Report: 4 key trends driving $15 million US pet market

Valued at US$15 billion in 2014, nonfood pet supplies are part of a much larger US market for retail pet products and services, totaling almost five times this amount. Yet the competitive allure of the pet supplies segment — which grew by 15% during the five-year 2010-14 period — is as irresistible as ever to retail marketers, according to market research publisher Packaged Facts in the report, “Pet Supplies in the US, 10th Edition.”
More than 2,250 companies of varying sizes compete in the US pet supplies market. This number has grown steadily as more companies have oriented themselves toward the pet and pet supply markets, notes David Sprinkle, research director, Packaged Facts. And the competition will likely continue to ratchet up as the market grows steadily to reach a projected $17 billion in sales by 2019.
In “Pet Supplies in the US, 10th Edition,” Packaged Facts pinpoints four key factors that will influence market growth during the rest of 2015 and beyond. These drivers and macrotrends include:
Impact of economy on pet spending: Like most consumers, pet owners adapted to life in the "new normal" economy, and many continue to retain their cautious approach toward spending. While a growing number of pet owners feel as though their financial situation has improved, a much larger constituent is barely maintaining the status quo, while some consumers are still struggling significantly. Yet, while many consumers are still feeling the economic pinch, survey data also reveal that pet owners are increasingly seeing themselves as better off relative to previous years and seem to be increasingly optimistic about their future.
Savings still a priority for pet owners: Cost savings are still important for pet products. Roughly half of pet owners feel that they are spending more than they used to on pet products. However, between 2011 and 2015, the percentage of pet owners who feel that pet products are becoming too expensive dropped from 74% to 64%, indicating that a growing number of pet owners may be comfortable revisiting higher priced products. At the same time that some pet owners are less concerned about cost, the vast majority (71%) still agree that they seek out lower prices, special offers, and sales on pet products. Thus while some consumers are becoming more receptive to higher cost items, most still appear to be bargain hunting.
Premiumization and natural pet products: For the past decade, premiumization has been driving much of the pet market growth, and this trend remains in strong play. Premiumization especially drives increased sales (at least in dollars if not in units) of high-end pet products, and most industry experts view the trend as critical to maintaining growth and profit as margins on premium pet product lines can be considerably higher than for standard brands. Natural pet products are a key target for premiumization, and consumers continue to look for natural products in the non-food pet products space. Pet health is another key medium for justifying market-supporting higher prices for premium products, and virtually all pet product marketers are focusing more intensively on pet health. Pet owners are willing to spend more if they believe that the products offer health and wellness benefits.
Baby boomers as major key to market growth: At around 77 million strong, the generally high-earning and big-spending baby boomers are one of the most important forces driving the pet industry and one that holds enormous promise. To date, boomers have broken the historical pattern of slacking off in pet ownership as they age. Instead, they have superimposed their proclivities toward health/wellness and self-pampering onto their pets. In and of itself, this is very good news for the pet industry and pet markets. But the news gets even better in that boomers are rapidly aging into the senior bracket. If boomers' "rule-breaking" behavior with regard to pet ownership continues, the result will be robust pet market participation in the senior cohort, where pet ownership rates have historically been far below average.
"Pet Supplies in the US, 10th Edition" compiles extensive and proprietary survey data on pet product trends, consumers, and pets, and carefully examines key factors influencing market growth. All pet types are considered, including cats and dogs as well as birds, small animals, fish, and reptiles. The report covers all major nonfood pet product categories including cat litter, rawhide/natural chews, other dog/cat supplies, and non-dog/cat supplies. Within these categories, major segments examined include cat litter, flea and tick care, toys, bedding, grooming, clean-up, and many others.

US pet market to reach US$73 billion in 2014

The pet market is expected to have sales of US$73 billion by the end of 2014, according to to a Packaged Facts report, "US Pet Market Outlook, 2014–2015." The driving factor for this number is pet humanization, which has given rise to premium pet product shoppers across all platforms, says the report.

