Minnesota-based pet food company Tuffy's expands with purchase of Chaska business

Tuffy's Treat Co. continues to grow, announcing that it is buying a Chaska-based pet treat business.

Tuffy's was already an investor in Finley's Barkery. Terms of the deal were not disclosed

Finley's Barkery, with a mission to employ people with disabilities as in-store ambassadors, began in a classroom in 2010 and has grown rapidly in recent years.

"We are deeply humbled that what began as a dream to help those with disabilities will now be part of a company that shares our passion for pets and people. We couldn't ask for a better fit," Finley's co-founder Angie Gallus said in a statement.

Tuffy's, part of Perham, Minn.-based KLN Family Brands, already manufactured products for Finley's.

"We felt there was an opportunity to help them scale up," said Charlie Nelson, chief executive of KLN Family Brands, in an interview. "They're doing some wonderful things, and we have distribution, relationships and manufacturing."

Gallus and her husband, Kyle, have joined KLN and will continue to build the Finley's brand. The company's product lines, as well as its mission, will remain intact.

Pet food and treats was a $50 billion business in the U.S. last year, according to the American Pet Products Association. The increase in the number of pets during the pandemic, as well as the "humanization" of pet food, has driven growth in premium brands like Finley's especially.

"The way we're treating our furry family members says it all," Nelson said. "Just about every trend speaks to it being strong for years to come."

Pet food, including the flagship NutriSource brand as well as private-label manufacturing, accounts for 70% of KLN's business. Confections, including the fast-growing Wiley Wallaby licorice, make up the other 30%.

KLN has about 900 employees, 700 of them in Perham and the rest in Delano, Minn., where Tuffy's opened a $65 million pet treat and canned pet food plant in 2020. At that time, Tuffy's was making 150,000 tons of dog food a year. Both Finley's and Tuffy's business model includes direct sales to retailers such as Chuck & Don's.

Nelson said he expects steady growth in pet food and treats over the next decade.