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PROFILE: The start-up success story scratching an itch in e-commerce

Reading Time: 5 mins
By Published On: September 26, 20220 Comments

When you hear “man’s best friend”, odds are you instantly understand what’s being said, such is the extent of the love so many of us have for the dogs in our lives. But how many of us have closely considered what we’re putting into our best friend’s bowl every day? We often set healthy eating goals for ourselves, but what about our pooches?

It wasn’t until tragedy struck that the beginnings of the idea for meteoric e-commerce startup success story Scratch Dog Food first came to co-founder Mike Halligan in early 2018. As a childhood canine companion fell ill, Halligan found himself devoting time and effort into researching canine hygiene and the foods we buy for our four-legged friends from supermarket shelves.

“Sadly I had two adult cocker spaniels who both became sick around a similar time, so I got lost down a rabbit hole of understanding dog food and nutrition,” Halligan tells Power Retail, “The more I learnt, the more I couldn’t believe how dog food was made and how the industry operated. I’ve grown up with dogs all my life and all of us know people who treat their dog like a kid, so it was hard to see how little care the industry often put into food and how it ran unregulated to confuse us all.”

“I sound like I’m wearing a tin foil hat but it really did piss me off, so I set out to make a more impact-led dog food company with a business model centred around the food – not sales and profit.”

Having a background of experience in designing and coding websites for a number of Australian brands, Halligan isn’t exactly the prototype for who people might imagine as being behind a start-up aiming to revolutionise healthy food options for Australia’s dogs, something Halligan himself appears at least somewhat aware of.

“Luckily none of the Scratch dogs are eating food that I made myself,” says Halligan. Instead, fortunately for Halligan and most fortunately for Scratch’s canine clientele, he found he had a helping hand he could turn to in co-founder Doug Spiegelhauer.

“Luckily I found a business partner who is one of Australia’s top experts in pet nutrition and ingredient sourcing. After one beer, he quit his industry job and set about starting Scratch with me,” Halligan offers, “While he sorted the food, my background came in really handy to make it easy and less complex to work out how to feed your dog at different stages of its life, and cut through all the confusing jargon and vague industry claims. If we had a better product with a website or creative that was confusing or boring, we wouldn’t have been able to convince many people to trust us with their dog’s nutrition.”

“My marketing experience has been key to getting us in front of customers and convincing them to give Scratch a go, in turn helping over 30,000 dogs eat and feel better.”

Sure enough, the efforts made to build trust with consumers looking to revitalise their dog’s diets has seen Halligan and Scratch Dog Food enjoying swift success and emerging as one of Australia’s most promising e-commerce startups since its launch in September 2018. As a result, Scratch is now projected to surpass $10 million in Annual Recurring Revenue this year, while experiencing year on year growth in the area of 60 percent.

Scratch, offering a healthy dog food subscription service direct to consumers, has seen swift success since launching in 2018.

Operating as a direct to consumer subscription model, Scratch have quickly carved themselves a niche in an industry desperate for greater diversity and ingenuity in what’s on offer, with greater than 90 percent of Australia’s dog food industry owned by one of either Nestle, Mars or Hosen Capital.

But while seeking to offer healthier food solutions for dogs sat at the core of Halligan and Scratch’s mission, food quality was not the only industry area in which Halligan and the Scratch team identified they could make improvements on the industry standards. For Scratch, this required greater focus and the maintenance of perspective.

“We set out from the start to make Australia’s most trusted pet food company and deliberately not try to get too big,” says Halligan, “When you’re not trying to grow as fast as you can and judge yourself on being the biggest, it frees you up to really consider the cost of doing business and how you can minimise it.”

A focus on this cost saw Halligan and co-founder Spiegelhauer pushing forward with sustainability goals front of mind for their company’s ambitions.

“My business partner Doug and I decided to join 1% for the Planet from day one, and have been donating long before we were making a profit,” Halligan says, “These days we’ve hired more and more people who are attracted to our more responsible way of doing business and with every hire, we take our sustainability work further.”

Their efforts have quickly paid off, with Scratch achieving B Corp certification in January of this year, signifying the ambitious start-up’s position as a part of a collective of businesses designated to be “leaders in the global movement for an inclusive, equitable, and regenerative economy”.

Achieving such a goal celebrating its total social and environmental impact was an early ambition for Halligan and his team.

“It was huge for us, and a goal from before our first ever sale. The average person doesn’t have the time to dig into the operations of every company to work out whether they’re doing good or evil, so I’m a huge believer in what the rigorous B Corp standard can do for consumers. More than anything, I’m so appreciative of how it helps businesses become better and more impactful along the way.”

“It took us nearly three and a half years to build to our B Corp certification, as we had to learn and implement principles around governance, community and environmental sustainability to name a few. There’s so much to it, so I have ten times more respect for other B Corps having seen the effort and investment that goes into them,” Halligan continues, “We’re Australia’s only B Corp pet food and I think fifth in the world so it’s a huge honour to have our sustainability and responsible business work recognised.”

Such was the immediately obvious potential and value of Scratch’s business values and the product it sought to deliver, Australian surf legend and Order of Australia recipient Mick Fanning came on board as an investor for the start-up in early 2020.

“We love honest, dependable and respectful people who know how to have a laugh and enjoy their hard work,” Halligan says, opening the door for other famous faces to follow Fanning’s lead and jump on board, “Ash Barty – let’s chat!”

Scratch co-founder Mike Halligan and new pal Mello, pictured here pleased to be photographed.

Now, still riding its wave of success, Scratch and co-founder Mike Halligan show no signs of wanting to slow down and rest on their laurels. And the love of dogs ultimately behind Scratch’s initial conception remains as strong as ever, with Halligan now enjoying the company of new best friend Mello to continue offering him inspiration – and keep him on his toes.

“He’s a 6 month old Nova Scotian Duck Tolling Retriever,” says Halligan of his young companion, “He’s a ridiculously smart, pretty active pup but with a good off switch.”

“He’s a great puppy and learning the world fast, but we still have to keep on our toes when he’s on a walk as he’s known to snap up anything with even a passing resemblance to food before you know it’s even there!”

And on what Mello is like as a colleague in the office?

“He’s demanding. Sometimes moody. Always hungry! As long as his bowl is full of food a couple times a day, he’s a great dog, but if we have too much going on and he’s too excited to sleep, he becomes the office grouch!”

Luckily for Mello, he doesn’t have to look very far for quality food options.

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