Throughout the year I work with many pet business owners, including pet related service providers, pet product manufacturers, online and offline retail shops, and new product and services companies entering the pet industry market. In addition, I speak with a variety of industry analysts to keep up with trends in the pet industry.
A major part of strategic planning with my clients involves discussing what current, and future, trends I see coming in the pet industry, and how they can utilize this knowledge to be more successful in their business.
Top Pet Industry Trends for 2012The pet industry continues to rise above other industries in viability, success, health and resilience, despite the ever-present challenging economy.
The Facts/The Market
All indicators point to a continuation of this trend in the next year with the report, “
U.S. Pet Market Outlook 2011-2012,” from Packaged Facts looking at the US pet market retail sales and trends overall. The report indicates that "sales of all pet products and services rose 4.3% in 2010 to US$55.07 billion; and expects the annual sales rate to recover to approximately 5% in 2011 and to nearly 6% in 2012, reaching US$61.4 billion."
The American Pet Products Association (APPA) indicates in their
2011-2012 APPA National Pet Owners Survey, "62% of U.S. households own a pet, which equates to 72.9 millions homes. In 1988, the first year the survey was conducted, 56% of U.S. households owned a pet as compared to 62% in 2008." The APPA information indicates "total U.S. pet industry expenditures for 2009 was $45.5B, 2010 $48.35B and estimates 2011 at $50.84B."
Mintel "expects the industry to maintain a steady pace of growth, increasing by 33% over the next five years to reach $67.7 billion in 2016."
While the total numbers may vary slightly among various reporting agencies, there is no doubt that the pet industry overall is still a growing industry.
2011 is showing good signs for continued impermeableness to the slip in the economy. We expect this trend to continue as baby boomers play a role in these growth trends and look to pets to fill the void left by empty nests, as pets increasingly grow in their position as strong family members, as well as the increase in life expectancy of pets.
With pets heightened status in the family growing to more and more families comes an increased awareness and interest by more pet owners for information on how they can best care for their pets, integrate them more in their busy lives, and make their pets lives more happy, healthy, rewarding and engaging.
For the future, we do, however, see leveling off and selective purchasing of pet owners as the economy continues to takes it toll on the family budget. In addition, pet ownership growth is beginning to level somewhat because of shifts in pet ownership of early baby boomers now reaching senior age and consequently having less pets in their family, as well as a bit slower growth of pet ownership in the overall middle age market as related to several years ago.
Packaged Facts agrees as indicated in their report that states "from 2009 to 2010, the overall rate of pet ownership decreased slightly, from 54% of US households to 53%. Dogs, reptiles and fish were the only segments to increase, and the dog increase from 36.7% to 36.8% was almost negligible."
Retailing, online and offlineAlthough the brick and mortar segment of the pet market has been driving most purchases from pet lovers, online purchasing will continue to increase as online retailers provide increased price and shipping deals to rival the cost of a trip to the pet store. A growing number of sites are now offering free shipping options for pet food, as an example. This new 'trend' will drive pet owners to increase their price comparison shopping for pet products and look for more convenience in their lives, consequently increasing their online purchasing.
According to
Packaged Facts, "nearly three-quarters (74%) of pet owners look for lower prices, special offers and sales on pet products, and about half (47%) shop for pet products at a variety of stores.
There will be more challenges ahead for the smaller, independent pet retail businesses, online and offline, as competition continues to grow from a wide variety of sources including big box, mainstream retailers and large pet retailers. Those small retailers that specialize in niches, as well as provide the ultimate in customer service and retention programs, will be the ones that continue to survive.
Larger pet retailers will need to continue to expand into licensed and private label products and diversify in other service related areas in order to keep and grow their customer base.
Quality trumps quantityAs the economy continues to be a challenge for all segments including pet lovers, shoppers will increase their price consciousness, and hold longer term value in high regard, allowing them to stretch their pet spending dollar.
Overall, indulging their pets will still be a priority, but with smaller dollar purchases like toys and treats, rather than higher dollar luxury items.
Jumping on the pet business bandwagonLarger non-pet related companies and retailers continue to jump on the pet bandwagon, developing and offering products and services directed to the pet lover. Examples include Omaha Steaks offering pet treats, Kroger offering private label health insurance and pharmaceutical services for pets, Walmart offering grooming services, and more.
We'll see increased private labeling and co-branding of a wide variety of products and services - everything from pet food, treats, toys, services and more - as companies aim to increase their offerings targeting the pet loving market to increase their prospective customer base, and reap the benefits of being in a more sustainable market.
Gobble. Gobble.
