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Pet Ecology Brands’ five patents guarantee that their technology will
produce a better quality product than any of the majors that are in the market place today
Pet Supplies
(PECB-OTC.PK)
Pet Ecology Brands, Inc.
14822 Venture Dr.
Dallas, TX 75234
Phone: 972-759-8080
Ralph J. Steckel
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
August 21, 2006
BIO:
Ralph J. Steckel, President, Founder, CEO, Director
Ralph Steckel has served as President and as a Director of Pet Ecology Brands, Inc. since
its inception. His career has specialized in consumer products marketing, with added
emphasis on new product development and market introduction.
Mr. Steckel spent eleven years in Marketing at the Colgate-Palmolive Company, most notably
leading many groups in strategic planning. He has also served as a consultant to
Alberto-Culver, Dow Corning, S.C. Johnson, Conair, Rit-Dye, Sterno, Ray-O-Vac, Curity
Products, Bausch-Lomb, Westwood Pharmaceutical, Ralson-Purina and many others.
A graduate of the University of Baltimore with a BS
degree in Marketing and Public Relations, Mr. Steckel has done postgraduate work at the
same institution in Business Economics.
Commenting on Pet Ecology Mr. Steckel said,
"This product line is an open door to the future of pet care for us. Indications are
that the industry is moving toward 'natural,' 'organic' and 'holistic' products at a fast
pace, as they've been in the human market. We plan to be a part of this future and feel
like we're ahead of the curve in many instances."
Company Profile:
Pet Ecology Brands, Inc. is a publicly held corporation. Since 1996
Pet Ecology Brands, Inc. has been an innovator in the development of pet products designed
to improve the well-being of pets and their people. Its mission has been to develop and
manufacture technologically advanced earth-friendly products that are safe for pets,
people and the planet. The company was formed to solve certain important aspects related
to pet health care and maintenance.
PRODUCTS
Scientific Professional Cat Litter with Sickness Indicator
In 1998, Pet Ecology Brands, Inc. developed this
revolutionary patented cat litter, Scientific Professional Cat Litter with Sickness
Indicator. It clumps, flushes, destroys litter box odor, and is earth-friendly. The litter
is ultra-lightweight and convenient to use (3 lbs. works like 21 lbs. of clay/sand based
products); it is 100% flushable and safe for sewer and septic tank systems. It is
completely safe for cats and our environment. It has the ability to help indicate feline
lower urinary tract disease (FLUTD) in cats. The technique used is similar to that found
in Merck's Veterinarian Manual. However, this litter not only warns of possible
illness, but may also help indicate how far along the illness may be by the color the
litter changes to, thereby providing the pet owner significant additional benefits and an
early warning system concerning the cat's health. Scientific
Professional Cat Litter clumps turn varying shades of pink to magenta if the cat
has a higher than normal pH- a precursor to struvite crystal formation and an indicator of
possible infection or urinary tract irritation caused by an abnormality in the urinary
tract. The convenient Indicator Chart on the package helps cat owners determine when the
cat’s system is out of balance, how serious the imbalance may be, and when they may
need to contact their veterinarian.
K-9 Fat Free Dog Treats
Pet Ecology Brands also developed a product to address is the unhealthy weight gain
experienced by many dogs in the U.S. and major city centers around the world. According to
U.S. News & World Report, "the number one health problem for dogs is
obesity." Today, dogs are fed fat rich food and treats, typically on overabundant,
scheduled feeds. And dogs often get significantly less exercise than required to maintain
an ideal weight and healthy condition. A fat rich diet, especially when coupled with
inadequate exercise, can create very unhealthy pets that are at risk from the same
physical disorders that people experience from weight gain and lack of exercise. These
include heart and lung problems, skin and kidney diseases, and circulatory and immune
system problems.
Pet Ecology’s K-9 Fat Free
Dog Treatsä offer dog owners an effective means to give their pets a healthy treat
without contributing to fat intake. They are 100% fat free and also cholesterol and sodium
free. K-9 Fat Free Dog Treats are made with rice, natural meat flavor, and garlic and are
the first fat free treats on the market that meet the standards of the U.S. Department of
Agriculture.
CEOCFO: Mr. Steckel, will you tell us about your background
with the company?
Mr. Steckel: “My background consists of being with
Colgate Palmolive Co (NYSE-CL) for a number of years in new product development. It also
included worldwide marketing examinations and exploring opportunities to get our products
in places where they should be.”
CEOCFO: What about your
background with Pet Ecology?