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The projection includes pet products such as petfood and nonfood pet supplies, such as toys and chews, cat litter, bedding, housebreaking and clean-up products, houses and carriers, grooming products, leashes and collars, feeding/watering devices, and apparel. It also encompasses services, such as veterinary services and nonmedical pet services like grooming, boarding and training.
Pet humanization not only includes giving pets human-quality products, but also veterinary procedures like chemotherapy, MRIs and hip replacements, as well as supplements like glucosamine and omega-3 fatty acids. Owners are also buying human-grade petfood containing super fruits, and designer beds, bowls and clothing. Finally, they are also purchasing luxury services like boarding options that are similar to hotel rooms.
A 2013 Packaged Facts survey found that 70% of pet owners would be willing to spend extra money to ensure the health of their pet. It also found that 30% of pet owners would prefer to shop at retailers that offer the best products available no matter what the increase in cost. According to the latest report, premium pet product shopping is most common among higher income households. US households earning US$70,000 or more account for 54% of pet market expenditure, and these consumers are responsible for a large share of the bill for premium pet products and services. These consumers are also more likely to have been less affected by economic downfalls and are recovering more quickly.

Packaged Facts Report finds tough economic times have not hindered US pet industry

Even through tough economic times, the US pet industry continues to move forward, according to market research firm Packaged Facts in its new pet market report on US dog and cat owners.
According to a Packaged Facts survey of nearly 2,000 pet owners, three main factors are driving the US pet market: the burgeoning pet parenting phenomenon, the increase in pet ownership by the family-oriented and demographically potent Hispanic population, and the prevalence of pet ownership among affluent Americans. 

Free 'Pets and Vets' report reviews 2011 retail pet sector

The Wall Street Transcript published a free report, "Pets and Vets," offering a review of the 2011 retail pet sector and an analysis of successful pet retailers like PetSmart.
This pet market report contains expert industry commentary and in-depth interviews with public company CEOs, equity analysts and money managers about petfood trends, growth in pet retail, veterinary care and more.  According to Peter Keith, senior research analyst for hardline retail and consumer products and a vice president at Piper Jaffray & Co., companies with specific sales and margin drivers and pricing power, such as PetSmart, will be able to grow business, regardless of the economic environment. The trend of consumers trading up to premium petfoods means they are buying more expensive, higher-margin petfood products, which is favorable to PetSmart. Inflationary trends also contribute to PetSmart's success, driving some sales and extra EPS growth in 2011 and 2012. 

Pet Food Talk provides online dog food coupons to consumers

Pet Food Talk Inc. released its dog food coupon website, which the company says condenses its pet food consultation business model into a fully integrated website to help consumers save money.
Pet Food Talk's Dog Food Coupon website, which the company says is updated daily, lists dog food brands along with the latest coupons being offered by that company.
Pet Food Talk Inc. has also started developing more petfood coupon sites, including one for cat food, horse food, snake food and fish food. These projects are expected to be completed by early summer 2011, according to Pet Food Talk Inc.
"Dog food manufacturers are constantly releasing promotions. I don't recommend that anyone ever pay full price for their dog food, since there is almost always a coupon available that will allow them so save as much as 20% off of their purchase" said Adam Davies, creator of Pet Food Talk Inc.

