Durkha for Dogs

Sometimes, an idea for a venture can come from a simple observation. What an entrepreneur needs is the ability to see the potential of the concept and believe in it.

Look up #himalayandogchew on Instagram. You’ll see over 250 photos and videos of dogs with what we Nepalis call durkha or churpi. Described as “yak crack” by several Instragrammers, the durkha is fast becoming a cherished treat for dogs.
Before you go off and feed durkhas to your own dog, know that the dog chews on Instagram differ from the Nepali chews. They are harder and have less fat, says Sujan Kumar Shrestha, co-founder of Himalayan Dog Chew. To figure out the right composition for the chew, it took the company time. In total, Himalayan Dog Chew, incorporated in the United States in 2008, spent about five years trying to improve the chews and assessing the product’s marketability.

“We wanted to make sure the chews were safe, ingredient-wise,” says Sujan. Himalayan Dog Chew sent the products to over five labs for chemical analysis to find out the levels of sodium, magnesium and phosphorus in the chew. “If the dogs chew them [the chews] really fast, they would get an overwhelming dose of phosphorus and calcium. We had to make the chews with the right hardness so that they lasted longer. We had to understand the product before we could sell it in the market.”

Safety and quality continue to be priorities for Himalayan Dog Chew. “We have to put regulations aside, whether they exist or not in Nepal,” Sujan says of his commitment to the priorities. There is also of course benefit to ensuring quality products; it allows customers to trust the company and what it sells. “To gain 100 customers is so hard, but losing all of them is so easy,” he points out.
Thankfully for Himalayan Dog Chew, the company has been gaining customers steadily. In 2007, it had 13 business-to-business customers. In 2010, the number reached 1,000. Now, you can find Himalayan Dog Chew products, which include the chews as well as other treats for dogs, in about 8,000 stores in five countries. “Let’s just say somewhere in the millions,” Sujan hints about the company’s revenue in dollars.

This year alone, the US-based company’s production projection is 600,000 kilos. If the company hits this mark, it will see a 100 percent increase from last year’s production amount. To be able to churn out large quantities of its products, Himalayan Dog Chew has production in three countries. No matter where the products are made, they are finally packaged in the US.

The US isn’t limited to the final packaging though. About half of the dairy for the durkha is actually procured from farms in the States. “Up until the beginning of last year, 100 percent of our supply came from Nepal. Now, for the durkha it’s 60 percent from Nepal and 40 from the US,” Sujan reveals.

The reasons why Himalayan Dog Chew decided to source from the US: demand and expense. There was not enough production in eastern Nepal, where the company used to get its supplies from, and it was actually cheaper to manufacture in the US. However, concerned about the wellbeing of Nepal, the company decided to continue to contribute to its economy.

durkha2In Nepal, the supply chain starts in the rural farms. It then passes through dairies and collection centers and ends in Kathmandu, from where the products are sent abroad for packaging. “We have a mutual understanding with specific farmers,” Sujan says of the relationship with the estimated 5,000 farmers with whom Himalayan Dog Chew collaborates. “We provide the farmers with logistics and management for them to bring the milk to the dairies.”

The logistics and management include training and monitoring. Every six months, Himalayan Dog Chew staffers visit the farmers to observe their adherence to the strict process code laid out by the company and retrains them accordingly. “About 80 percent of the farmers know exactly what we want,” Sujan states. “There’s always that 20 percent that don’t. And then the new ones we have to train. It takes a a lot of resources.”

Resource-intense activities are by no means limited to training and monitoring. Take for example the 50 to 100 people (depending on the season) needed to collectively visit every single farmer. Each individual travels for 25 days in the high mountains of Nepal to collect the dairy products from the farmers and bring them to one of the five collection centers located throughout the country. During this trip, they also give money to the farmers ahead of time, usually for the next three to four months of production and sometimes even for the next year.

Himalayan Dog Chew tries to help the farmers in other ways to carry out their beyond fair trade policy. “I go visit the farmers myself at least every three to four months and try to understand the situation,” Sujan says. “If they are not doing well, we try to provide to them on a personal level.”
This year, Himalayan Dog Chew, in collaboration with Lion’s Club International, equipped farmers and students with solar lamps if they didn’t have electricity at night. For farmers whose children’s education fee is high, the company provides scholarships. “This is why we are beyond fair trade; we take things to the next level,” Sujan explains. There’s a business point to this as well, “If we the customers take care of the vendors, they take care of us,” Sujan reasons.

This focus on taking care of others is an integral part of the company. One of the six stated missions of Himalayan Dog Chew is to give back to the community. “We set aside a budget for charitable donation every year based on revenue projection,” Sujan explains. Deploying the vigilance he uses to manage the company’s operations, Sujan himself visits non-profit organizations and researches them to determine where the company’s financial contribution will go.

Because of their interest in certain issues, the co-founders had plans to give back to the community in the future before Himalayan Dog Chew had even launched. The decision made by Sujan, Nishes Shrestha and Suman Shrestha also makes business sense. Consumers are becoming ever more interested in companies’ impact and choose to buy from businesses that align better with their values. They may see Himalayan Dog Chew’s donations to organizations and projects focused on dogs and on women as a reflection of the company’s commitment to dogs’ health and support of women’s issues, respectively.

The company is now donating more money than its initial capital. “We had exactly $1,937.72,” Sujan recalls, giving the precise amount down to the cents. About a thousand dollars, hardly enough for even one month’s rent and groceries in the US, was expended to procure the products from Nepal. Using the rest of the initial capital in addition to the money made from selling that first batch, Himalayan Dog Chew doubled its purchase.“We never had to take out loans until last year because last year we wanted to purchase our building and new equipment,” Sujan discloses. “We’ve never taken money for operation. It was just careful financial planning.”

Behind this current financial stability and success is a story of failures and lessons learned from them. One such failure is a handicraft store. When a wave of handicrafts stores opened in the US, Sujan joined the movement only to have to close the store three years later. He therefore is wary of repeating the same thing that others are doing. “Think about something new you can do. People will say it won’t work, but if you don’t do it, it never works,” Sujan points out.

That attitude has taken the three Shresthas places many only dream of. Despite their achievements, or perhaps because of it, they haven’t forgotten at all about the stakeholders that got them where they are right now: the dogs. “Every day when we go to bed, we want to make sure that all the dogs who have chewed our products are sleeping well,” Sujan explains. Ever the businessman, he adds, laughing, “…and wake up in the morning to the chews again.”

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