When David Collado took over Happy Howie’s in 2011, the dog-treat
manufacturer located on Detroit’s west side was losing money and had seven employees making less than $10 per hour. Now, the company is well in the black, has 20 workers making $11 to $16 per hour — some as much as $50,000 per year, and is featured in a national Capital One Bank ad campaign.
With Collado at the helm, Happy Howie’s sales have grown steadily to $4 million last year from $500,000 in 2011, mostly by applying fundamentally sound business practices to the enterprise, which started life in the 1990s as Oinkers, a pig-ear dog treat processor.
Collado, a graduate of Grand Valley State University near Grand Rapids, was working for Happy Howie’s owner, Stan Dixon, who was contemplating closing the business.
“In August 2011, I heard the Happy Howie’s general manager had put in his resignation and I asked Stan for the opportunity to see what was going on,” recalls Collado, who was 27 at the time. “When I got here, the company was losing thousands of dollars a month. I took it one day at a time and just implemented some common-
According to Collado, the previous management team waited for customers to make payments before purchasing raw materials to fulfill an order — a process that took up to two months. As a result of the long lead times, Happy Howie’s couldn’t sign contracts with Meijer or Trader Joe’s. “I told Stan I needed $10,000 to $15,000 to buy inventory, so I had stock to reverse that pattern and shorten the lead time from six weeks to a couple of days,” Collado says.
The previous managers also had put off preventive maintenance on the company’s food-processing equipment, in an effort to save money.
“When I came in, a lot of the equipment was in very rough shape,” says Collado, who again went to Dixon to ask for another injection of cash. He also invested $21,000 of his company’s Capital One Cash Back awards on new machinery, which led to the company’s inclusion in the ad campaign that started in May.
Slowly but surely, the tide began to shift. The combination of common-sense business practices and the quality of the Happy Howie’s product worked. The timing also was right, as more consumers today favor organic and naturally produced pet food.
“What makes our products different is they’re all-natural, with no artificial ingredients, and we use all U.S.-sourced ingredients,” Collado says.
He notes that all the company’s products are made using beef and turkey from the Midwest, and most of its other raw materials are purchased from Michigan suppliers. In total, the company buys approximately 120,000 pounds of ingredients every month.
“A lot of dogs are exhibiting allergies to corn, wheat, and soy, so we don’t use any of those allergens or nitrates,” he explains. “Our main source of preservation is old-fashioned — slowly drawing out that moisture, (then) slowly dehydrating it. By slowly drawing out that moisture, we end up with a nice, tough, chewy product that dogs love, and it’s also something that’s shelf-stable for a year.”
Each workday begins before dawn with a team meeting, which includes a review of the previous day’s deliveries, any safety incidents, sales, and the current day’s production plan. How much of what products are needed, in what order, and what can go wrong are discussed, as well.
After the meeting, the “show” begins in earnest when a mixer inspects the ingredients he will use for the day, along with reviewing his schedule of production batches. Once past inspection and properly measured, the ingredients are transferred to a specially designed, German-made grinding machine capable of processing 600 to 1,000 pounds of meat per hour.
When the meat and other ingredients are blended, the combination goes to sausage- and burger-makers. “They touch every single burger or sausage that comes off the line,” Collado says. “After carefully hanging the sausages on a rack, or putting the burger on a tray, they’re loaded into an oven that slow-cooks them to perfection.”
After a few days (depending on the treat), the quality manager inspects the treats and performs a test to determine if they’re finished cooking. Once the quality manager places a seal of approval on the products, the team moves the treats into the packaging department, where they receive a final visual inspection before being hand-packaged, air-sealed, boxed, and placed on pallets.
From there, the boxes are shipped to distributors across the country. Since Collado took over, the customer base has grown to 4,000 stores nationwide, up from 500 stores. The customer base includes large operators like the Pet Supplies Plus and Premier Pet Supply chains. “All this culminates in the special moment between a dog and its owner, that moment when the pet parent gives his or her dog a Happy Howie’s treat,” Collado says.
The company’s success has meant Dixon hasn’t had to inject more capital into the operation. “As a company we’ve been self-sustaining our growth for the last three years,” Collado says.
For long-term growth, he says Happy Howie’s needs to get its products into grocery stores and other large pet store chains, and boost online sales. Currently, 5 percent of sales come from the company’s website. “We’d like to rekindle that relationship with Meijer and with Trader Joe’s, and we’re reaching out to Petco and Pet Smart,” he says.
With the growth, Happy Howie’s is now shipping 20,000 pounds of dog treats a week, up from 4,000 pounds in 2011. Once the company reaches $15 million in annual sales, Collado plans to build a new 45,000-square-foot facility behind his current 22,000-square-foot operation.
“We have to grow to about three times our size before we can build,” he says. “We really want it to be here (in Detroit). We have a great location and we have an absolutely spectacular team, and we don’t want to lose anyone by moving to a location too far away.”
Collado says he would like to build a new factory by 2023, although he says the exposure from the Capital One campaign could speed the project up. “This is a once-in-a-lifetime opportunity to tell our story to the world and make even more dogs happy,” he says.