Flying high on bird food - Kaytee Products Inc.; small animal food

Nation's Business, Sept, 1993 by Sharon Nelton

When William D. Engler Jr. and his wife, Gail, returned home to rural Chilton, Wis. from the White House ceremony in May that recognized him as the Small Business Person of the Year, they were in for a surprise. In their absence, the employees at Engler's company, Kaytee Products Inc., had organized a welcome-home parade--complete with fire trucks and the high-school band.

"It was really a wonderful opportunity for the employees, who have worked so long and hard to help grow this company, to celebrate their success," says Engler's sister, Virginia Duncan, Kaytee's vice president of public relations.

Kaytee produces food for small animals, such as hamsters, gerbils, guinea pigs, rabbits, and even rats and mice. But it is best known for its food for wild and pet birds.

"Our company mission is to provide quality foods and services for America's enjoyment of birds," says Engler.

A family-owned company, Kaytee started out as a feed mill in 1866. Bill Engler, 56, the fourth-generation chief executive, shares ownership with Duncan and their brother, Michael Engler, who is vice president of purchasing. Their father, Bill Sr., 81, who winters in Florida, still spends time at the company every day when he's in Wisconsin.

In naming Bill Jr. as the top smallbusiness person in the country, the U.S. Small Business Administration cited Kaytee's growth since Engler took over leadership in 1984, when the company had about 60 employees and $10.6 million in annual sales. Today it has more than 350 employees, and Engler says sales for the fiscal year that ended June 30 were up 30 percent over 1992's $70 million.

Kaytee established a West Coast presence in 1991 when it acquired United Pacific Mills, a Southern California manufacturer of foods for wild birds and small pets. But what perhaps stirs the most excitement is a cutting-edge avian research center occupying 8,000 square feet of a Wisconsin headquarters buffeting. Engler says destruction of the world's rain forests is eliminating the natural habitats of exotic birds. The center is devoted to preserving exotic species and encouraging domestic breeding through the study of avian nutrition and management. Most of the center's 1,300 to 1,500 inhabitants are on the list of threatened or endangered species.

This is clearly a business with a heart. After Hurricane Andrew hit South Florida last year, Kaytee and its employees sent food, water, and 40,000 pounds of bird food to the area. Kaytee also sent staff veterinarian Blake Hawley, who took medical supplies and spent a week going from aviary to aviary to treat injured birds and setting up distribution points for people to get food and water.

"It was a very powerful experience," says Hawley. The company showed a "total disregard for profit or anything that had to do with the business," he says. "It was total concern with those animals and people."

Bill Engler Jr., who gave up a successful law practice to head Kaytee, says he's carrying on his father's vision. The company had gotten into pigeon food at the request of breeders in the 1930s. Bill Sr., who joined Kaytee after World War II, saw the potential in food for other birds.

Asked to describe his greatest contribution to Kaytee, Bill Jr. hesitates. "When you ask a question like that, you're asking me to talk about myself, and that's always difficult," he says. "We try to think in terms of 'we' rather than 'me.'" When pressed, however, he says his function is to create a vision for the company and to establish and reinforce the company's culture. At Kaytee, he says, 'we try to be sensitive to individuals for what they are and treat them in a respectful way."

It's too early to say exactly what's next for Kaytee, Engler says. Just this summer, company leaders and advisers launched a process designed to produce a plan for the next three to five years, now that the goals of an earlier plan have been achieved. Lower-level employees and plant employees are also involved because, says Engler, "a lot of times they see things that we don't see."

Engler doesn't rule out the possibility of expanding into foreign markets. "In a category that has the potential volumes that ours does, if you're not an international player, you're going to have a hard time staying around," he says.

However, by Engler's calculations, there is still tremendous opportunity on the domestic front. While one study shows that more than 50 percent of Americans would like to have a pet bird, he says, only 6 percent of households actually do.

He's also eyeing those ever-aging baby boomers: "Seventy percent of the people who buy wild-bird food are over 40." Filling that baby-boomer bulge with bird food should keep Engler and Kaytee Products busy for a long time to come.