Frank Burdzy, President and CEO, Champion Petfoods [Edmonton]
We market our foods to about 75 countries out of Canada currently, and we’ll continue to expand that as we finish our facility in the United States.
Champion Petfoods has been exporting foods for almost 30 years now to a variety of country. The United States is a market we introduced before my time but about 10 years ago, and that market has been growing very, very quickly for our companies. We just found that we were at the stage now where we needed to look at expanding our capacity somewhere, and it made most sense to do it in our fastest-growing market, which was the United States.
Our focus as an organization is we focus on making our pet foodswe have a saying called B.A.F.R.I.N.O. which is Biologically Appropriate, Fresh Regional Ingredients, Never Outsourced.” It means we require a significant amount of fresh meats, fish, vegetables, fruits—a lot of agricultural produce that we can put directly into the pet food so that it’s as fresh as it possibly can be. So we started the process in the United States of really looking at the sources of the ingredients, and where we thought we could access the most fresh, regional ingredients. And we identified about six or seven states that we thought could qualify, and then the next move for us was really to go and visit all the states and look at the countryside, talk to agricultural producers, and of course talk to state officials about what they thought was possible both in terms of economic support, but most importantly helping us to get connected with our key suppliers. And really Kentucky right from the very start was probably the most collaborative, most aggressive in terms of supporting us to meet people, and Governor Beshear was very active right from the very first to engage us and try to convince us that Kentucky was the best state to be in.
I think what happened right from the Governor’s level right through his economic cabinet and throughout the whole government organization, I think what they did is they got to know us first, and got to understand not just our current capability but our future potential. I think in very many ways what they were doing was investing time and effort and dollars into the future potential of the company.
We announced that we invested around $85100 million was the capital investment that we’re making in Kentucky to start. And the Kentucky government, through it’s economic development cabinet approved approximately $1011 million in incentives, mostly tax-related incentives.
The key thing is our whole philosophy as an organization is to make the highest-quality pet food we can make from fresh regional ingredients. So we don’t pretend to or could ever strive to be the low-cost provider—that’s not our business philosophy. It’s really to look at what we can provide to our pet-lovers around the world that will see they will get value for the dollars that they’re paying for the food that we produce, and the only way that we could do that is to have it done in a sustainable manner, working directly with farmers and fisherman to make sure that their practices are admired around the world, and that’s part of our whole offering to our customers.
From the very beginning when we were first contemplating looking into the United States as a potential location, SelectUSA was definitely critical to help us understand some of the processes that we should go through. Because we’re a relatively small company, we had all of the leadership of the company engaged directly—we didn’t hire a bunch of consultants to go work on our behalf. So SelectUSA was extremely valuable in helping us understand the steps to take and how to consider different issues, whether it be market entry or taxes or setting up a corporation in the United States, they helped us with many of those steps, as an extension of our organization basically.
In the United States the pet food industry is regulated by the FDA, so it’d be the same as our human food consumption or I think we»re in the same category as baby food in terms of degree of regulation. So we’ve been selling into the United States now for 10 years, so we had a very good idea of the requirements, but again an organization like SelectUSA was able to help us get even further information and contacts, make sure that as we were contemplating building a new facility there that we make sure we have the right information.