Mr. Steckel: “I am the founder and the developer of the
brands that we are making today. I am not a lone ranger here because the team that
surrounds me is made up of high profile professionals. We as a group take some of the
ideas that we nurture and find the vulnerabilities in the pet care industry and try to
move them to a wider space-- such as the cat litter business. The cat litter business has
been a dormant business since 1947; it does about a billion dollars a year in gross sales
and it is growing at the rate of six percent a year. However, when you look at the players
in that industry, it is rather dormant and relatively stagnant because most of the players
are harvesting the sales out of a clay clumping type of agent. In order for us to
penetrate that billion-dollar category, we have to come up with new technology, thing that
are not there today and things that can improve the existing business as it is. For
example, our particular cat litter called Scientific Professional Cat Litter, is a light
weight aggregate that is flushable, virtually dust-free, has all the characteristics of
clay, however it does one more thing, it can tell you when your cat might be sick, which
no other cat litter can do.”
CEOCFO: How does it do
that?
Mr. Steckel: “We have five patents on the process that
helps indicate a high alkali factor in the cat urine. A high alkali factor in the majority
of the cases will indicate that that cat has a urinary infection, which is the number-one
reason for visits to the vet. We have taken that concept, developed it, and skewed it down
to a professional business. For example, a veterinarian will get a client that comes in
and says, ‘Doctor, my cat urinated in Scientific Professional Cat litter and it
turned pink; it says on the bag come to you and let you examine this cat to verify that
the cat in fact does have a urinary tract infection.’ In those cases that is exactly
what happens.”
CEOCFO: How long has the
product been available?
Mr. Steckel: “We just started a major push on the
product in early 2006.”
CEOCFO: How are you
making that major push?
Mr. Steckel: “We are doing it through an channel focused
sales force that work with pet specialty brokers and distributors. The marketing is done
here in this office through Deborah Evans, our director of marketing. That concept has
parlayed over to our sales team, which is headed by Randy Frederiksen who was one of the
strong-arms at Church & Dwight Co. Inc. (NYSE: CHD)/Arm & Hammer. He takes our
concepts to his sales team under him that call on the vets and the wholesalers that supply
retailers.”
CEOCFO: Have you picked
up some distributorships in the last few months?
Mr. Steckel: “We have added major distributors
domestically in the last several months, but more importantly, we went to the Nuremburg
trade show, Interzoo, in Germany, attended by Debbie Evans and it actually exploded in our
hands; we did not expect that type of reception. At that tradeshow, we opened up nine
countries, and when I say opened them up I mean actually shipped goods there. They range
from Taiwan, Netherlands, Romania, Israel, China and Japan. That show was very exciting to
us because we didn’t expect that kind of reception.”
CEOCFO: Is it the
flushability and the ecology or the cat sickness part or is it a combination of both?
Mr. Steckel: “At advertising agency meetings, they
continue to tell me that we have too much sizzle; we are not entitled to this much sizzle.
We developed a brand better than the consumer expectations. For example, there are a group
of people that could care less about sickness but they care about the eco factor; the fact
that it is safe for the planet it is flushable and biodegradable. Another group likes the
convenience factor that you can pick up the whole tray, take it to the commode and boom,
boom flush and put it back down with no baggie. Another group likes the convenience of
having it shipped right to their door. Therefore, there are multiple factors and every
week somebody tells me something they like. In order for us to compete in a category of a
billion dollars a year against some of these giants, we have to have technology better
than them. That is the only reason we are participating in this business because our five
patents guarantee that our technology will produce a better quality product than any of
the majors that we see today in the market place.”
CEOCFO: What about the
cost factor?
Mr. Steckel: “The cost for the consumer is the same as
clay. It could be little more in private and independent stores because they have to go
through a wholesaler. That is the good part about it again and that is the fact that we
offer all these benefits at very near the identical price of clay.”
CEOCFO: I guess the
question is once people know about Scientific Cat Litter, why wouldn’t they want it?
Mr. Steckel: “We have twenty internet orders today that
I am shipping out. People can’t find it so they call and order through the internet.
I also find that the people in foreign countries, particularly Hong Kong, love the fact
that it is so light-weight and when you live on the 99th floor and you want to
get rid of your cat litter, it is the best way to have disposability and at the same time,
not hurt the earth or the landfill.”
CEOCFO: Everyone wins!
