RACING AHEAD OF THE PACK
Written on the 24 October 2011
THE Quinn family have turned their VIP Petfoods manufacturing business into a $300 million a year success story. Now the second largest pet food producer in Australia, the company employs 600 staff across eight factories. And as Gold Coast Business News discovered, the family that manufactures together, stays together.
Tony Quinn (pictured) is an unlikely success story in petfood manufacturing – a no nonsense Scot who thinks the world is going bonkers and many businesses are barking up the wrong tree.
He ought to know a thing or two. Now running eight factories and employing 600 staff, VIP Petfoods has annual revenues of $300 million and is achieving year-on-year double digit growth.
The 54-year-old is driven in equal parts by simplicity and dedication and has created a business where each of his five family members plays an integral role in the company’s incredible growth trajectory.
But now for the first time in 20 years, Quinn has hinted at a possible new venture. It would mean stepping out of the big picture, which has framed his VIP brand and netted him a personal fortune.
“It’s important for the business to continue on its march that I step outside. I would have never believed it 10 years ago, but you get exhausted,” says Quinn from his 7000 square metre VIP Petfoods plant at Yatala, located between the Gold Coast and Brisbane.
Having helped his father with a small petfood venture in Scotland, Quinn pursued a career in signwriting. It was there that his business acumen materialised after creating highly sought after products for the booming oil industry.
“There was an oil boom in Aberdeen and I built a sign company that became very successful after tapping into that industry. After three years I was earning more than the British PM Maggie Thatcher,” he says.
A high school chess champion, a wideeyed Quinn arrived in Perth from Scotland in 1979 with hopes of ‘teaching Australia a thing or two’ about signwriting. It was a risk, as the brash youngster assumed that Australia was ‘two or three years behind’ the UK with its neon technology. In fact, Perth was ahead and a bamboozled Quinn sought unlikely opportunities elsewhere.
“There was no internet and I’ve never really been one for market research,” he says.
“I had incredible success and thought I could do the same in Perth, but it wasn’t to be, so I set up a lawn mowing run called the Lawn Ranger.”
Quinn was earning $600 per week on his mowing run, selling it two years later for $18,000.
“It had the record for being the most expensive lawn mowing run in Perth for years,” he says.
He then packed up his young family – all of whom now work in the VIP enterprise – and moved to New Zealand.
“I flew into New Zealand and saw a cow in a paddock and ‘a light went on’. I decided then that I needed to get back into primary industry,” he says.
VIP Petffoods now exports $40 million in product a year to Japan alone and has vast contracts throughout Europe and key markets in the US. At home in Australia, only the dominant MasterFoods has more marketshare.
“I cannot see past the simple way of doing things. When I have a board meeting, they know not to talk about history, what happened a month or two ago. I’m only interested in what’s ahead,” he says.
“There are moments of tears and of joy for anyone who has gone down this path. If it gets too complex, I always think about the ‘Lawn Ranger’.”
It’s the same practical approach which resulted in VIP acquiring its competitor Bush’s International for $75 million in 2009.
“Bush’s came to us four years ago and wanted to buy us out; they were quite obnoxious and said ‘here you go’ and gave us a dirty, great big cheque. I said ‘no thanks’ and soon after they were targeted by private equity which came into the marketplace with no idea what they were doing. It was then that we made the snap decision to acquire it,” explains Quinn.
“We were the logical purchasers to buy it – 45 per cent of Bush’s (product) is export so, while that wasn’t a key driver, it’s an interesting dimension for us. What we want to do with their dry dog food is to inject fresh meat. We want to be known as the people who put fresh meat into dry dog food.”
Quinn says the business was losing $22 million a year when it was acquired and his team set about a drastic turnaround strategy, which required all family members to be on deck.
“I was quite worried when it was losing $400,000 a week, but within four months it was breaking even. That’s hard work. We did a deal with our Japanese customers to pay in seven-day terms and that helped,” he says.
“There was unbelievable waste in the company. There were eight accountants and 12 sales people. I thought, ‘how can so many people get it so wrong for so long?’ Now there’s one accountant and four sales people.”
