ARLINGTON — Here’s one way to launch a multi-million dollar business — pay attention to what your dog is chewing.
In 2003, Suman Shrestha, who was living in Bellingham, met Nishes Shrestha (no relation) and noticed Nishes’ dog, Kaos, was happily gnawing on a piece of dried yak cheese, a traditional snack eaten in Nepal.
Easy to digest, the hard cheese, known as churpi, is a good source of protein.
It was an “a-ha!” moment for the two friends.
Both had grown up in Nepal, where they enjoyed eating churpi, but had never considered feeding it to dogs.
Could a yak-and-cow cheese product become an alternative to the bone, rubber and rawhide chews that dominated the dog treat market?
There was only one way to find out.
With $3,000 in startup funds, the two 20-somethings launched Himalayan Dog Chew 20 years ago at their kitchen table.
There were plenty of hurdles, Suman Shrestha said.
Getting rid of the lactose and fat in the cheese, which can upset a dog’s stomach, was one.
It took four years to come up with the right formula, said Suman Shrestha, who has a background in chemistry.
By 2007, they began test marketing their treat, setting up “shop” at off-leash dog parks and farmers markets in the Bellingham area.
In each case, 100 pounds of their dog chews “sold out in less than two hours,” Suman Shrestha said.
A year later they incorporated, moved the business to Lake Stevens and then Mukilteo, and added a third partner.
With help from their parents in Nepal, they established a supply chain to purchase yak and cow milk from small farmers throughout the Himalayas.
By 2014, their company had annual revenue of $6 million.
Today, Himalayan Pet Supply operates one of the nation’s largest Himalayan dog chew factories — and it’s located in Snohomish County. Since 2008, they’ve sold 35 million of the hard cheese chews, Shrestha said.
Twice the size of a football field, the Arlington factory produces more than 20,000 pounds of dog chews a day, said Nate Kredich, the company’s new president.
And here’s a tidbit — back in 2015, the three partners appeared on the TV series, Shark Tank.
Seeking celebrity backers, they asked the Sharks for $750,000 for a 5% stake in the company.
The Sharks countered, asking for 15% equity, but the trio turned them down.
Should the Sharks have offered better terms?
The company’s dog treats are now sold at more than 5,000 retailers, including Petco, PetSmart and Amazon.
Himalayan Pet Supply helped establish a $90 million cheese chew market that continues to expand, according to the company.
In 2021, Kinderhook, a private investment firm based in New York, acquired Himalayan Pet Supply. The terms of the deal were not disclosed.
Zero waste and a social mission
Dozens of competitors have entered the ring since the company pioneered the hard cheese chew market in 2008.
Himalayan’s products account for the majority of hard cheese chews sold in the United States, the company said.
That’s a big chunk of the cheese.
Americans spend about $1,500 a year on their dogs, according to Forbes Advisor. Now multiply that by the nation’s 70 million dogs.
For years, Himalayan operated three separate production facilities in Mukilteo.
Last year, it consolidated its operations under one roof and relocated to a 120,000-square-foot factory in Arlington. The move doubled their production capacity, Kredich said.
The Arlington plant employs 160 people in two shifts.
Himalayan produces its dog treats with a zero-waste approach, Kredich said.
A tour of the factory proves his point.
Cracked chews, for example, are ground up into powder and mixed with hot water and reconstituted in large rectangular vats.
Workers take turns stirring the mixture with steel paddles until it reaches the consistency of bread dough. The mixture is then poured into smaller pans and formed into individual dog chews.
Those are stacked on tall steel racks and left to dry for several weeks in a huge drying room. When they’re ready, they’re hand-packed for distribution.
The majority of the dog chews are made in Nepal, with milk provided by thousands of the region’s farmers. There, “they dry the cheese in the sun,” said Suman Shrestha, who now focuses on product development. The rest of the chews are made in Arlington using milk sourced from farmers in Eastern Washington, Kredich said.
The hard cheese chew industry is helping transform Nepal, a small country in the Himalayan mountains that lies between China and India in South Asia.
Nepal exports more than $22 million worth of churpi to “at least 30 cheese dog-chew companies,” according to The Guardian. “By comparison, tea exports are worth $29 million and carpets $81 million,” The Guardian said.
In Nepal, the company’s supply chain vendors help support the Manaram Foundation, a charitable group aiming to improve the lives of girls and women and boost access to education for all. Vendors donate one textbook to the foundation for every pound of cheese it purchases from farmers.
To be a supplier, “we require farmers to provide access to education for their daughters,” said Suman Shrestha, who sits on the foundation’s board.
His mother never had the opportunity to attend school and his father quit school while still a young teenager.
So far, the foundation has built 135 libraries in Nepal and donated more than 200,000 books, Suman Shrestha said proudly.