Mr. Steckel: “That is correct. A lot went into the
product as you can see. We have our arms now around the component parts and we are moving
forward as fast as our little legs can carry us. You may have seen some of our ads in
Oprah magazine; there are three full-page ads that have done tremendously well for us.
That has awakened around eleven million people each time it runs. We are getting well
known and on our websites we are getting over a thousand hits a day and we are exploiting
that end of our business because we are putting a lot of money in infrastructure by hiring
the best people we get our hands on. Some of this talent comes from companies like Pfizer
Animal Health (Pfizer Inc.-NYSE: PFE) Church & Dwight, Nabisco (Kraft Foods Limited)
and Arm & Hammer. We have additions to our staff that we feel will help us carry this
forward in the marketplace.”
CEOCFO: What about the
manufacturing of the product, particularly since the growth has started a bit sooner than
you expected it?
Mr. Steckel: “We have a facility in Waxahachie, Texas
that has the capability of producing fifty million pounds a year. Just to put that in
perspective, the total cat litter business in the landfills each year totals about eight
billion tons of clay. Therefore, the landfills are becoming very congested, too.”
CEOCFO: You have other
products as well, correct?
Mr. Steckel: “Exactly! We have a fat-free doggie treat
that was meets USDA standards for fat free, and is the only fat free dog treat in America.
It has chicken, beef and liver flavors and also has no calories cholesterol or sodium to
worry about. We have placed ads in Dog Fancy magazine and the full-page ads have drawn a
lot of attention to the fat-free concept. Ms. Evans did some testing against the Milk Bone
brand (Del Monte Foods Co.-NYSE: DLM) and the IAMS low-fat brand (IAMS Company) and our
K-9 FatFree brand was preferred out of those two in two independent taste tests. We knew
from the git-go that we had a product that could withstand market pressure.”
CEOCFO: Development is
always expensive; will you tell us about the financial picture at Pet Ecology today?
Mr. Steckel: “We sell our shares on the pink sheets now.
We had a four for one split a while back, our stock is approaching the level price of the
split, and then profit takers came in and really handed us down to one third of the price
that we were selling. Our cash is coming from sales and investors. Our annual expense on
that, this company right now should break even around November of this
year.”
CEOCFO: What is ahead
for Pet Ecology?
Mr. Steckel: “The way things are going, it looks to me
that our international business deserves more attention than our domestic business. We are
spending more money domestically and gaining less return than if we would go
international. The international community embraces our concept more wholeheartedly
through the eco story, the biodegradable story, and the convenience story. The worldwide
interest is apparent and indicative of our forecast; we may start; focusing more of our
resources on the international arena.”
CEOCFO: Would that
include manufacturing facilities?
Mr. Steckel: “Yes. The good part about this is this particular product is that it is
a mineral base that is enhanced with a safe additive that monitors the ph levels in cats.
The minerals that compose the base are found abundantly around the world. The good news is
that this manufacturing machinery could be set up very inexpensively almost anywhere.”
CEOCFO: It sounds like
your only challenge is focusing on the growth opportunity!
Mr. Steckel: “Actually, that is true but also getting
the people to realize that we are here. Our challenge is to get the customer out there to
say, “Hey, look at this.” The advantage that the major companies have is their
ability to spend money on television, newspaper and advertising and afford the sliding
allowances and other ancillary charges that the market demands manufactures for them.”
CEOCFO: Why should
potential investors be interested and what should they realize about the company that
might not jump off the page?
Mr. Steckel: “One thing is that this particular company
is a paradigm company, meaning that it is one of the very few times that you run across a
company that has the ability to change a whole category. When you see the market of cat
litter in the US is a billion, and you see the European market as a billion plus and you
see an item that has the ability to alter and change the entire category; to me that is
very interesting. When you see our price point now on the stock market, which is a perfect
time to buy because once we get our buoyancy in that arena, we are going to always try to
keep our stock on the increase; that is our most valuable asset. Our shareholders to us
are number-one. We have about 3500 shareholders each of which are looking forward to the
growth of this business and as we grow, we look forward to break even. As we break even,
our earnings increase, as our earnings increase our stock increases. This is what you have
to look forward to.”
CEOCFO: Do you have any
final thoughts for our readers?
Mr. Steckel: “One good thing is that I hope the average
cat person who is affectionate to their cat, takes a look at our product because not only
are we providing them with a convenience, but, also a tool to help monitor their cat’s
health issue. Some of our best friends in this business are veterinarians; they very
wholeheartedly embraced our product because of the fact that we are in the cat health
business just like they are in the cat health business.”
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