The business climate for the national pet industry is healthy and steadily growing indicating the sector is definitely not in the economic doghouse. Whether it’s a large golden retriever or a small hamster, the United States is pending more money each year to keep their pets happy and healthy.
According to Stephanie Russo, business reporter with the Arizona Republic, the pet industry is booming. Even with economic belts tightening across the country, more than 70 million people in the United States have some kind of pet in their home.
“These people spent more than $55 billion on their animals despite a weak economy,” said Russo.
The American Pet Products Association (APPA) concured, citing a recent study the association completed. According to the association’s report, approximately $58 billion was spent on animals from California to Florida. According to Russo, this number is significant because it marked the first time in history pet expenditures crossed the $50 billion mark. In addition, Russo explained that these numbers increased steadily even during the worst of the recession, even doubling since 2008 and tripling in size since 1994.
The largest percentage of animal expenditures was spent on food. In fact the APPA notes that according to its survey, more than $22 billion was spent on pet food alone. One reason behind this dramatic number might be tied to recent pet food manufacturer’s need to recall much of its product in recent months. According to the Food and Drug administration, in 2007 pet food manufacturers were forced to recall at least 100 pet food brands that included ingredients from China. These ingredients directly contributed to kidney failure in dogs and cats.
“That was really was a wake-up call to realize what people are putting in their pets’ food bowl,” said Arden Moore, a California-based pet expert, author and radio host.
Moore pointed out that organic and health conscious brands of pet food are popping up in every story from PetSmart to Walmart. These organic or natural brands are typically priced 25 percent higher than the more generic brands. Trends like this keep the business climate for the pet industry healthy and out of the economic doghouse.
This hyper-growth within the pet industry is clearly being effected by the purchasing power of pet products. However, the industry growth can also be linked to an increase in people becoming new pet owners. According to Matt Sena, a former research analyst and trader with Goldman, Sachs & Co., the numbers of pet ownership has expanded approximately four percent a year for the past decade.
“Several large shifts are occurring demographically to contribute to the riese of pet ownership,” said Sena.
These shifts mostly are relating to the baby boomers. According to Sena, these post World War II babies are generally more affluent that younger generations. In addition, as this massive group of boomers approach retirement, they are finding themselves alone in a large house. The new dog or cat therefore becomes a new son or daughter. In fact, many experts are not surprised that many pet owners perceive their animal as a surrogate child.
Like any new parents, new pet owners want to spoil the newest member of the family. That’s why, according to the APPA, a healthy $17 billion was spent on animal services like grooming and supplies. In addition, new business models are popping up all over the country. These businesses are focusing on the desire for owners to pamper their pet, and include such enterprise models as designer clothing lines, expensive spa experiences, and even jewel-encrusted collars and toe rings. According to Sena, all of this points to a golden future for pet businesses that are expected to grow at a healthy four percent for the next two years.
“This is the Golden Age Pet Businesses,” said Sena.
With the growth of pet owners in the United States combined with the increased spending per pet, it is not surprising to that the business climate for the pet industry is a long way away from the economic doghouse.
By Vincent Aviani