Nufnuf - Honest Products For Pets
100 000 € (100%)
of 100 000 - 250 000 € goal funded
200 € minimum investment
Nufnuf was established in 2015 and has been offering a range of award winning superior pet products at affordable prices. Today, our products are now sold in over fifteen countries and unlike most low cost products, they are made fully of or largely of natural and high-perfomaning materials. This choice of materials means the products are allergy-free and durable making them completely safe and harmless to pets. They totally reflect our company’s core belief of providing a range of pet products with the best possible material and design at affordable prices when compared in the market.
Revenue generation is with B2B clients - retail stores, wholesalers and online e-commerce. Our company's rapid revenue growth and growing international demand for our products now mandates the raising of growth capital to fund the international expansion and meet the rapidly rising product demand. With revenue growth of 180% from 2017 to 2018 and positive earnings, Nufnuf presents a very attractive and compelling investment opportunity into a company in growing and solid industry.
Nufnuf products are 100% designed and tested in Estonia at our Ülemiste City production and storage facility where we also create prototypes and small volume production runs. Large bulk orders are produced by our validated subcontractors in Estonia, Latvia and some in the far East.
Our award winning design team consists of four members and we recently joined forces with Italian product designer Ezio Pescatori , Estonian vet nutrition specialist Dr.Kenno Ruul and we use internationally recognised Estonian photographer Olga Makina for our marketing materials. Of course, we use dozens of friendly cats and dogs test and approve all our prototypes!
Nufnuf has a boutique retail store in Tallinn, Estonia and a shop-in-shop in Helsinki, Finland where we stock and display our full range of products where you can see the design and quality for yourself.
We create products and a brand image that is more compelling and desireable to the customer than most competing branded products. This claim is supported by an ever-growing list of awards, media mentions by leading magazines and newspapers in the industry.
Our social media impact and sentiment is excellent, with over 90% of social media followers having positively endorsed our products. This figure is way above industry sentiment averages and we confident that our strong social media support will be fundamental to our future success in new markets that we will be entering in 2019
Problem & Solution
Growth in the middle class is driving growth in disposable income spent on pets. In many households pets are treated as family. This is supporting demand for well-made items – leashes, beds, collars, and food. The problem is that the market is saturated with cheap poorly made merchandise and exorbitantly priced luxury items. Nufnuf provides a solution by providing high quality merchandise at a moderate price. Product options in this part of the market are limited. Nufnuf provides durable products with a focus on sustainability, a focus that is increasingly expected by consumers. From toys, to beds and food NufNuf’s product options meet the customers’ demand for quality at a reasonable price. For example, dry cat food does not meet the nutritional needs of cats. To provide consumers a better option Nufnuf has designed cold pressed, raw snacks that nutritionally mirror food sources or prey found in nature.
Nufnuf’s 2019-2020 collection incorporates a detailed product makeover refreshing the entire line. Maintaining a focus on delivering value, our new products will remain 40% to 90% less expensive than comparable competitor products.
All products are now designed and grouped into product families according to lifestyle and functionality. Excluding snacks (which are 100% natural), the products are made from at least 70% natural materials. The product families are segregated as follows:
1. For Active Dogs and People (durable products for outdoor, travelling, agility, sports)
2. For Contemporary Home (sophisticated Nordic design-based products for modern homes)
3.1. Toys for Small Dogs
ˇ 3.2. Toys for Medium and Large Dogs
3.3. Extra Durable Toys
3.4. Toys for Cats
3.5. For Mind and Fun (toys to keep pets' mind’s active)
4. Ultimate Raw Snacks by Nufnuf
Active Dogs and People: Our target client is between 25 to 45 years old, lives in an urban area and exercises regularly with his/her dog accompanying him. This client group needs durable, water-proof and well-designed products suitable for active outdoor activities shared with their dog.
Contemporary Home: Our target client for this line is 25 to 65 years old and lives in either an urban or rural area. These clients appreciate well-balanced interior design that is inclusive of both traditional and modern solutions that contain a strong emphasis on functionality and contemporary design. Nufnuf targets clients who appreciate the minimalistic Nordic design language. Our products for pets represent an attractive additional piece of interior design rather than just a plain product for a pet.
Toys: Our target client is a pet owner who appreciates an emphasis on natural, durable toys that will withstand rough treatment. Demand for developmental toys is increasing as pet owners appreciate the importance of strengthening and maintaining mental vitality in pets while decreasing the odds of unhealthy hyperactive behaviors.
