1988: Mud Bay Begins
Mud Bay began in 1988 when Elsa Wulff bought a tiny farm store. The store was housed in an eighty-year-old building on Mud Bay Road, which runs west out of Olympia and spans the bottom end of Mud Bay, one of the southern arms of Puget Sound.
Early on, Mud Bay sold a little of just about everything, from locally grown oysters, pop tarts and folk art to hog feed, fertilizer and hay. The store also lost money. Recognizing that his mother couldn’t afford for the business to fail, Elsa’s son Lars became Mud Bay’s third employee in 1989. Elsa’s youngest daughter, Marisa, returned from Holland, where she had just finished an MBA, and joined the effort in 1993.
Pioneering Natural Pet Care: 1989 - 1999
With a tiny facility surrounded by farms that were giving way to housing developments, we realized that Mud Bay was unlikely to excel at selling fertilizer and farm feed. Instead, we focused our efforts on researching canine and feline nutrition and on searching for healthy, natural foods for dogs and cats and other animals.
It was slow work. The foods and supplies we wanted weren’t carried by local distributors. The healthiest dog biscuits we could find were made by a little company on Long Island, which we shipped across the country. We rented a local bagel bakery on Friday nights and used their oven to bake our own organic dog cookies.
We quickly recognized that giving people accurate information was just as important as providing them with healthy foods. Sifting facts and opinions, we trained staff members and wrote booklets to help Mud Bay’s customers make informed decisions about what to feed their dogs and cats.
Mud Bay’s focus on consumer education and healthy foods for dogs and cats worked. By 1999, Mud Bay had become one of the pioneers of natural pet care, and sales had quadrupled. By letting go of the pop tarts and farm feed, Mud Bay had begun to excel at using natural food and accurate information to contribute to the health of dogs and cats and the happiness of the people who care for them.
Overnight Expansion: 2000 - 2002
In the summer of 2000, the largest pet retailer headquartered in the Pacific Northwest became insolvent. When Mud Bay learned that these stores were about to close, we saw the opportunity to save sixty jobs and eight neighborhood stores—and to take our approach to healthy nutrition for dogs and cats beyond Olympia.
The process of turning the eight failing stores into Mud Bays began with giving staff the kind of education in dog and cat physiology, nutrition and the pet food industry that would enable them to help owners choose the right foods for their animals.
From education, we moved to inventory, phasing out lower quality, less natural products—along with most products for animals other than dogs and cats—to make room for a deeper selection of natural foods and supplies for the two species that had become Mud Bay’s raison d’etre.
Turning around the eight troubled stores took more than two years—and initially resulted in huge losses—but by the end of 2002 Mud Bay was a profitable company of eighty-five people who were contributing to the health of dogs and cats and the happiness of their owners in nine neighborhood stores around Puget Sound.
Store Growth and Improvements to Education and Supply Chain: 2003 - 2012
In 2003, we opened our own distribution center to improve our ability to source directly from the smallest and the best manufacturers we could find. In 2007, we tripled the size of our distribution center to accommodate the hundreds of manufacturers Mud Bay was buying from. Every month, we found new, well-made supplies for dogs and cats—many from tiny cottage industries and many made within the Pacific Northwest.
As we continued to grow, we worked on becoming better at helping people choose healthy foods for their dogs and cats. We hired a veterinarian to help us educate Muddies on the basics of dog and cat physiology, nutrition and behavior. We brought experts in natural pet nutrition to Puget Sound to educate our staff. And we sent Mud Bay staffers around the country to visit pet food manufacturing facilities. And we expanded and formalized the Muddies’ training in dog and cat health so that every Muddy could provide owners with accurate answers and useful solutions.
We also opened new stores, renovated old stores, and made investments in Mud Bay’s systems and processes. We invested in our communities, providing free food to thousands of dogs and cats adopted through Puget Sound animal shelters and donating tens of thousands of dollars to local organizations that contribute to the welfare of animals.
Expansion to Oregon: 2013 – 2014
In 2013, we took our mission south, opening our first stores in Oregon and southeast Washington. A few Washington Muddies moved to Oregon, and a lot of newly hired Oregonians spent days in Mud Bay stores and nights in nearby hotels. After years of Oregon dreams and preparation, our new Beaver State stores operated and felt like our Washington stores, and Oregonians—famous for their preference for local businesses—embraced an import that hailed from north of the Columbia River.
In 2013, we celebrated Mud Bay’s 25th anniversary by closing all of our stores for the day and bringing every Muddy together at a county fairground for a day of learning and fun. Celebrating our anniversary was such a galvanizing experience that we committed to doing it every year. Every year since—with the exception of the Covid years of 2020 and 2021—Muddies get together to connect, celebrate and learn for a long, amazing day we call Mudstock.
