And still does. In 1991, the foundations were laid for what is now called WHIMZEES: vegetarian dog snacks, made from starch and, through skillful technical innovation, available in all sorts of geeky 3D shapes such as hedgehogs, crocodiles and toothbrushes. They act as dog toothbrushes. A hit. A very big hit, in fact. More than 120 million WHIMZEES are sold each year in over forty countries, especially in the US.
NOM was closely involved with creator and manufacturer Paragon Pet Products as an investor from 2011 to 2016. On June 20, 2019, the King's Commissioner will open a brand new expansion of the factory. Still in Veendam, despite being acquired by an American party more than two years ago. Over 2,500 square meters of production capacity with brand new machines, a laboratory and a WHIMZEES experience room will be realized: CFO Christiaan Rolf is happy to explain how this came about.
Scientifically sound snacking
Actually, everything about this dog snack is innovative. The product is originally a result of research by Avebe in cooperation with Wageningen University. What can be made with potato starch? What can we do with biodegradable plastics? How do we produce circularly? Research was done for quite some time and showed that a healthy dog snack could be made from starch in combination with a number of other solid and vegetable ingredients. And in a special form, too. 'We used technology from the plastics industry and the automotive industry to make something truly unique. That explains, for example, why we can make such beautiful shapes. Those shapes have a function, the structure makes a dog's teeth cleaner, but of course they also appeal very much to the imagination' explains Rolf.
We had no choice but to bring our entire range to the U.S.
It's 2010. The product is right, nice sales are being made and Paragon thinks it's time to capture more market. They want to go to the US. But the economic crisis is still there in all its glory, so capital is lacking and the company is not in good enough shape to cross the ocean on its own. That's when NOM comes into the picture. They decide to participate in the company with the charming dog snacks.
Rolf: 'That NOM stepped in gave us financial leeway, but also a solid story to banks. From the beginning it has been a very pleasant and constructive cooperation. And in that cooperation we managed to take our first steps in America.' Then things moved quickly. Rolf: 'Our people went to a trade fair around animal feed in Orlando. We didn't have a stand; the idea was to find out whether there was demand for our product, but also for which assortment exactly. Which snack, to be more precise. We thought: if we can put together a top three, then we'll enter the market with those three types of snacks first. But America was so enthusiastic that we really had no choice but to present our full range. So we did.
Standing out on the shelf
WHIMZEES will be available in pet stores across the US from then on. A good spot on the shelf is essential, so Paragon is working hard for that. 'If you have a prominent spot, you will be bought. We have a unique product, but if no one sees us, there's no point. Putting energy into that has caused us to become very popular in the U.S.' says Rolf. Not only did this special snack catch the eye of dog owners, but also parties in the same market. WellPet, a large family business in pet food, showed interest in the company from Veendam. They have several brands under their belt and the values of both parties corresponded: health, sustainability, social commitment and a great
love for animals. There was a match.
Exciting and logical step
So it is that Paragon has been in the hands of this large American company for more than two years. An exciting, but also logical step, Rolf recalls: "They have the marketing and sales capacities, we have the sophisticated production technology and a unique product. This acquisition has been very positive to both parties. They help us grow in different countries and this allows us to focus on our factory, the processes and our innovations. I believe very much in that focus.' And that focus is paying off. By, under the leadership of COO Felix Müller-Ohl, constantly refining, optimizing and innovating the production process, Paragon, for example, is able to run 24/7 production with just three operators. Wherever possible, robots have been deployed, or the process has been optimized so that human contribution is unnecessary. 'We received an AA score for the third time in a row from the BRC, a global standard that monitors production processes in the food industry. That is the very highest score and very unique. In our factory for dog snacks we do better than many factories where
food for humans is made. WellPet is now going to fly in our knowledge and expertise to improve all their factories and processes as well.'
Our new factory is just the beginning
With a parent company in the US and so many lessons still to be learned there: wouldn't a move to the US make more sense? Rolf: "No, that's not going to happen. Machines and processes are easy to move, people are not. And our people have so much knowledge. They, despite all the technological innovation today, still make the difference. WellPet knows that too. They give us room to do business, really see our value and invest in it. This expansion came about thanks to a multi-million dollar investment from WellPet. We can't just move. We just stay in Veendam and this expansion is just the beginning.'
As an FDI person, I think it's a wonderful story that such a high-quality company has emerged from the traditional potato starch industry and is now conquering the entire world from the northern Netherlands. And the acquisition by Wellpet only enhances the profile of our region.
Wim A,B. Project Manager Foreign Direct Investment
