So Cal Entrepreneurs: A Dog Food Horror Story
The Healthy Spot, founded by Andrew Kim and Mark Boonnark. This story originally ran online in 2015.
Andrew Kim couldn’t stand the thought of his dog falling ill during a major pet food recall in the Bay area in 2008 and a business idea struck him that alarmed his parents, hard working Korean immigrants.
Andrew took his degree from UC Berkeley and had used it to secure a comfortable position as a researcher for an equity hedge fund firm. Concern for his dog and other pet owners kept gnawing at him and he used his professional skills to dig deeper into the marketplace and what opportunities existed. Andrew concluded he could start a business and fill a niche in the pet food industry by providing high quality pet foods.
Andrew and his business partner Mark Boonnark discovered a mid-market position for quality that wasn’t available in the Big Box retail outlets and with price points that didn’t scare away most buyers like those found in boutique outlets. “We saw the need to be advocates for pet owners and their dogs,” said Andrew.
His parents didn’t understand the concept. His mother owned several donut shops and his father was an independent contractor. They saw their businesses as necessary since they didn’t have a strong education with degrees behind their names. Andrew and Mark assured them and the industry naysayers that the numbers of dogs in households in 2008 was growing while the number of children being born to a mother and father was on the decline. There was a lifestyle to tap into and Andrew who has four dogs had a personal understanding of the trend.
For the Community
The first Healthy Spot store opened in Santa Monica and the company launched with four employees. Now, in the first quarter of 2015, the company is doing fine with a sixth store that opened recently in Studio City. Products are sold along with award winning grooming services and a doggie daycare that closes on Sundays in order to provide pet adoptions.
Each store has a similar look and feel with warm pastel colors but it’s not a cookie cutter design. Andrew sees the subtle distinctions as a way to brand the company. “We’re here to be part of the community. We want to create a friendly, fun environment. People stop by in the morning or afternoon walks with their dogs and that’s what we’re here for. Andrew said he wants Healthy Spot to be like the bar on the legendary television show Cheers, a place where everyone knows your name.
Clearing the Shelves
It was a gutsy decision to open up Healthy Spot and carve out an industry-specific niche. Running a business requires making on-going decisions and selecting the right manufacturers is key to the company’s success. Since products are a major reason why dog owners enter a store, Andrew and Mark have been highly selective over the manufacturers they carry and the ones they don’t.
At one point, an established family-owned company that was 40 years old, Natura, occupied about thirty percent of Healthy Spot’s shelves. It had a loyal following and then it was bought out by Proctor and Gamble. Not long after the company changed ownership, it experienced its first recall ever. Ingredients that were lesser in quality were being used and Andrew and Mark got rid of every Natura product in the stores. The two had made a promise to customers and a pet food recall was what led Andrew to research the validity of his business idea. Deciding to keep Natura or get rid of it carried risks.
“We had customers who were loyal to the Natura brand and we had neighbors that were selling it. So, yes, our business could have taken a big hit.” Andrew said that most small manufacturers who make the leap to Big Box outlets end up experiencing a food recall. “At the mass market level, the model forces companies to change ingredients and manufacturing processes.”
Andrew and Mark personally walk the stores, listening to customers as do the employees. The feedback helps them make product selections and keeps them up to date on styles. Stylish leather collars and leashes may do well in some locations while in other stores they’ll yield to more colorful and sporty brands.
At the Healthy Spot, organic ingredients make it possible for dog owners to snack treat that are palatable for their pets. I ate a cranberry cookie made by pet food maker Grandma Lucy, based in Irvine, California, and it tasted just like an animal cracker. Pun unavoidable.
Andrew and Mark screen manufacturers based on the ingredients and the company’s ability to manage and sustain a long-term operation.
Andrew was clear that his operation has its own sweet spot — a place that makes it healthy and profitable to operate. And perhaps that’s why Los Angeles with its maze of distinctive neighborhoods was a sound launching pad. “We excel when we can integrate ourselves into a smaller community and be in a larger urban environment. That’s where we get the viral effect and be in the local dog community.”
Giving back is part of the business model. Customers are given the opportunity to round up their purchases to the nearest dollar with proceeds given to local charities. To date, the company has raised $125,000.
While the Studio City location at 12205 Ventura Boulevard is the most recent store to open up, the area was the first one scouted since Andrew had grown up in the Valley. Offers from other communities in Southern California and across the nation come to Healthy Spot on a regular basis but Andrew is clear that a business owner can never forget the power of strategic decision making. “My mentor says it’s like being at a buffet and you’re tempted to try everything.”
It’s a discipline to focus on the core of what makes a business successful and bypass opportunities that look appealing but ultimately may cause management headaches and damage the brand.
In the meantime, Andrew says his parents have accepted the business and what it means to be an advocate for pets. They’re willing to care for his brood: Mya, a Shitzu-terrier mix who was the inspiration for the store; Lucky, a Boxer; Bogey, a Maltese; and a mixed breed named Boo. “We’ve come full circle. When I was growing up, our dogs had to stay in the backyard. If I go out of town, my parents come to watch my dogs and they enjoy the comforts of home.”
Andrew and Mark’s concept has flourished beyond the initial five-year phase when many small businesses struggle and don’t survive. Supplied by quality manufacturers, welcomed by dog owners, and supported with well-trained professionals who provide services like dog-grooming, the Healthy Spot is positioned as the top dog in its niche.
About the Author
Don Simkovich, MA is the author of non-fiction, fiction and creates marketing content for professionals and growing businesses.
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