When brothers Nate and Zach Phillips adopted their first dogs as adults in 2013, they were surprised that little had changed in the pet food aisle. "I was standing in the middle of the store, and I was like wow this is exactly what I remember from 20 years ago," said Nate Phillips, co-founder and CEO, NomNomNow. With little differentiation between the brands, they found it difficult to know which food was best for their dogs' health.
But when Zach's dog Harlee came down with mange, a skin disease that can be caused by a weakened immune system, he was forced to rethink his dog's food. At the recommendation of a vet, Zach began preparing a fresh food diet for his dog, and within days the condition had cleared up.
This sparked an aha moment of sorts, and the brothers were convinced they were onto something. So, out of their San Francisco apartments, they began testing fresh dog food recipes and sharing samples with friends, family and people at local dog parks. By 2015, they had a basic website and paying customers, and out of that NomNomNow was born.
The business has become decidedly more sophisticated, and NomNomNow has long since moved out of Nate and Zach's apartments and into headquarters in Oakland, Calif. Now, the company has closed $10 million in Series A funding to continue its mission of delivering fresh, custom portioned dog food to pet parents. The round includes participation from Bullish, CircleUp, e.ventures, Tandem Capital, Greycroft and others. This brings company's total funding to $13 million, which includes a previously unannounced seed round from 2016.
Last year, pet food sales in the U.S. hit almost $30 billion, according to the American Pet Products Association. As an industry, the innovation in pet food had largely remained stagnant, but as human food trends began to shift in favor of transparency, quality ingredients and health benefits, the pet food industry began to mirror that. And for the 95 percent of pet owners who consider their pets to be part of the family, they were looking to upgrade their furry family member's meals.
NomNomNow's dog meals are made-to-order with fresh, locally sourced restaurant-quality ingredients. Currently, the company offers five choices, including high protein, vegetarian and grain-free. Every meal is portioned into single servings based on an individual dog's weight, age and breed and are prepared packaged and shipped from NomNomNow's facility 40 minutes from headquarters in Pittsburg, Calif.
All of the recipes were formulated by the company's chief nutrition officer Dr. Justin Shmalberg. He is also a practicing vet and clinical assistant professor of integrative veterinary medicine at the University of Florida, and one of less than 100 board-certified specialists in small animal clinical nutrition in the country.
NomNomNow is also part of a small number of companies reinventing the model for buying pet food. Traditionally, pet food was purchased through retailers, but the company is taking advantage of the growing popularity of e-commerce and delivering its dog food to customers' doorsteps across the U.S. The average order size is between $35-42 for 14 meals a week, and it is a recurring subscription, because as the company sees it, people are buying into a lifestyle change for their pet.
"We have failed if people are like that's a treat or if they throw in a little fresh food as a dessert," said Nate Phillips. "We are telling you what you feed your pet matters, and we believe fresh food could help with their health."
And there is strong evidence that fresh food does make a difference. One study found that dogs fed leafy-green vegetables at least three times a week were less likely to develop bladder cancer by 90 percent, and dogs fed yellow-orange vegetables decreased their chances by 70 percent.
The fresh dog food category is still nascent, but there are other startups like Ollie, The Farmer's Dog and PetPlate in the space. But Nate isn't concerned with battling it out for market share with other fresh pet food providers but is more interested in exposing people to the concept. "Ninety-five percent of our customers are coming from kibble, and they didn't even know fresh existed," he shared. "It is very much category education and category growth at this phase."
And the reality is that kibble sold via retailers is still the biggest competition, and companies like NomNomNow will have to contend with large CPG companies that have their eye on the natural pet food space. Last month, J.M. Smucker bought Ainsworth Pet Nutrition, which includes Rachel Ray's premium pet food brand Nutrish for $1.9 billion. In February, General Mills acquired Blue Buffalo, the leading natural pet food brand, for $8 billion.
"They bought companies that were started 7-15 years ago where the innovation was better food but same form factor," said Nate Phillips. "So, maybe better ingredients, but it was still the kibble, still the distributor, still the retailer and still the customer doing all the work. What we are seeing now is direct-to-consumer and personalization."
NomNomNow is still in its infancy, but the company said that it already has thousands of customers and is doing millions in revenue. From December 2016 to December 2017, it experienced 650 percent growth. With its new funding, the company will expand operations and production capacity across the country, invest in product development and hire more skilled people to support its growth.