoo company, your next step should be grooming equipment. So you're building your aisle. Before you start into a new aisle. And that actually, like, that brand cohesion is very important for actually getting people to understand what you are as a company, what your real belief systems is, why you're very good at doing what you're doing. And I think there's a lot of companies which they just go for the easy wins so much so that it just gets ridiculous and it because it's— look, if you're in a raw pet food store, you're going to get people who come and want to buy Dr. John's or they want to buy Rodeos or they want to buy Smackos or they want to buy a tin of chum. But it's down to you to say, no, I don't do that, because the people who do come in and buy the right stuff will see it and be confused by your messaging. So, like, one of the main things I always used to say, I always knew a pet shop was going down the tubes when you go in and they'd have a big stack of toilet rolls or something because they got them cheap and people are always asking for them. Because then people are suddenly like, this isn't a pet shop, this is a bric-a-brac discount store. Yeah, I'm not buying my pet stuff from him because I don't trust this guy. Do you know what I mean? Whereas you need, you need that trust, and you get that trust through cohesion, identity, authenticity, but also showing people that when you're producing what you're producing, you're actually— you understand why you're putting it together in the way you Yeah.
If you were to pick an identity right now, Clayton, what's hot and what's not? What would your product and shop look like right now?
Well, an interesting thing is I think actually because you guys are obviously big on raw pet food, I think raw pet food is actually, despite its enormous growth, is going through a bit of a challenge at the moment. It's becoming a little bit stale and it's kind of And at that point we cut him off.
Yeah, good, he's gone.
We're not hearing that. It's la la la la la.
We had to chop off Clayton there for obvious reasons.
Did you just cut me off? You're like, you're not saying anything bad about raw pet food ever. I was ready to go.
I've got a big button here.
Yeah, yeah.
But no, like, why do you say that, Clayton?
Yeah, I think the problem is, is that, like, look, it's like anything, you have to keep moving forward. And like, people get bored. As much as you can look at something and go, you know what, I think this is the right way to do things, I believe in this category, you kind of want to keep interested. And people have short attention spans, you know, like, and look, I think there's— when I spoke to Nick the other day, I was talking about this, you know, there's lots of things you can do. Like you could have a kangaroo meat-based raw food or you could have emu meat and you could start talking about the different amino acids and, and just start targeting it for certain dogs with certain problems and that sort of stuff. Like your papaya paste, I think, is a, is a good thing because again, you're talking about how it's going to hit certain things. But if you look at the generality of raw food, it's become quite stale in terms of it's just all 80/10/10. Beef, chicken, lamb, duck. You know, it's kind of like if I'm a consumer, I kind of want to be excited once in a while. I don't need it every week, but you just want to know that things are moving, things are changing, and that you can actually get something a little bit more interesting all the time. And all we're getting is a lot of the same. And I think this is why fresh food is becoming strong and why it's winning in some categories is because there is a different dog. Which looks like something like you'd make in your own kitchen, or Butternut Box, or Tugs, which has got insect protein in, or Years.com, which looks like a lasagna and a fucking paella and all this sort of stuff. And it's like, people understand. Yeah, but it's like people look at things like I think for the raw pet food industry, I think we have to raise the game. You have to be more interesting because we are losing the war a little. The battles where it's been winning the war for so long, I feel like everybody's just got really samey, samey and got quite boring, to be honest.
Interesting. So you like the idea, you like the way the products are going, mimicking human products, which was something we were exploring 10 years ago, making burgers and sausages and things that people go, oh, I know what a sausage looks like. And now I give sausages to my dogs. It was an easy win to sell the product, I have to say.
I don't necessarily like it, but at the end of the day, it's not about what I like. It's about keeping the consumer interested. And the reality is that people, let's say, it's not that even like, I mean, look, I would never buy Years.com because I think lasagna dog food is stupid. But lots of people are. And like, you know, you have to remember that we are, let's say, cutting edge at the front of what we're doing and that we have to also say that 90% of the consumers aren't, you know. And so it's about making sure these consumers understand, like, the differences we're giving them. If there is a choice between a lasagna for dogs, which just looks kind of cutesy, or let's say, you know, a kangaroo-based raw food where you can talk about the amino acid content and why it's good and why it would be good for certain breeds, that's going to win. But we're not doing that. We're just doing the same thing at the moment. We're just doing how do you want your beef 80/10/10 or your chicken 80/10/10, or you go and look at Nutrament and they're just using ox liver and stuff with everything. And it gets kind of the same, you know, sort of like it's just more a drive to see who can do the cheapest chub roll rather than who can do the best range of products and most exciting range of products. Because there is still that premium edge of people who just want the best, but they also want to understand why things are the best.
Yeah, yeah, yeah. The excitement is difficult because it's hard to polish a turd sometimes because ground-up raw dog food can look a little bit samey. You know, 80/10/10s aren't the sexiest looking food on the planet. There are a few manufacturers out there. There was a great one, Manx Canine. Shout out to her. She was the first person that I saw doing this in the Isle of Man, hand chopping lumps of meat and veg and whole fruit. And it looked like something you'd serve a king. It was gorgeous box of food. Now, from a manufacturer's point of view, I'm thinking the horror of putting that product together. I mean, that's hard to ship. If the product isn't completely full in the box, then when you stack them, they crumple down. These are small considerations, but it makes shipping and packaging a pain in the butt. And people don't want crushed packaging. So all of them, scalability of that is a nightmare for someone like Bell and Duke who wants to sell it by the container loads. Like, that is, that is a hard task. And so it's the kind of— it's the, it's the trying to marry mass production, uh, quality, and customer wants expectation. That is very hard to keep changing that and not go down the you know, yeah, that is a hard thing to do. It's hard to keep coming. Well, I guess that's the best companies innovate all the time and they're always coming up with solutions.