Ultimate Raw Snacks: Our target client is both diverse in age and background. These clients feed raw food to their pets to maximize their overall health. A growing list of studies indicates that over consumption of dry food causes health problems for both cats and dogs. Accelerating demand for raw food products is a notable industry trend. The humanization of pets is also a key trend driving the pet food market. Many pet owners are looking for pet food that reflects their own taste. As a result, there has been an increase demand for premium products - with ‘natural’, ‘raw’ and ‘organic’ food on the rise.
Nufnuf products are 100% designed and tested in Estonia at our Ülemiste City facility. The facility is suitable for prototyping and small series production. We employ two highly skilled artisans and have considerable in-house expertise working with leather products. Our leather product development also incorporates the expertise of two partners - Hansa Leather in Keila (Estonia) and Triera (Latvia).
Our production materials are primarily sourced outside of Estonia. Our high quality bedding fabric, bonded faux linen, is produced and dyed in China to our exact requirements at an attractive wholesale price point. Felt, our second most common material, is also sourced from China. Our naturally tanned grain leather collars and leashes are produced in Lithuania. Suede leather for our natural toys comes from top suppliers in India. Multiple suppliers in Europe and Estonia fulfill our remaining production needs to our exact requirements.
Nufnuf has three certified subcontractors - one in Estonia, India and China - that manage bulk production. Management visits these locations regularly to ensure that Nufnuf's partners are trained and tested at the highest levels and to verify that working conditions standards and quality requirements are honored.
We sell primarly our production Business to Business (B2B) to wholesale clients. We also have our own flagship shop in Tallinn Telliskivi area and shop-in-shop in Helsinki’s prestigous Eira area.
The 13 billion euro annual European pet products market is growing almost 20% per year. The volume of leading countries such as Germany, France, Italy and England alone are 9.8 billion euros. Nufnuf’s share of the European market is estimated at around and our goal is to achieve 1% by 2022. Nufnuf's most important market now and in the near future is Germany. Our closest neighbor with higher purchasing power than Estonia is Finland. Finland has a pet products market volume of 181 million euros.
The estimated total volume of the pet products market in the Baltics is 100 million euros, 60 million euros of which is sold via specialized shops. Market leaders have increased their turnover by 30% on average in 2018 compared to average retail sale trade growth of 7%.
In developed countries, a shift from low-quality to premium pet products creates a positive market trend for Nufnuf. Presently, 50% of the pet products market can be classified as low quality with the premium part of the market seeing stronger growth. Nufnuf is ideally situated to capitalize on the trend towards premium products that offer good value.
On-line sales currently represent 5% of total turnover and rank 5th among the most popular goods sold online. Source: The figures above are based on Euromonitor's and Mintel's analyses.
Our main markets where we generate sales turnover are Germany and Norway.
Nufnuf will be expanding into Japan and the United States. These markets are similar to Western Europe, but distribution channel are different. Large retail chains in the US like PetSmart are not Nufnuf's target as they do not stock products that match Nufnuf's values of premium quality and design at an attractive price. Rather, Nufnuf will target specialized chains and independent shops in large cities. Targeting these clients will require Nufnuf to have a local logistics distribution partner to handle warehouse support and deliveries. This system makes customs clearance and transport more efficient.
Traction & Accomplishments
- Consistent year-over-year robust revenue growth
- Products sold in 15 countries
- Nufnuf has in excess of 100 commercial clients
- Tallinn, Estonia flagship retail shop
- Helsinki, Finland shop-in-shop recently launched
- Approximately 5,000 social media followers
- Five uniquely customized product lines
- Animal Health & Wellness Award 2018 (UK)
- Estonian Design Award BRUNO nominee (2017)
- Suggested brand by Europe’s largest pet magazine DOGS 2016 (Germany)
- Positive press coverage in Estonia’s leading papers Aripaev and Eesti Paevaleh
How We’re Different
Nufnuf has multiple competitive advantages. Nufnuf products, unlike most cheaper products, are made of fully or largely of natural materials. This choice of materials means the products are allergy-free making them completely safe and harmless to pets. The company's core beliefs and moto also result in a uniquely valuable product compared to other products on the market.
For example, Nufnuf delivers a premium product at an affordable price. The customer experiences a sense of having received more for his money than would be the case from buying other competing products. Many brands focus on marketing hype to convey the image that selling the best product also often translates into paying a very expensive price. Nufnuf does not follow this conventional approach. Instead, the Nufnuf team is truly devoted to honest hard work in search of the best materials to allow for premium design and maximum functionality catered to a pets' unique anatomy. Part of this search includes going well beyond the borders of Estonia to foreign markets to find the best materials at the best global prices. The mix of local and global production pursuits in the ends helps to guarantee that Nufnuf provides a superior product as a retail price that is reasonable and agreeable to the end consumer.