Eldest Quinn sibling Kent, 32, was instrumental in bringing the Bush’s business back from the brink of collapse with assistance from his brother – 29-year-old Klark.
“For us kids it has been a massive learning curve,” says Klark.
“We were big in the chilled petfoods space, but then had to quickly learn about dry food after the Bush’s acquisition. Kent and I handled a lot of it and we not only fixed that business, but improved the product. People used to say it was ‘shit in a can’ and I would have agreed with them back then, but we turned it around by improving the quality of the ingredients.
“At work dad doesn’t stop so we don’t get to take a breath. It can be hard to keep up with the size of the growth with VIP. We have double digit growth year-on-year and in manufacturing you need to be thinking at least three years ahead. There are also global pressures. I travelled the world last year and the amount of respect and knowledge that people in Europe and the US have for the brand is mind-blowing.”
VIP Petfoods is a family affair. Eldest daughter Kelda, 35, manages HR in the Sydney plant, which manufactures 350 tonne per day; Kent will soon move to the Gold Coast from Sydney as assistant GM to Rex DeVantier; Kristen (30) manages the chilled factory on the Gold Coast; and Klark is a project manager who has followed his father into the exhilarating world of motorsport.
“We’re massively different, each and everyone one of us. If you had a line up at the cop shop, you wouldn’t pick us as siblings,” says Klark, who races with his father in the Australian GT Championship in an Aston Martin DBRS9.
“Mum (Christine) is the rock and I don’t think dad would be the man he is today without her. The amount of support she has shown is amazing.”
Christine Quinn believes the family’s success lies in its simplicity to work harmoniously and the fact that there is no separation between work and family life.
“We love what we do so there’s no separation; we don’t leave the business when we go home,” she says.
“I have always had complete faith in Tony. It has been an exciting journey – there’s never a dull moment.
"When we first started I worked in sales, administration, everything. I slowly moved out of it as we grew and now look after all of Tony’s appointments and try to bring some organisation in to his life.”
For Quinn senior it’s a back-to-basics business model which his family have not only grasped but also helped mould.
“I don’t know what I’ve passed on, it has not been deliberate. They’re just good, hard working people who can survive,” he says.
When it comes to succession planning, Quinn has his own ideas.
“I don’t have a succession plan, I have a success plan,” he says.
“It wouldn’t be my decision to sell, it’s the family’s. I’m very fortunate that each and every one of my four children and wife would all be successful no matter what they did.”
Klark says the pedal is always on the accelerator, but he is anticipating the day his father takes his foot off the gas, just a little. While its chief competitor is MasterFoods, supermarket giant ‘own brands’ are also angling for a slice of the lucrative market. VIP manufactures around 30 per cent of the supermarkets’ own product.
“We have about 30 per cent of the market, but we want a larger slice,” says Tony Quinn.
Earlier this year the business was rocked by allegations that its use of the preservative sulphur dioxide (SO2) was excessive, causing the breakdown of Vitamin B (thiamine) levels in food – essential to animal health.
A newspaper report last month showed high sulphur dioxide levels in its VIP Pet Foods Supreme Steak Mince for dogs and Paws Fresh Roo Mince for dogs and cats. Scientists have warned that thiamine deficiency can cause neurological breakdown in cats and dogs and VIP was forced to move quickly to improve its products.
“We took our eye off the ball with SO2 and had to make sure that our products only use the freshest ingredients," says Quinn.
"We are working with new cooking technology that we have designed to minimise processing and to make sure we are continually improving our products.”
While VIP Petfoods will no doubt be left in the capable care of its family, Quinn has that new venture to consider – manufacturing confectionary goods.
“I’m looking at pursuing opportunities in the confectionary world and going up against Nestle and Mars,” he says.
While details are scant, Quinn hints it could ean a return to primary industry in the land of the white cloud, New Zealand. If that occurs, he will have gone full circle. He may even spot another cow while approaching the runway. If that happens, you can bet he’s on a winner.