Like, the truth is nothing good is easy. If you could come up with the next banging idea, like, then you're a millionaire, right? So it's not, it's just about like keep pushing the envelope. And I feel like, look, again, this is me being slightly harsh, harsh on the industry, but I'm being a little bit hyperbolic, but I think that there's just been a malaise. Everyone's just seeing everything going up and up and up and up and they're just going, well, it's going to keep going.
He thinks.
Yeah.
We're going to have to bring in people from abroad. It does this to us.
A little bit like.
We're going to invite you into a studio next time.
But again, But I think people just get a bit bored and I think, look, it's also— that's not to say we're on the way down or anything like that, but it's just we should be aware that we have to keep pushing forward and that you can't just look at what someone else is doing and saying, can I do this cheaper? Can I make it a fancier packet? But also, how do we push this forward organically and try and keep people involved and try and push the information harder?
The homogenization of a product really bothers people. So from a user point of view, when there's acquisitions going on and a company starts to get bigger and bigger, certainly by acquiring other companies, there is a certain homogenization to the product because they need this consistency. They buy the same ingredient en masse, and so the products can get a little bit samey. And that's something that the user sees a mile away and they go, what's going on? So it's a very tricky situation. Again, that's why there's loads of room for small little manufacturers and people that think on their feet. Charging a high price. But there's always a space to start off. Hand-chopped food always sounds appealing, and there's always a market there that will buy Audis over Skodas. They don't care it's the same car. They want the 4 circles on the back. And so you start off there and then you slowly make your way down the market. That's one way to do it. Any other tips, Clayton? I mean, we're over time, but let's just stay on here, Brent, to say—
Oh, no, we're going to get One, I think let's get one or two over on Patreon. And I think from a point of view of— it's been great listening to you. I think my big takeaway, and I think the takeaway for most people out there should be, look, what makes your business stick is having that personal one-to-one communication with your customers. And I think, you know, that rapport of having a communication with your customers is just so important these days. In these days where people are hiding behind, you know, AI doing videos for them, where people are hiding behind, you know, just, I just want to make a product and stick it out there. And actually, they need to be at shows in front of people talking or eulogizing, showing their enthusiasm for their product, not just saying, I just want it out there. So I look forward to seeing you all at Dogfests for the next 2 months, as I'll be at many dog clinics on the Bella and Duke stand.
You can buy some Bully Gods at the— you can get some beers at the Dogfest. Oh, wow.
Okay.
I think they're taking pictures.
I'm drinking Bully Gods here. Righteous AF. What does the AF stand for?
Clayton?
Alcohol.
Alcohol-free.
Very clever. Very clever.
Okay.
I thought I was going to bury you.
I worked out very early on by looking at the percentages, mate.
I knew it was alcohol-free. I was trying to get him to curse. Okay, right, cool.
That's a good one.
You'll never fucking catch me with that. If only they knew you. The lager is particularly tasty, I have to say. I liked Bren. I tasted the Prosecco beer, whatever that is, the Prosecco beer type drink. And to me, it tasted just like Prosecco. It tasted like a type of Prosecco. I don't know, like a type of Prosecco to me. So I think that makes me more feminine than it does anything else. But there you go. Bren Connors showing us his true gender. But yeah, you didn't like it, Bren, but I like that one. And all the other ones I've tasted so far, the lager has been absolutely delicious. The IPA is savage, very hot. A copy. Uh, Nick, uh, would have liked that. And the, uh, I'm on the alcohol-free here, so I can go for a drive down to my mom's after this. It's roasting hot over here. So listen, Clayton, hang around here. We jump onto Patreon now. You don't have to move. We'll just— we'll jump off Facebook, jump onto Patreon for 15 more minutes of chat. And that's just people that pays a little bit of money each month, so we give them a little private show, and we call it a bit on the side.
I love that. So yeah, if you want to join us over on the other join us at patreon.com/rawpetmedics. We're going to be over there. We'll publish that in about an hour's time. So it's time for you to go and get a nice cool drink, find something just to chill out whilst you wait for that to be published. Meanwhile, we'll be working super hard in the heat, getting every last gem of information out of Clayton. Thank you, Clayton, for being with us tonight. It's brilliant to hear from you. And for everyone else, we will see you next week. Where are we doing? What are we doing next week, Nick? Oh, you don't care, do you? Because you're not here.
I'm up here. I've got Oasis on Sunday, Oasis on Sunday, recovery on Monday, and then I'm away with the family for, for 10 days.
Yeah.
So I won't be here next Tuesday, the following Tuesday maybe for FAQ. But I think we've another guest there. Who is that other person that we wanted on? Anyway, we have someone for next week as well.
So we should be in the calendar before and we'll be, we'll be bringing yet another guest to your eyes. So for everyone else, thank you very much for joining us tonight. It's been great to see all your comments. I'll try and flick through a few and answer some of them. For everyone else, if you want to join us over on a bit on the side with Clayton Payne— I've put 'of Clayton Payne.' I normally put 'with.' You know, what's to put on the side, Clayton? Don't say anything, your wife's watching.
Okay, take care everyone.
See you later.
