Shop Talk: Alaska Mill and Feed evolves to compete with online retailers

This is an installment of Shop Talk, an occasional series of interviews with business owners in Alaska, focusing on the state economy and how it is affecting them.

At Alaska Mill Feed & Garden Center, a well-known pet supply and gardening store in Anchorage, you can find horse feed, ice melt, an array of seeds, pet accessories and mineral blocks for goats to lick, among other things.

The business is easily identifiable, in a cluster of red, barn-like buildings in an industrial area on East First Avenue near Ship Creek. It has a retail side — also known as Alaska Mill and Feed — and a manufacturing and wholesale side, called Alaska Garden & Pet Supply.

Last year, the company announced its transition from family ownership to an employee stock ownership plan, a type of retirement plan for its roughly 65 employees. President Joel Klessens and Vice President Kimberly McCourtney talked to the Anchorage Daily News about competing with online retailers, Alaska's recession and more.

We're in a downturn right now. I'm curious what have you noticed the last couple of years in your business.

Klessens: I think it's had a slight impact on our overall business. … The retail store, we offer a very diverse set of products. That has minimized that impact. Overall, though, the customer count is down in our retail store, but we think that's probably due to the job losses and people leaving Alaska, the recession, and then probably, you know, the competitive environment in the online arena. … The other side of our business has done quite well.

Have you had to adapt to the economy?

McCourtney: That's the nice thing about being employee-owned and being a small local business — when there is opportunity, we're agile enough that we can shift. …

We're just getting ready to launch home delivery. So we're going to be doing that on a few select (pet food) brands to start out with that we know have a lot of demand in the market, and then we'll grow that selection as that channel grows for us.

So that's really to compete with online?

McCourtney: Yes. … Officially, March 1 is our kickoff date, but we have been testing it over the last couple of weeks.

Do you have a sense, or a measure, of how much people shopping online has affected you over the years?

Klessens: We know it's growing. We know that Amazon is prevalent in this market. … We have to figure out how we're going to compete in this online arena and we've come up with a plan for that, but ultimately we'd like people to come down and shop in our store.

[Alaska Mill Feed in Anchorage is now employee-owned]

Tell me about the employee ownership plan. Why did you decide to do it when you did, and why is it good for the business?

McCourtney: The Donatello family owned the business for over 60 years and really it was about a succession plan. It didn't have anything to do with the state of the economy or what was happening. The family didn't want to sell to an outside group or an investment company. They wanted to keep their heritage local. … So it was really about rewarding our employees and then providing a future for young Alaskans to come up in this company.

Why does it make sense as a business to do that?

McCourtney: From an economic standpoint, our business has always been very stable and it's just another avenue to keep that going.

Looking to the future of Alaska's economy right now, what are your biggest concerns and your thoughts?

Klessens: I think the future's bright. … But I think there are three things that have to happen. One is, the state needs to get their fiscal house in order. Two, we need to have an ongoing, stable oil tax policy. And three, as Alaskans we need to support locally owned businesses.

As Alaskans, we're all in this together, and so we have to support one another.

What about on the manufacturing side of the business — has it seen any changes in the downturn?

Klessens: Pretty steady. People fertilize their yards, people put down ice melt. It's kind of a recession-proof — it's kind of like the pet food business, to some degree, you know. You need to feed your pet.

This interview has been edited and condensed for clarity and brevity.