December Chairman's Report
-- The Way Forward in 2014 --
Everyone who has ever produced a litter of puppies knows this time of year brings holiday cards from puppy buyers with heartwarming photos and most-welcome news about the progress and antics of those puppies during the year. The cards are both informative and inspiring as the breeder considers their accomplishments and what they hope to achieve in the year to come.
With that as my guidance, I will first share some news about this year. As I mentioned in my November report, this has been a year of relentless positive action. The dozens of initiatives and innovations outlined in that report, along with a number of others throughout the year, have yielded growth in several areas. Assuming December achieves budgeted levels, we expect to have stronger revenue than 2012 – reaching $58 million this year. Staff managed expenses extremely well which should yield an operating profit also stronger than 2012 and should be approximately $7 million for 2013. Our balance sheet has also strengthened due to good investment performance and prudent protection of cash flow.
The American Kennel Club has grown in participation by clubs and exhibitors during 2013.
46 new clubs chose to join with the AKC bringing the total to 5,090 licensed and member clubs.
Those 5,090 clubs created 341 new events for a total of 22,750 events this year – the largest number in the history of the AKC.
Exhibitors participated more than ever, bringing 25,323 new entries through October for a projected total of about 3.2 million this year – the largest number in the history of the AKC.
Breed recognition continues to grow with fully recognized breeds and varieties up by three for a total of 190 and FSS added one for a total of 64.
However, as good as our overall performance has been this year we do have several significant areas of concern.
Participation in Conformation, Obedience and Rally declined in the past year. As I stated in my November report, the issues impacting our sport today have been clearly identified and discussed. They can be collected into three categories – societal, economic, and legislative. While the apparent reasons are simple to discover, the solutions are significantly more complex. It will take very sophisticated marketing to achieve our goal of bringing more participants to our events and more members to our clubs. We are not only up for addressing it - we are capable of delivering it.
Our litter and individual dog registrations continue to decline - although at a much reduced rate. Some progress is being made, but we still have much work to do.
We have initiated some programs to help breeders and we have several in development. The AKC Breeder of Merit program now has more than 10,000 participants. These are breeders who are members in AKC clubs, participate in AKC events, adhere to the health test guidelines of their parent clubs, and register their litters with AKC. This program has contributed significantly to helping slow the decline of litter registrations. We are currently evaluating programs that will impact the other 80% of breeders who register litters with AKC, but do not qualify for the Breeder of Merit program. In addition, we added Breeder of the Year recognition for 12 sports this year – a clear demonstration of the importance of breeders.
An important aspect of litter registration is expanding the base of educated breeders. Today marks the inaugural AKC Breeder-to-Breeder Seminar – an opportunity to learn from the experts as they share the thinking behind their successful breeding programs. The workshops are live today and will be available on AKC.org in the near future.
In addition to mentors, the most valuable resource a breeder can have is a veterinarian with an expertise in reproduction. We have formed a strategic alliance with the Theriogenology Foundation and the Society for Theriogenology to help ensure future repro vets for breeders by funding the first ever residencies in small animal reproduction in the United States. We currently have proposals from Auburn University, the University of California-Davis, and the Veterinary Hospital at the University of Pennsylvania for residencies beginning with the 2014 academic year.
Helping breeders find homes for their puppies and buyers find puppies for their homes is the goal of the newly expanded effort behind the complete redesign of the AKC online breeder classifieds making this resource the go-to place for prospective puppy buyers. We will be launching the new site, complete with a new name and a strong marketing program, later in 2014.
Making individual dog registration more desirable to the general public is a primary focus. We know that communicating AKC's Good Works increases the likelihood of registration by about 4%. We will continue to tell that powerful story as part of the registration process. In addition, we are exploring a new concept that adds value to registration - one which has a direct benefit to the dog and owner beyond participating in events. We will be testing that idea in 2014.
We are reaching out to the 99 million dog owners who have not discovered us yet through a variety of communication opportunities. This year we added a million friends we didn't have before through our efforts on Facebook and our AKC Dog Lovers blog. We are beginning to drive our story through exciting new content, including videos and Woofipedia by AKC – a new website (www.woofipedia.com) aimed squarely at the 99 million. As we persevere for responsible and reasonable dog legislation, our new friends will help protect our rights to own and breed our dogs. We have begun to see that in the number of legislators who have signed up to be Honorary Chairs for AKC Meet the Breeds in New York – up 25 this year to 113.
Our way forward in 2014 demands delivering true customer focus for both our current and potential customers; unleashing greater innovation throughout everything we do; creating relevance and motivation in everything we offer; and continuing and improving on our Good Works. We plan to use every effort to do all that by challenging ourselves every day to do the right thing, not the easy thing, in everything we do.
I am positive we can do that. And as Ellen DeGeneres says, "It makes a big difference when you stay positive."
As always, your comments and suggestions are welcome at email@example.com.
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