February 11, 2020
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Release the hounds

Release the hounds

California supplier of CBD-based supplements for dogs turns to an on-demand warehousing provider to boost service to customers nationwide.

By Ben Ames

Most Americans see the Fourth of July as a chance to enjoy a barbecue and watch fireworks. Pet owners, however, know there's a dark side to the holiday, as the noise from exploding fireworks can be terrifying for dogs, turning them into barking, incontinent messes.

One Berkeley, California-based startup says it has found a solution in legalized marijuana. In 2016, the company, Holistic Hound, launched a line of supplements and chews containing ingredients such as cannabidiol (CBD) and cannabigerol (CBG), as well as other natural remedies such as hemp and mushrooms. Although the treatment might sound unorthodox, early results indicate that "high" dogs cope better with loud noise as well as chronic pain, according to the company, online pet forums, and even a trial of a similar product by this reporter on his own dog.

As word got out, sales soared. By late 2018, the small firm was supplying CBD products to more than 1,800 wholesalers and pet stores nationwide. But as is often the case, the growth was putting a strain on the firm's back-end operations. Company leaders began to worry that rising volumes would overtax the capabilities of the startup's seven-person staff. They were also growing increasingly concerned about the company's ability to meet clients' service expectations. At the time, Holistic Hound was serving the entire country from a single warehouse in California. Shipments to East Coast customers were taking four to five business days—far longer than the one- to two-day transit times offered by competitors using local DCs.

It was clear the company needed help with fulfillment. So in December 2018, the firm contracted with Atlanta-based Ware2Go, a division of UPS Inc. that provides on-demand warehousing and third-party logistics (3PL) services, Holistic Hound co-Founder and CFO Duncan Schmidt said in an email.

By March 2019, Ware2Go had replaced the single California warehouse with facilities in Utah and Pennsylvania, and positioned inventory near both coasts, keeping stock as close to end-customers as possible. Ware2Go now manages all business-to-business (B2B) pick, pack, and shipping services on Holistic Hound's behalf.

FASTER SERVICE, LOWER COSTS

As for how it's all working out, company leaders say they're pleased with the results. According to Schmidt, the new approach has enabled Holistic Hound to provide one- to two-day service to more than 70% of its customers—up from just 30%. At the same time, it has produced a 30% reduction in shipping expenses—primarily by cutting the distance shipments travel. Those savings have offset the cost of adding a second warehouse to Holistic Hound's network and also kept it from having to hire additional fulfillment employees, he said.

Instead, the firm has invested in its manufacturing operations, driving growth through new partners and sales channels, and expanding its product line, Schmidt said. Holistic Hound is planning to roll out new products in 2020 and is also looking at opening a third fulfillment center this year to expand two-day delivery service to 99% of its customer base.

So as you celebrate the Fourth of July this summer, take a moment to notice if your four-legged neighbors seem quieter than usual. If so, you may have Holistic Hound—and the speedy service provided by its fulfillment partner, Ware2Go—to thank.

About the Author

Ben Ames
Senior Editor
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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