Coffee Pro Pivots to Building Dog Utopias
Neil Gill is the president and CEO of Phoenix-based Dogtopia, and is very enthusiastic about the business, but comes from Praise International, a subsidiary of Gloria Jeans Coffees where he helped turnaround and reenergize the brand in North America. He’s hoping to pull the same old tricks in the franchised dog space.
After Gill and an investment group called TFS, headed up by Peter Thomas, purchased the business outright in 2015, he’s been focused on reinventing the doggy daycare, boarding and spa service provider that’s grown to one of the largest pet-focused franchises in the biz.
With approximately 50 total units, with a handful up in Canada, Dogtopia has geographic concentrations in the Mid-Atlantic states, Florida, Texas, and Michigan. When we spoke at the tail end of 2016, the brand had another 40 franchise agreements signed, suggesting its fast-paced growth is set to continue.
In addition to a roster of changes throughout the system, Dogtopia now has three location prototypes ranging from 3,000 square feet up to 10,000 square feet depending on the site and the area’s demographics. Through experimentation, the brand has learned that retail centers with daily use traffic (think coffee, grocery, pharmacy, etc.) work particularly well for the brand, making doggy care and services as convenient as all the stops to maintain our own, human happiness.
Part of the brand’s repositioning comes through research on modern pet owners, which has included the nugget that female millennials who have delayed having children are in some cases substituting dog ownership for kiddos—making them the brand’s primary demographic focus.
At this point, approximately 65% of the brand’s revenue comes from daycare and boarding, with grooming making up approximately 10% of the mix. The thinking for future growth is simple: daycare and boarding customers will be interested in additional services after forming a relationship with their local Dogtopia ‘zee.
“What’s really interesting is the dog then starts to demand to go more often,” Gill said of the brand’s stickiness with its customers. “Owners then start to see a real change in behavior with the dog ... it’s calmer at home.”
From our conversation, it’s clear Gill is keyed into the explosive growth of the American pet category, which is said is one of the fastest growing sectors in North America. He likened the experience to assisting with the growth phase at Gloria Jeans.
“Awareness of dog daycare in the general public is still very very very low,” he said. “There’s massive opportunity and upside as we start to educate pet parents about the benefits of daycare and as that awareness increases our brand awareness increases.”
Seeing a fragmented pet category reminds Gill of the pre-Starbucks days of the coffee industry. With more stores than any other “branded daycare” provider in the pet space, he suggested the brand is perfectly positioned to take advantage as the category explodes and becomes more sophisticated.
“When I started looking at the next opportunity [after Gloria Jeans], there were three sectors … pet care, health care and the third was age care—all three of those are booming sectors,” he said. “When I looked at the opportunity with Dogtopia, it became really obvious this is a sector that had such growth potential—there are 84 million dogs in North America [and] 36% of all households own at least one dog.”