Pet Industry Weekly

Kroger Offers Prescription Pet Meds

2012-01-30T17:58:00.000-08:00

Kroger is now offering pet medications at its pharmacies nationwide, with many covered under its $4 generic program, according to the Houston Chronicle. "Four legs or two, same pharmacy," by David Kaplan, Houston Chronicle, January 23, 2012 It's a good article, pointing out how this is the natural evolution of the veterinary industry.

Target is piloting a similar program in 670 pharmacies, but Kroger is already full-steam ahead in it's over 1,900 pharmacies in the U.S. Already under pressure from the economy and other factors, it seems veterinarians can't rely on the old business model moving forward and will need to adapt.

On the flip side, this new mass marketing will benefit many segments of the pet industry and satisfy consumer demand for value pricing of prescription (human and) pet meds.

Pet Services Demographics Support the Trends

2011-12-30T09:37:00.000-08:00

A good article on pet services by CNBC highlights consumer demand for comprehensive dog care solutions. High-End Doggy Day Care: No Downsizing For Fido

Combining health-related products with a comprehensive suite of services is a growing trend in pet retail. These pet owners can be stickier than in other segments, spending more money per visit and coming back more often than shoppers in the other pet segments. Consumer spending demographics give a clue as to why: the segment is widely bought by higher income pet owners. For example, over 50% of nationwide pet services spending was by households making over $100,000 per year.

If you operate a pet business, check out our upcoming 2012 pet industry research.

Hurtta dog wear finally available in the U.S.

2011-12-14T18:36:00.000-08:00

Popular outdoor dog apparel from the Finnish company Hurtta is now available in the U.S.

Pennsylvania-based Abel Pet Supply has a selection of these popular and functional raincoats, jackets and fleece available online, and just in time for winter.

Emerging pet trends

2011-12-04T19:31:00.000-08:00

A new study illustrates the health benefits of owning a pet, finding pet owners have greater self esteem, are more physically fit, and more extraverted than non pet owners. Unlike most studies that simply add a pet to the equation to find a benefit but no causality, this one compares pet owners to non pet owners across these metrics.

Apparently pet owners also own a lot of gadgets. A demographic profile of iPad owners reveals that their most common traits are being male, owning pets, and playing video games.

Speaking of gadgets, BusinessWeek notes that chipmaker Qualcomm is entering the consumer market with Tagg, a GPS locator for your dog. A $200 clip on product with a year of free service (on the Verizon network), the device alerts you if your dog leaves a predefined area. Since the broader effort envisions everyday gadgets and appliances wired up using their chips, this product could help evolve the Qualcomm brand.

PetSmart Q3 2011

2011-11-17T10:04:00.000-08:00

PetSmart, Inc. (NASDAQ:PETM) reported strong quarterly earnings yesterday, highlighting increasing store traffic, organic and natural dog food sales, and services revenue.

Total sales in the third quarter increased 8% to $1.5 billion, of which services accounted for $161 million, up 9%. Comparable same-store sales grew 6.1%, based in part on a 2.2% increase in traffic.

High-end dog food brands like Innova, Wellness and Blue Buffalo were key differentiators, bringing in customers and driving sales.

(This is in contrast to Wal-Mart's recent strength in value brand sales. Why? Because about half the dog food market is bought by households making less than $70,000 in annual income, and that half is also growing year-over-year. In fact, strong increases in pet food spending were recently made by households making only $15,000 - $39,000 per year. So it seems there's plenty of room for both value and premium brands to thrive. Check out our pet market research to learn more.)

"Sustained momentum" on exclusive partnerships with Martha Stewart and GNC helped "moved the bar" on proprietary brands from 18 to 22%. In 2012 the company will launch exclusive Toys R' Us pet toys.

The first national television ad campaign for services in a decade was cited as responsible for increases in customer growth, retention and satsifaction for the grooming business.