Nufnuf's success has been validated by the numerous awards we have and continue to receive for the design, functionality and sustainability of our products. We have very positive customer feedback and reviews, across our social media channels, that help maintain a strong sales retention rate. Nufnuf, unlike the vast majority of our competitors, truly delivers a top tier product at a price that is more affordable than similar quality products our competition sales. We do our best to design and produce and honest product at a price that is fair and in reach of most pet owners who value overall brand long lasting quality merchandise.
Uses of Funds & Timeline
Nufnuf is seeking 250,000€ to scale the business in 2019. Approximately half of the capital will be used to maintain sufficient working capital to finance stock orders throughout the year. Nufnuf has allocated capital for salary and taxes to hire two additional sales team members in 1Q 2019. New personnel will be responsible for increasing online sales count as a percent of total revenue and for development and testing of launching franchises in at least three new locations 4Q 2019. Additional funds have been devoted to salary and taxes to employ one new highly skilled employee to serve as the driving force behind new product development and production. The new collection concept should be ready for launch at major pet expos by 2020. The remaining capital will be used to implement a new marketing strategy and expand brand recognition by September 2019.
- Sufficient working capital to finance stock and orders 1H 2019
- Two new sales team members 1Q 2019
- Sales revenue of 400,000 3Q 2019
- Online sales representative of at 15% of total sales 4Q 2019
- Brand shop concept ready and tested 2Q 2019
- Three new franchising contracts for branded shops 4Q 2019
- New collection concept is ready to launch 1Q 2020
- New marketing strategy fully implemented by 3Q 2019
Use of funds of minimum capital raised (100 000 EUR):
- working capital
- 1 additional sales team member
- impelementation of 1/3 of new marketing strategy compared if we raise 250 000 EUR
Obligations to Investors, Profit Distribution
Nufnuf will provide detailed quarterly and annual investor reports. In addition, the company will inform investors of any significant developments that occur over the course of normal daily operations. Nufnuf will also strive to answer questions posed by investors in a timely manner.
Nufnuf will distribute up to 30% of net profit beginning in 2021.
OTHER SHAREHOLDER REWARDS
- All investors who have invested 400,00 €, will receive a 20% discount on Nufnuf
products for a one-time purchase.
- All investors who have invested at least 1000,00 €, will receive a 25% discount on Nufnuf products for as long as the investors remain a shareholder.
- All investors who have invested at least 5000,00 €, will receive a 30% discount on Nufnuf products for as long as the investors remain a shareholder.
We believe there is opportunity to position the firm for sale in 3 to 5 years. The most likely exit scenario would be for all or a portion of Nufnuf to be acquired by a large multi-national firm, venture capital firm or a private equity firm.
Risks and Mitigation
A decline in consumer spending or change in consumer preferences could reduce our sales or profitability and harm our business.
Our sales depend on consumer spending, which is influenced by factors beyond our control, including general economic conditions, the availability of discretionary income and credit, and consumer confidence. We may experience declines in sales or changes in the types of products sold during economic downturns. Any material decline in the amount of consumer spending could reduce our sales, and a decrease in the sales of higher-margin products could reduce profitability and, in each case, harm our business.
Nufnuf will address these broad macroeconomic risks by identifying and responding to evolving trends in demographics and consumer preferences, and thereby cultivate a growing and loyal customer base.
The disruption of the relationship with or the loss of any of our key vendors or risks associated with the suppliers from whom products are sourced, could harm our business.
We purchase a substantial amount of pet supplies from a number of vendors with limited supply capabilities, and a few of our largest vendors account for a material amount of products sold. We can make no assurances that we will be able to find new qualified vendors who meet our standards, or that our current pet supply vendors will be able to accommodate our anticipated needs. In addition, we purchase a substantial amount of pet supplies from vendors outside of the EU. Effective global sourcing of many of the products we sell is an important factor in our financial performance. We can make no assurances that our international vendors will be able to satisfy our requirements.
Nufnuf believes it has strong relationships with its vendors and has personally visited and inspected production facilities to help guarantee a productive supplier relationship is maintained. Further, Nufnuf's production occurring outside of the EU takes place in countries considered to be politically, economically, and financially mature.
The pet products and services retail industry is very competitive and continued competitive forces may adversely impact our business and financial results.
The pet products and services retail industry is very competitive. We compete with supermarkets, warehouse clubs, and other mass and general retail merchandisers, many of which are larger and have significantly greater resources than we have. We also compete with a number of specialty pet supply stores and independent pet stores, veterinarians, catalog retailers, and e-commerce retailers.
Nufnuf has been able to compete successfully by differentiating ourselves from our competitors through providing a careful combination of product assortment, competitive pricing, service offerings, and unique customer experience.