Packaged Facts: US pet market outlook strong for 2011-2012

A report released by Packaged Facts on the US pet market found that despite slow growth due to the recession in 2010, sales of petfood and pet products are expected to increase at a faster rate in 2011 and 2012.
The report, “U.S. Pet Market Outlook 2011-2012,”  looks at US pet market retail sales and trends overall and in four core categories: veterinary services, petfood, non-food pet supplies and non-medical pet services. It found that sales of all pet products and services rose 4.3% in 2010 to US$55.07 billion. Sales of veterinary services increased the most in 2010, to US$19.69 billion. Non-medical pet services experienced the second largest growth increase at 5%, to reach US$6.11 billion. Sales of petfood increased 2.8% to US$18.35 billion and sales of pet supplies increased 2% to US$10.92 billion, according to the report.
Despite a recession, Packaged Facts' report says that the US pet market remains healthy, attributing this strength to factors such as the human-animal bond, an aging pet population and big-spending baby boomers. Packaged Facts expects the annual sales rate to recover to approximately 5% in 2011 and to nearly 6% in 2012, reaching US$61.4 billion. 
“The market bulwark will continue to be the most health-oriented category, veterinary services,” said David Lummis, the report's author. “As the population of senior pets continues to rise and market participants continue to adapt human-style technologies and medications and develop new pet-specific ones, the veterinary category will experience a 9% compound annual growth rate, which is much higher than other segments. As a result of its faster growth, veterinary services will continue to grow as a share of the total pet market.”
Packaged Facts' pet market outlook report can be purchased online.

Global Pet Expo 2011 sets records in attendance, new pet products introduced

Petfood companies and exhibitors showed off the latest pet products on the floor of Global Pet Expo 2011.

The American Pet Products Association and Pet Industry Distributors Association  announced that Global Pet Expo 2011 exceeded 2010's record-setting numbers in nearly every aspect with thousands of new pet products introduced, and a record number of booths, exhibiting companies and buyers attending the show.
Global Pet Expo 2011 took place March 16-18,  in Orlando, Florida, USA. The show had 835 exhibiting companies, 2,380 booths and total attendance of 4,691 buyers – the highest buyer attendance ever at Global Pet Expo. Pet Expo’s Twitter and Facebook pages also reached all-time highs, with Twitter followers increasing 51% and the Facebook fans increasing by 325% from the previous show.
“I believe our new show date pattern definitely contributed to the record level of attendance this year,” said Andrew Darmohraj, APPA senior vice president. “Overwhelmingly we had heard from buyers that the amount of time they spend at the Show would increase should the show dates take place on weekdays only as opposed to the previous format of Thursday through Saturday. As buyer attendance is critical to the success of Global Pet Expo and its exhibitors, we listened and successfully made the change to a Wednesday through Friday format.”
Dog trainer and TV personality Victoria Stilwell was named the 2011 recipient of Global Pet Expo’s annual “Excellence in Journalism and Outstanding Contributions to the Pet Industry Award.” Stilwell accepted her award at a media-exclusive event sponsored by Nestle Purina Pet Care Co. on March 17. Other show highlights included the debut of the New Products Showcase Awards Presentation and the announcement of APPA's 2010 pet industry spending figures.
The 2012 Global Pet Expo is scheduled to take place from February 29 through March 2, 2012, in Orlando, Florida, USA.

Petco, Petsmart spend combined US$70 million on advertising in 2010

From January through October 2010, Petco spent US$12 million on measured media in the US, while its chief competitor, PetSmart, spent US$58 million advertising its products and services, according to Kantar Media.
Looking to increase advertising and promotional spending in 2011, Petco named Initiative as its media agency of record, said Greg Seremetis, Petco's vice president of marketing. According to Seremetis, this was the first time the business was reviewed in more than five years.

