From doggy 'fitbits' to DNA testing: inside Mars Petcare's plan to own a $200bn industry
With the pet care industry projected to grow by over $100bn in the next six years, Mars Petcare's former chief marketing officer turned innovation lead shares his blueprint for the future with The Drum.
Disruption from DTC competitors and nimble startups armed with data is just one of the challenges facing FCMG companies. However, Mars Petcare’s ex-global chief marketing officer has spent the past three years quietly building an incubator inside the business that he hopes will “futureproof” it against such threats.
Leonid Sudakov stepped down as Mars Petcare global chief marketing officer in 2016, spotting an opportunity to build out the FMCG giant’s technology and data ventures as president of its then freshly-created 'connected solutions' division.
What started as a business arm with “two-and-a-half people” was earlier this year solidified as Kinship – a Mars Petcare-owned accelerator that supports pet healthcare, nutrition and science-based innovators – chiefly startups – from within its walls.
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“I moved from being chief marketing officer and working with 1000 marketers from around the world to being part of a much smaller team, with this big agenda of creating a portfolio of businesses that looked like nothing else in Mars and supporting Mars Petcare in futureproofing its business in this new reality,” Sudakov said.
Kinship now boasts a core team of 200, tasked with finding and partnering with pet industry startups and letting them leverage Mars Petcare’s financial backing through several different investment schemes as well data tools and industry expertise to accelerate their businesses.
In return, Mars is opening up potential fresh revenue streams and gets a head start on the trends shaping the future of pet care, as well as access to up-and-coming talent and, crucially, consumer data.
Though it might be best known for chocolate, Mars has been operating in the pet care arena since 1935.
It counts 50 brands, including Pedigree Chum and Iams in its portfolio, but more significantly it operates several wholesale veterinary care providers like VCA and Banfield pet hospitals. Sudakov revealed that two-thirds of its employees work in services, not FMCG manufacturing as one might expect.
Early ventures and initiatives Kinship has invested in include: Whistle Labs (described as a “fitbit for dogs”) – which Mars actually acquired outright; Wisdom Health (23&Me-style DNA testing for dogs); and The Pet Insight Project (a scheme powered by Whistle that aims to “suncover the hidden relationships between dogs’ actions and wellness”).
Nutrition is also a big focus, with DTC upstart Wild Earth (a sustainable dog food business) benefiting from funding.
Along with Kinship’s christening in March, Mars revealed a £100m ‘Companion Fund’ for entrepreneurs addressing the needs of pets, pet owners and pet professionals. Sudakov reveals it’s invested in over 20 startups already.
'A coalition of partners'
If the businesses Kinship is investing in show anything it’s that people love their pets and are willing to splurge on a range of weird and wonderful products for the sake of their wellbeing.
The pet care industry set to be worth $202bn globally by 2025 (with Mars market share currently sitting at around 10% of that figure) and Sudakov has spotted an opportunity to build what he would say is a “coalition of partners” designed to drive the future of the industry.
“I’m passionate about the changing paradigm from ownership to collaboration. In a lot of early-stage business innovation contexts you can’t own a single view of the future, you have to be able to plant many seeds and start shaping the future as it emerges,” he adds.
Building an incubator from within the confines of a company that has been in the business for 80 years hasn’t been without its challenges. Kinship had to focus on investing in brands with a purpose instead of just throwing money into the market.
“Having a strong sense of purpose internally has unlocked so many things for us, including talent,” he explains, pointing to the hire of Collette Bunton who came on board as chief executive off Whistle Labs last year after tenures at Cisco, Roku, Neato Robotics and Lift Strategies.
“Five years ago Mars probably wouldn’t have been able to attract that type of tech talent that we need. The combination of having a sense of purpose, combined with an ambitious agenda is allowing us to bring in the talent that we need.”
Sudakov also underscored how being open and fostering a culture of an alliance between Mars and the startups it works with had been pivotal to Kinship’s success; it's not necessarily pushing the Mars brand when it's investing and promoting these startups, instead it's playing a longer game.
“The traditional [FMCG] view of creating a walled garden of solutions, own it and protect it doesn’t work. For us it’s so fundamental for us to recognise that we won’t own every startup in this area.
"Instead we want to benefit from being part of an ecosystem that includes them because that’s going to allow us to continue to be relevant, versus taking the old-fashioned approach of building everything from the inside.”
800 startups have applied to be part of Mars funding or accelerator programmes over the past 12 months; a figure Sudakov described as “mindblowing”.
On the marketing side, there is clearly an ambition to cross-promote the startups Mars is working with, or indeed other businesses, where relevant for "pet parents".
On the Whistle Labs Pet Insight Project, for example, Sudakov recognises that this data could be "very valuable" for the veterinary hospitals Mars operates like Banfield Pet Hospital which is a partner on the initiative.
"It makes it a lot more relevant to those pet parents that the company behind the partnering with Whistle on that program is the world's authority on veterinary science and also produces pet food," he says.
"It's really about finding what is most helpful to those pet parents."