Like many industries in this stage of development, acquisitions are increasing as larger companies gobble up smaller pet companies in an effort to gain market share; and smaller pet businesses stand to 'cash in' on their growth. We expect to see continued acquisitions throughout 2012.
Improved Health and CareDevelopments in pet healthcare have grown dramatically in recent years as new innovations mirroring the human realm grow in the pet market.
Just as in human healthcare, advances create opportunity for our pets to live longer lives. We'll see more drugs, procedures and treatments developed, tested and released, as well as facilities that cater to specific issues related to our pet's care.
Consequently, we will see an ever growing market for 'senior' specific pet products and services; including supplements, toys, clothing, services, safety and mobility products and services, specific age appropriate diet and food choices, and more.
In addition, we will see more and more pet related and non-pet related companies offering services such as private label insurance, pharmacy and drug products and services, long-term care options, specific 'senior trained' service providers, flexible spending accounts, trusts and more.
Food and GoodiesWith the seemingly ever present recalls from a variety of food and treat manufacturers, we see an overall small, but ever growing trend in an the number of pet lovers turning to independent and reliable sources for information about the ingredients and manufacturing processes of their pets foods and treats. This 'trend' is still in it's infancy, as the majority of pet lovers continue to believe strong marketing claims of a wide variety of pet food and treat companies.
As concerned pet owners seek out more information about the food their pets eat, they will be exposed to more variety and availability of different types of foods for their pets; everything from strict raw, prepared and cooked meals, dehydrated meals and improved super premium kibbles and feeds; driving growth in the 'healthier choice' food and treat market. We expect pet consumables companies to continue to improve the ingredients of their pet foods and treats, and concentrate their marketing efforts on these products.
Green and Healthy Continues as the New 'Black'Green, healthier and holistic products in the pet market have been around for several years now, as pet lovers search out healthier and more environmentally friendly products and services for their pets.
Pet lovers are becoming more and more educated about the health of their pet's products as information becomes available through a wide range of sources via the Internet and therefore are demanding eco-friendly, healthier, natural and organic options. In addition, as a result of increasing questionable ingredients and materials from foreign countries comes to light in pet products, consumers will look for more 'Made in the USA' products for their pets.
We will see a continuation of greener, healthier and holistic options for pets in the market in categories such as pet food, toys, services and more.
On the GoAs the number of pet lovers increase who regard their pets as part of the family, products and services marketed toward pet related travel will continue to grow and evolve.
We will see more and more products and services come to market through transportation services, hotels, lodging, and automotive industries targeting the pet lover market; as well as products related to ease of transport and travel including carriers, bags, portable essentials and more.
Products and ServicesThe toy category will continue to grow. We see strong growth and focus on interactive, intelligent and treat dispensing puzzle type toys for cats, dogs, birds and other pets; as well as tougher toys for dogs and greener, eco-friendly, 'Made in the USA' and healthier toy options for pets. We also see growth in general private label, licensed, and co-branded products.
The pet services industry in general is in a growth mode, however many businesses within this segment of the pet industry have seen difficulties. Pet sitting, dog walking, doggie daycare, and and other similar pet services are challenged because of the down economic turn. Pet services who are expanding and broadening their offerings and marketing strategies are seeing more success.
A growing segment of the pet owning population will seek out human type of services for their pets including massage, body work, swimming, and other spa-related services for several reasons including pampering and athletic aspects.
In addition, pet products that have been segmented for specific pet loving audiences and their lifestyles, like dog/cat sports, will begin to be available to the mainstream pet lover through various retail and online channels in an effort to satisfy a new trend from pet lovers seeking new and fun activities they can enjoy with their four-legged family member.
New and innovative pet product launches are on the decline as the market has been flooded over the past years. Larger, well-funded companies lack the initiative, talent and means needed to bring extremely, new and innovative pet products to market; and smaller independent individuals lack the funds and margins needed to bring these types of pet products to wide launch.
We will see, however, very determined smaller companies and individuals that will have the talent and means to bring highly unusual, innovative, and what we call 'why didn't I think of that' products and services to market. We will also see many of these smaller companies and individuals, without the means, licensing products to larger pet companies, as larger pet companies look for innovation.
In conclusion...These are just a few of the trends we see affecting and directing the pet industry in 2012. As an aspiring pet business owner, or current owner, we hope that these trends will help you increase your business and your sales in the coming year, and provide pet owners with the products and services they want and need.
Sources:
Market Report: Pet owners seek new information sources Market Report: Growth in US pet ownership slows with economyUS pet owner buying trendsPet Market Outlook 2011-2012
Your pet business website is going to need frequent updates to keep its position with Google, according to the company.
