Business Trends for Pets and “Petrepreneurs”by Steve O'Keefe on March 16, 2011
We have covered many business trends on this blog that primarily affect humans, but we have been remiss in documenting trends related to our furry and feathered friends: household pets.
Before you pass the iPad to your pooch, I should explain that these trends are very important to people, too. There are many promising opportunities in “petrepreneurship,” and many businesses that serve the needs of pet providers will need good information on where the market is headed.
Let’s start with a few facts courtesy of the American Pet Products Association. How big is the market? The most recent numbers available are for 2009-2010. It’s estimated that in 2010, Americans spent $47.7 million on their pets. An article on 24/7 Wall St combines that information with U.S. Census data to inform us that, “These expenses have increased from 0.9% of household budgets in 1989 to 1.4% in 2009.” That’s more than a 50% increase in the share of household budgets for pets in the last decade. Sounds like a growth industry to me.
In roughly the same time period, the number of U.S. households with pets has increased from 56% to 62%.
And what kind of pets, exactly, are we talking about? Even though more households have a dog than a cat, cats have the upper paw, with 93.6 million feline pets compared with 77.5 million canines. However, there are more pet fish than cats and dogs combined: 171.7 million of them swimming in American aquariums. Rounding out the menagerie are 15 million birds, 13 million horses, and, yesss, over 13 million reptiles.
According to the report, U.S. Pet Market Outlook 2010-2011: Tapping into Post-Recession Pet Parent Spending, Americans are expected to boost their pet spending to as much as $70 billion by 2014. One of the reasons cited is “a human/animal bond that is possibly stronger than ever as a result of the recession.” The report expects spending to increase on “ethical products,” such as “organic/natural, sustainable, humane, etc.”
The breakdown for the $45.5 billion American spent on their pets in 2009 is as follows:
- Food, $17.56 billion
- Supplies/OTC Medicine, $10.41 billion
- Vet Care, $12.04 billion
- Live Animal Purchases, $2.16 billion
- Pet Services: Grooming & Boarding, $3.36 billion
In an amazing article entitled “Pet Trends for 2011,” Laura Bennett, CEO of Embrace Pet Insurance, examines new developments in pet care, noting that “pet parents will cut back on their own expenses before those of their pets.” Here are some highlights:
- Wal-Mart will continue to roll out pet grooming facilities, competing with pet salons.
- “Disney has finally caught on to the trend of vacationers traveling with their pets, opening the Best Friends Pet Care luxury dog and cat resort right across from the Walt Disney World Resort.”
- Pet insurance will continue to surge in growth. “I expect overall premium growth of 14% in 2011 that will see the US pet insurance industry grow to $374 million in GWP [gross written premiums].”
- “Retailers such as Target and Costco are creeping into the domain of the veterinarian… Will 2011 be the year that the pet pharma market is burst open and veterinary hospitals cede billions of dollars in revenue and profit to the retail giants?”
Bennett goes on to cite five marketing trends for pet products that should sound familiar to readers of the Minitrends Blog — or any other blog on technology trends:
- Social Networking, including exclusive networks for “pet parents”
- Local Shopping Sites, including Yelp, which review pet product providers
- Pet Blogs, including Pet Connection, Pawcurious, and YesBiscuit!
According to Bennett, among the most needed services in the pet products industry (are you listening, petrepreneurs?) is the integration of e-commerce websites and social networking. “I have yet to find anyone in the pet space succeeding on this front,” says Bennett. “I have to say that in 2010, there was a paucity of web development in the pet world — a missed opportunity indeed.”
While humans claw their way out of the recession, their pets continue to consume a greater share of disposable income, along with all those treats. And opportunities continue to appear for individuals and organizations who can see the business trends in the booming pet products industry.
News Editor, Minitrends Blog
Source: “Industry Statistics & Trends,” American Pet Products Association, 2009/2010
Source: “Ten Things Americans Waste the Most Money On,” 24/7 Wall St, Feb. 24, 2011
Source: “U.S. Pet Market Outlook 2010-2011: Tapping into Post-Recession Pet Parent Spending,” Market Reports Online, March 2010
Source: “Pet Trends for 2011,” Embrace Pet Insurance
Image courtesy of LASZLO ILYES, used under its Creative Commons license.