Americans spend more money on pets than children

Beware what you read on the Internet. I know, that should go without saying. But even supposedly seasoned journalists like those of us at Petfood Industry/Petfood-Connection.com have to relearn this lesson from time to time.
Yesterday we posted a news item with a headline that is definitely a grabber: "Americans spend more money on pets than children." The source, a blog on the website for The Telegraph in the UK, seems solid at first glance; the blogger, Pete Wedderburn, is trained as a veterinarian and has been writing a column about pets for 25 years.
However, nowhere in his post does Wedderburn attribute his source for the claims he's making: "... in the USA, where all worldwide trends seem to start, children's toys have been overtaken by another, rapidly growing market: pet products. Astonishingly, people are now spending more on their pets than they are on their children."
Wedderburn does acknowledge that the "statistic" he's referring to (but never actually reveals) encompasses the entire pet market, including petfood, and he's comparing it mainly to children's toys. Perhaps he never makes the direct comparison because he doesn't have exact data for pet toy sales vs. children's toys sales -- and because his headline and main claim are a lot more provocative and guaranteed to grab attention?
 Americans now spend US$21 billion a year on children's toys and games, according to the NPD Group, a market research firm. (Full attribution: I found that statistic in an online article about US toy purchasing, not on the NPD site, though I looked there.)
 The American Pet Products Association (APPA) estimates US pet owners will have spent a total of US$47.7 billion on their pets by the end of this year. So yes, $47.7 billion is more than the $21 billion spent on children's toys -- but it's not a very exact comparison, is it?
Unfortunately, APPA does not break out sales of pet toys, so I couldn't make the direct comparison, either. Now I'm curious! If someone knows the annual US sales of pet toys, please share.
(By the way, APPA's estimate for total 2010 petfood spending is US$18.28 billion. We should know soon if that holds up.)
In trying to find data to back up Wedderburn's claims, I did find some interesting information -- on, yes, another blog! -- that could possibly explain them. At first glance, a table with data from the Bureau of Economic Analysis on where Americans have increased spending since the recession began seems to support the claims. The table shows pets as the second category, ahead of education and child care. And the amounts spent from the last quarter of 2007 through the second quarter of 2010 (this blog was posted in August) show pet spending at US$5.7 billion versus US$3.6 billion for child care.
But you have to figure that at least some portion of the US$36.9 billion spent on education included for children (even public schools charge various fees), as did spending on healthcare, food and drink, personal care products, telephone equipment, etc. That child care figure is probably just money spent on having a child watched by someone other than the parents. (Children's toys aren't mentioned.)
Anyway, I updated our news item to reflect that the information is solely according to Wedderburn, and I included a link to the blog on American spending habits. Lesson learned!

Report: Pet industry to continue growth

The U.S. Pet Market Outlook 2010-2011: Tapping into Post-Recession Pet Parent Spending from Packaged Facts predicts that the pet industry will rise from US$53 billion in 2009 to over US$70 billion in 2014.
Strong demand will be seen for products and services that both enhance pet health and pampering as demand begins to kick in during 2010.

FSI coupon activity up 8% in 2009

Free standing insert (FSI) coupon activity increased 8.0% during 2009, according to Marx Promotion Intelligence. Petfood was a large part of the increased activity, making three top 10 lists of the coupon activity.
Petfood was listed sixth for new product introductions and second for coupons issued. For individual retailers, PetsMart was ranked second behind Target for total FSI pages circulated.

Report reviews growing segments of pet market

Senior, weight management and special needs pet products may make significant developments in the current market, according to Bharat Book Bureau.
The US dog and cat population age six or older is increasing, according to the American Veterinary Medical Association.
Dogs six and older increased from 42% in 1996 to 44% in 2006, and cats of the same age rose from 37% to 44%.
Similarly, the Association for Pet Obesity Prevention said 44% of dogs and 57% of cats were overweight or obese as of 2008, up since 2007. And older animals had an even higher incidence of obesity.
To offer insight on this topic, the report discusses the following market segments:
*Petfood, including nutraceutical treats
*Prescription pet medications
*Devices and other non-food assistance products
*Pet supplements
The report can be purchased online.

Senior, weight management pet products expected to increase

The aging pet population and the epidemic of overweight/obese pets are two emergent trends in the health product segment of the US pet market, according to the report "Senior, Weight Management and Special Needs Pet Products in the U.S." from market research publisher Packaged Facts.
The US$4 billion market for senior, weight management and special needs pet products is expected to increase 55% over 2008 sales to almost $7 billion in 2013.
“In light of the humanization and premiumization trends, it's a market segment that will only broaden in the years to come,” said Tatjana Meerman, publisher of Packaged Facts.