January 18, 2009
It's official! Anita Campbell, has posted the detailed Pet Industry Trends for 2009 that I write every year over on her Small Business Trends blog. It's from a small business perspective, a topic dear to my heart.
In the meantime, here is a summary for you, just in case you didn't have time for the full version.
Pet-related Small Business Trends 2009
Question: is the pet industry recession-proof as many say it is? Answer: 2009 will prove out whether or not pet owners spend on their pets through thick and thin.
The overwhelming pet-related trend in 2009 will be value for money – spending more thoughtfully and spending less. 2009 spending will level off as pet owners pay more attention to their budgets. The top ten trends are:
1. Pet parents will spend, but more thoughtfully than in recent years
Spending on pet supplies and over-the-counter medicines was projected to increase 5.1% in 2008 from $9.8 billion to $10.3 billion according to the American Pet Products Association (APPA) but before the recession announcement. We would not be surprised to see more modest increases in the range of 2% in 2008, continuing on to 2009.
2. Pet services for pets continue to grow
There’s a reason Wal-Mart is testing grooming in its stores and expanding its pet aisle – pet parents are spending good money in this area, even in a recession. More than $3 billion dollars will be spent on pet services in 2008 according to the APPA, which will likely continue to grow in 2009, but at a lower rate than in prior years.
3. Dog’s Star on the Rise for 2009?
The number of cats in the US have long dominated dog numbers (according to the American Veterinary Medical Association, there are more than 72 million pet dogs in the U.S. but nearly 82 million pet cats). Will the new First Dog inspire people with dog allergies to reconsider bringing a dog in-house?
4. Growing interest in pet health care
Pet parents are taking control of their pets’ health care as they do their two legged children. Technology from the human world continues to make its way into the veterinary tool kit including non-invasive surgeries, human medical devices and services being applied to pets. Pet lovers want, and are demanding, the same treatment options for their pets as they can get for themselves.
5. Pet insurance edges towards the mainstream
We estimate the size of the US pet insurance market to be $271 million in premium in 2008, up from approximately $220 million in 2007 (a 23% increase) and we expect 2009 premium to reach $328 million. We project that the market will grow to $500 million by 2012.
6. Hybrids take center stage
Not just popular for cars, recent years saw the popularity of hybrid dogs grow rapidly. As predicted last year, 2008 saw the growth of the puppy farm hybrid to take advantage of the inflated prices people are paying for these dogs. 2009 is only going to get worse in this respect.
7. Increased competition from larger players.
Larger companies are beginning to recognize the economic potential of the pet industry. Target and Wal-Mart are both expanding their pet selection and using pets in their advertising.
8. Large companies hold off buying smaller just when the prices are right.
Some might say that right now is the perfect time for consolidation in the pet industry because of the incredibly low valuations but don’t expect much to happen in the first half of 2009.
9. Increased online sophistication from new pet-related businesses in ecommerce, design, and usability.
In 2008, a whole slew of new “WebMD for pets” websites appeared, such as WebVet, PetMD, and PetDoc, and we’ll see them battle it out for the lead position in 2009. Newer players are more sophisticated in design and ecommerce, reaching their target audience via web-site usability, search engine optimization, paid search, and word of mouth marketing.
10. Pet-related blogs continue to grow their influence.
The power of pet-related blogs really showed up during the pet food recall in the middle of 2007. Blogs such as Pet Connection, Pet Sit USA and Dolittler continue to provide high quality commentary on all aspects of pet news and issues.
And one final bonus trend that indicates the direction of pet health …
11. The divergence of the veterinary clinic
On the one hand, the advent of advanced human medical tests and treatments in the pet world has led to the growth in private specialty clinics. At the other end of the spectrum, there is good money to be made by a single veterinarian in a practice focusing on pet wellness, without the need for fancy equipment and more than a handful of support staff. We predict this divergence between wellness and accident/illness care in veterinary clinics will grow noticeably over the next five years.
So there you have it - what do you think the pet trends of 2009, 2010 and beyond will be?
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