Pets and Wal-Mart's Growth Strategy

2011-11-15T17:56:00.000-08:00

It seems as though Wal-Mart Stores, Inc (NYSE:WMT) will continue to leverage the pet industry in its own expansion plans. Besides selling Ol' Roy dog food for years, the company has particularly benefitted since a 2005 expansion of pet products online, and a 2006 launch of its own private label organic dog food.

According to Q3 2012 results, the pet supply business was "strong," showing high single-digit comps, in stark contrast to categories like home care and baby care, which had negative comparable store sales. The company states that "assortment initiatives" in the consumables pet category are making a large impact. The dog food category improved 300 basis points in part due to their value brands.

So its no surprise the company is folding pet supplies into its Neighborhood Markets concept now being rolled out across the country. These smaller stores resemble grocery stores, carrying produce, meat and dairy, dry goods, pharmaceuticals, health and beauty products, and pet supplies.

PetSmart Q1 2011

2011-05-27T08:49:00.000-07:00

PetSmart Inc (PETM) reported strong first quarter 2011 results, booking net income of $71 million on $1.5 billion in revenues, with earnings up 33%. The company reported comparable store sales growth of 5%, services sales growth of 9%, and total sales up 6.8%.

Super premium pet food and services seem to be primary drivers of the customer to the store. The company believes it has captured 15% of the $3.6 billion annual market for grooming and boarding services. Further, the company notes strong sales in grooming supplies, and points to exclusive Martha Stewart and GNC branded product launches.

PetSmart has recently matured efforts to drive the customer into cross-selling and defined channel strategies, as well as adding higher margin private label brands into the mix. A good combination in the highly competitive pet industry.

Source: PetSmart Investor Relations

Pet Industry 2011 Strategic Outlook

2011-04-13T10:37:00.000-07:00

A new market research report for pet industry business development is available for purchase online.

U.S. consumer spending continued to grow across all four segments of the pet industry, cementing its reputation as "recession resistant." But shifting demographics reveal changing patterns by core demographic groups. U.S. pet owner spending by age, income, higher income, household composition, and region are charted, with an Executive Summary by Dillon Media.

The Pet Industry 2011 Strategic Outlook analyzes nationwide spending, trends and business involvement in the industry, including how it fared during the recession and opportunities moving forward. The data aggregate consumer spending on all pets in four main segments: Pet Food, Veterinary Services, Pet Purchase Supplies & OTC Meds, and Pet Services.

The latest available data are from 2009, with forecasts through 2015. This report is valuable to participants in the nationwide pet retail market, for business plan citations, for product development strategy, for marketing and advertising plans, and for an overview of the pet industry landscape.

Eye-catching dog food marketing

2010-03-02T21:50:00.000-08:00

The digital video camera used to film this dog food commercial shoots full HD at 1500 fps. What does that mean? It means we see detail and movement imperceptible to the human eye in realtime.

The same camera was used to shoot slow motion Super Bowl footage, and used by NASA to study parachute deployments. Here, its used by Pedigree to sell dog food, marketing a new perspective to pet owners.

For more slow motion videos, check out visionresearch.com

Dog Training Schools

2009-11-19T10:33:00.000-08:00

A promotional video for a dog training school in Hungary and a good example of creative marketing to dog owners.

In the U.S., check out the Association of Pet Dog Trainers

Sanofi Wins Dogfight for Merial

2009-07-29T08:42:00.000-07:00

Sanofi-Aventis SA will acquire the remaining 50% of the animal-health business Merial from Merck & Co, according to Bloomberg. Global animal drug sales - mostly livestock but also pets - were estimated to grow 7.2% to $19.2 billion in 2008 by Vetnosis Ltd.

