Pet treat company relocates to Fresno from Midwest

By Bethany Clough - The Fresno Bee

 Thursday, Oct. 18, 2012 | 10:33 PM

Grumbling about California's unfriendly business climate driving companies out of state is a favorite pastime in political and business circles. So when a company moves from the Midwest into California, specifically the Valley, it's worth noting.

KDR, which makes Plato Pet Treats, set up shop here last month, leaving the manufacturing plant it outgrew in Indiana. Now, 15 workers each day in southeast Fresno turn out a truckload of all-natural dog treats ranging from organic chicken flavor to turkey and sweet potato.

Operations manager Aaron Merrell said people have called him crazy for moving to California, and he's heard all the reasons companies leave the state.

Regulations -- not taxes as many people think -- and the cost associated with complying with them are the top reasons companies leave, said Joseph Vranich, an Irvine-based business consultant who helps companies decide where to move or expand, whether it's inside or outside of California.

Last year his firm tracked 254 companies leaving California for various reasons -- although the actual number is probably higher, he said.

Merrell has heard all those reasons, but said he moved to Fresno because it's a good fit for his company.

"Fresno is a very good place to do business," he said.

Availability of workers, proximity to suppliers and family ties to the Fresno area all played a role in the decision to move to California.

KDR, a spin-off of Fresno-based Protein Inc., makes healthy dog treats -- some are grain free, some are organic -- from meat produced in the U.S. The treats are sold at Whitie's Pets on Blackstone Avenue and Doghouse Pet Health Supplies at Palm and Bullard avenues, along with other retailers nationwide and in several other countries.

KDR got its start making pig-ear treats for dogs six years ago. The company located in Indiana to be close to pork suppliers.

Merrell, who grew up in Coarsegold and has a master's in business administration from Fresno State, didn't want to move and ran the plant from afar with frequent trips to Indiana.

After switching to jerky and meat-stick dog treats, KDR outgrew its Indiana space. Merrell couldn't find an acceptable building there to move into.

In Fresno, he found a former cotton warehouse on Maple Avenue just south of Jensen Avenue -- three times the space for $1,000 more a month, he said.

The move also saved money by putting KDR closer to meat suppliers. It no longer has to pay to ship frozen organic chicken from Fresno to Indiana, for example.

Being located in a manufacturing area -- in an agricultural hotbed -- has benefits, too. Instead of buying vitamins to put in the dog treats from three different businesses, like the company did when located in Indiana, it gets all three products from one Madera company.

KDR also switched to several local suppliers. It now gets turkey and duck meat from Sanger-based Pitman Family Farms, while its chicken comes from Valley-based Foster Farms and Zacky Farms.

It's also easier and cheaper to get packaging supplies like cardboard boxes here, Merrell said.

"There's so much more available to us here in Fresno, it's amazing," he said.

The company exports the dog treats to Korea, and shipping from Fresno to ports on the coast is much cheaper and faster than shipping from Indiana.

For food processors, a move to the San Joaquin Valley makes sense, Vranich said.

"Everything they need is right there," he said.

The central San Joaquin Valley is increasingly getting the attention of food processors who are considering moving or expanding, said Lee Ann Eager, president and CEO of Fresno County Economic Development Corporation. Three or four are in the final stages of their decision, she said.

Read more here: http://www.fresnobee.com/2012/10/18/3034654/pet-treats-company-calls-fresno.html#storylink=cpy