Employee Ownership & National Recognition: 2014 - 2015
In 2014, more than sixty Muddies read and discussed Zeynep Ton’s book The Good Jobs Strategy, and a group of twenty Muddies got together to craft a vison of the mission-driven, people-centered, employee-owned company they wanted Mud Bay to become. In 2015, Mud Bay launched an employee stock ownership program that enables every Muddy who works at least twenty hours per week to acquire and grow an ownership stake in Mud Bay.
In 2015, we also launched our Volunteer Award of Excellence, which honors people who volunteer at animal welfare organizations and gives cash awards to volunteers and shelters. In 2017, we launched our first Mudlet—a mini-Mud Bay that benefits an animal welfare organization—in Seattle Humane’s expanded facility. Also in 2015, Mud Bay was named Pet Business Magazine’s “Pet Retailer of the Year.”
Growth, Investment & Change: 2016 - 2019
In the years that followed, Mud Bay continued to invest and grow, and as 2019 drew to a close, Mud Bay approached several significant organizational milestones: our store count had increased to more than fifty, our revenues had grown to almost $100M, and the number of Muddies had reached nearly 500. Mud Bay had become one of the twenty largest pet retailers in the U.S.—and the largest one headquartered in the Pacific Northwest. Furthermore, Mud Bay’s health-focused, education-centric approach to retail had earned the company recognition as one of the pet industry’s thought leaders and change agents. In 2019, Mud Bay’s leaders launched a multi-year effort that would result in 2021 in the birth of IndiePet—the first trade association to represent North America’s 8,000 independent and neighborhood pet retailers.
As the twenty-teens came to a close, it was clear that our vision of an employee-owned company guided by Zeynep Ton’s Good Jobs Strategy was becoming a reality. Our investments in higher staff wages, our expansion of staff education, our launch of a leadership program developed by Mud Bay’s executive team and other Muddies and our annual investment in buying shares for Muddies’ ESOP accounts had helped make Mud Bay a more sustainable place to work and had helped increased Mud Bay’s staff retention rate from 52% in 2014 to 75% in 2019.
Despite our success during the last half of the twenty-teens, it had already become clear to Mud Bay’s leaders that it was past time for Mud Bay to move beyond the business model we had developed in the 1990s. In 2016, we brought together a group of twenty Muddies from different parts of the company to begin inventing a new vision of what Mud Bay could do for dogs, cats and their owners.
In 2018, we began training three Muddies to become internal entrepreneurs with the goal of launching new Mud Bay businesses. In 2019, we launched Mud Bay e-commerce, Mud Room (low stress, skin-and-coat-health-focused dog grooming) and Delivery Plus (home delivery and in-home services for residents of senior housing.)
And then came Covid.
Covid-19 & Business Model Evolution: 2020 - 2021
Like businesses all over the world, Mud Bay was slammed by the Covid-19 pandemic in multiple ways: operationally, strategically, financially, and culturally.
Within a matter of weeks, the basic function of keeping retail stores operating became a huge challenge. Muddies found this work incredibly hard, but Mud Bay came through it better than most of its industry peers by centering its response on three simple objectives: 1) Fulfilling our obligation to dog and cat owners by enabling them to continue feeding their animals; 2) Minimizing community transmission of Covid; 3) Supporting and caring for Muddies.
Although we shortened store hours and closed some stores for short periods of time, we fulfilled our role as an essential business by continuing to feed about half a million Pacific Northwest dogs and cats. Equally important, we were able to support Muddies with a variety of helpful Covid benefits. And, despite millions of customer transactions, we kept community transmission within Mud Bay to zero or almost zero.
Covid-19 forced Mud Bay to adjust its strategic evolution. We had already begun our pivot from brick-and-mortar retail to omnichannel and from retail-only to retail-plus-services, but Covid required us to accelerate some efforts and abandon others. In the spring of 2020, we launched curbside pickup, home delivery and telephone support. During the same period, health regulations forced us to shut down Delivery Plus and the Mud Room.
Despite the challenges of 2020, Mud Bay’s exec team threw itself into the work of completing the strategic definition Mud Bay had begun several years earlier. By the fall of 2021—and with input from a wide variety of Muddies—we had developed and refined our Investment & Growth Strategy for the 2020s, our Customer & Market Strategy for the 2020s, our vision of Mud Bay in 2024 and a set of twenty-three change initiatives to help us bring our vision to life.
As 2021 drew to a close, Muddies had much to celebrate. Despite our financial losses in 2020, our profits in 2021 were strong enough to enable us to share a part of them with Muddies. Our commitment to the Good Jobs Strategy had led to the decision to use MIT’s living wage calculator as the basis for determining payscales. Annual investments in our Employee Stock Ownership Trust had grown employee’s ownership stake to more than 10%. And every Muddy had had a chance to digest and give feedback on an ambitious vision of the Mud Bay Muddies will work together to bring to life by the end of 2024.