BLUE products are sold in specialty channels, including national pet superstore
chains, regional pet store chains, neighborhood pet stores, farm and feed stores,
eCommerce retailers, military outlets, hardware stores, and veterinary clinics
and hospitals. Our sales in the veterinary channel are currently minimal.
We sell our products directly to retailers in the specialty channels and through
distributors that focus on the specialty channels. Management believes specialty
channels accounted for 47% of U.S. pet food sales, with FDM channels accounting
for the other 53%. Specialty channels include a diverse set of retailers with
over 20,000 stores (which includes national pet superstore chains (i.e., PetSmart
and Petco), regional pet store chains (e.g., Pet Supplies Plus, Pet Supermarket,
Petsense and Pet Valu), neighborhood pet stores, farm and feed stores (e.g.,
Tractor Supply Company and Mid-States), eCommerce retailers (e.g., Amazon, Chewy
and Petflow, as well as websites of major specialty retailers), military outlets
and hardware stores) and 25,000 veterinary clinics. We have chosen to sell BLUE
in the specialty channels as we believe these channels provide a better environment
for us to interact with and educate pet parents, help position BLUE as a premium
brand and dedicate more shelf space to pet food, which grants consumers access
to a broader range of our products. Pet food sales in specialty channels have
grown faster than pet food sales in the FDM channel for the past 20 years as
a result of the expansion of the channel and its pet focused environment and
superior product selection.
