New Alaska Canine Cookies emerges from bankruptcy

PHOTO/Lisa Seifert/For the Journal
An Alaska businessman is restarting a manufacturing company, Alaska Canine Cookies Inc., after it faltered and filed for Chapter 7 bankruptcy last year.

Tom Sheffrey bought the Alaska Canine Cookies dog biscuit recipe and business name last October, and in mid-November he began the renewed venture.

A client from his computer-service business told Sheffrey Alaska Canine Cookies was up for sale and encouraged him to buy it. "I heard about it, and I knew it was successful," Sheffrey said.

The Alaska-manufactured pet treats were off the market for six months following the bankruptcy filing last spring, he said. Now the new owner has restocked Alaska retailers with Alaska Canine Cookies and has ramped up production to meet demand for the upcoming visitor season.

"It’s a killer product. Dogs love it," Sheffrey said.

Alaska Canine Cookies, which once distributed its products nationally, started small, then gained increased recognition before hitting financial trouble.

In 1996 Shaun Calhoun started the company, developing the recipe and baking dog treats at her home before moving to an Anchorage facility. The following year the company received the manufacturer of the year award from the Made in Alaska program.

At one point the company employed 28 people and distributed products to all 50 states and six countries, she said. "When I had the business, 90 percent (of our market) was in the Lower 48," Calhoun said. San Francisco and Manhattan were strong markets for Alaska Canine Cookies, she recalled.

A year ago an injury forced Calhoun to take time away from the business, which eventually led her to file for Chapter 7 bankruptcy, she said.

Alaska Canine Cookies filed for bankruptcy in Anchorage on May 3. Calhoun listed personal and corporate assets of around $94,000 and $308,280 in debts and liabilities, according to court documents.

The company defaulted on two loans from its lender, Alaska Growth Capital of Anchorage, eventually owing $197,557 including interest for loans in 1999 and 2000, the documents showed. Top creditors included landlord Hilligas Co., credit-card companies and FedEx.

Calhoun was disappointed the venture failed, despite gaining a contract from a national retailer just before filing bankruptcy.

Now she hopes Alaska Canine Cookies’ new owner Sheffrey will help the company bounce back and prosper.

"I want the company to succeed," she said.

Although it was a bittersweet return to the business, Calhoun has taught Sheffrey some dog-biscuit baking basics.

The company touts its pet treats as all-natural. Main ingredients include whole wheat flour, canola oil, eggs, honey, oat bran, wheat germ and brewer’s yeast.

One batch produces 88 pounds of bone-shaped biscuits, Sheffrey said. Bakers can yield between two and four batches daily, or up to 350 pounds of Alaska Canine Cookies, he said.

Sheffrey has hired three distributors to stock the products at several outlets in Alaska, including animal-food and pet stores, veterinarian’s offices, gift shops, Sam’s Clubs and Williams Express stores.

Sheffrey has discovered Alaskans remember Alaska Canine Cookies, and many retailers are eager to stock the products.

"Product recognition is big," he said.

Selling the product across Alaska is the first step, and while Sheffrey eyes expanding sales beyond the state, he’s willing to wait.

"I would like to go national eventually," he said.

The businessman paid cash to acquire the company, shying away from taking out a loan. Funding for any expansion must come from profits, he believes.

"The business has to pay for itself," Sheffrey said.

Currently, Alaska Canine Cookies employs one full-time worker plus two part-time employees.

Later this spring the company will move from its 900-square-foot location to a 1,600-square-foot site with a garage door to ease the transfer of ingredients and products, he said.

Many of the original products will be the same, and the company will carry the same packaging, he said. However, Alaska Canine Cookies won’t yet offer a former item, treats for cats, Sheffrey said. Felines can be "persnickety," refusing some kinds of food, he said, adding that demand could eventually merit production.

Sheffrey added a new product in December, similar to the top-selling $1.50 Lollipup, a single biscuit dipped in white yogurt frosting. Pet owners typically broke the pet treat in pieces to feed their dogs, he said. The new item offers three small treats for the same price.

The longtime Alaskan, who retired from IBM after 30 years, believes his business experience will allow Alaska Canine Cookies to thrive. Sheffrey started a computer-service business and for five years has operated an Alaska State Fair food booth called Caesar Salad Palace with his son.

The popularity of Alaska Canine Cookies’ pet treats works in Sheffrey’s favor.

"I have no problem knowing the product is successful," he said. "It sells itself."

One concern, though, is the possibility of slow sales resulting from a lackluster visitor season, Sheffrey noted. However, the new manufacturer is confident in his ability.

"I have experience in business," he said. "I don’t see how I could fail."

04/14/2002 - 8:00pm