Animal Health Care News and Forecast

2009-05-19T08:55:00.000-07:00

Consolidation in big pharma is changing the landscape of the companion animal health market. Merck (NYSE:MRK) and Schering Plough (NYSE:SGP) will combine their respective animal health companies Merial and Intervet. Pfizer's (NYSE:PFE) acquisition of Wyeth (NYSE:WYE) includes Fort Dodge, which combined with Pfizer Animal Health would form the largest animal drug provider in the world. According to Pfizer's first quarter 2009 results, the company has "had productive discussions with the [FTC] regarding the possible divestiture of some animal health products." So it seems part or all of Fort Dodge may be for sale.

What do these mergers mean for growth in veterinary services and pet care spending? Competing products may disappear, jobs may be lost, and supply chains may be disrupted. For instance, in fiscal year 2008, MWI Veterinary supply (NASDAQ:MWIV), Pfizer products accounted for 23% of sales, Fort Dodge 12%, Merial 60% and Intervet 9%.

On the flip side, however, it's clear that pet (and livestock) drugs have become an important part of the new diversified business models of big pharma. Pfizer plans to give the group "more autonomy" and global moves imply additional investment as well. Pfizer Animal Health does business in 60 countries and in the first quarter of 2009 opened a new Shanghai office, expressed interest in acquiring an Indian veterinary health company, and announced new product launches in certain countries.

Long term consumer spending forecasts on veterinary services, prescription and over-the-counter drugs are quite positive. We estimate veterinary services spending to grow 4% in 2009 and 8% in 2010, reaching $16.4 billion by 2011, compared to $13.6 billion in 2007. Compelling demographics will drive future growth. In 2003, the $8 billion spent on vet services was split 50/50 by pet owners making less than $70,000 per year and those making more than $70,000 per year. But by 2007 almost $14 billion was spent, and that ratio changed to 28/72, favoring higher income consumers. Married couples without children are the biggest spenders at the vet, according to the Bureau of Labor Statistics, spending over $4.5 billion in 2007 alone.

Dog Friendly Car Unleashed by Honda

2009-04-09T10:21:00.000-07:00

Honda showed off the Dog Friendly Honda Element concept car at the New York Auto Show today, with integrated dog amenities and safety equipment including restraints, hardy fabrics, an access ramp, a cushioned bed, a spill-resistant water bowl and dedicated doggie cooling system.

Appealing to the broad spectrum of dog owners who increasingly treat their pets like family definitely separates this model of the Element from the pack.

Honda has been developing its pet-themed marketing since 2005, when it launched a dog friendly concept car at the Tokyo Motor Show. Soon after, the company launched Honda Dog in Japan, pitching cars and its Travel Dog line of pet accessories to its 1.5 million monthly visitors.

Not to be outdone, Toyota also has a Japanese website for dog owners featuring the Corolla called C Loves Dog.

Closer to home, DogCars.com helps American pet parents choose the best pet-friendly cars, by reviewing new models specifically from a dog owner's perspective.

Pet Industry Market Research 2009

2009-04-04T20:41:00.000-07:00

The Pet Industry 2009 Strategic Outlook report from Dillon Media LLC has been published.

This market research report charts and analyzes aggregate pet owner spending demographics in the U.S., covering the four main industry segments: Pet Food, Veterinary Services, Pet Supplies and Pet Services.

It includes forecasts and analysis of the recession's impact on pet industry trends and consumer behavior.

Pet owner spending demographics are charted by income, age, general region and family composition from 2000 - 2007 (the latest available) with totals forecasts for 2008 - 2011. Data are from the Department of Labor, Bureau of Labor Statistics, forecasts are by Dillon Media.

The critical higher income brackets are also included for available years.

Published: Feb 18, 2009
Format: Adobe PDF file
Delivery: Emailed to you within 2 hours of purchase.

Why Buy It?
Align your product, customer or business with the strongest demographic groups in the U.S. pet industry. Read more and buy online: Pet Industry 2009 Strategic Outlook

PetSmart Q4 and Fiscal Year 2008 Results

2009-03-05T09:03:00.000-08:00

PetSmart, Inc. (NASDAQ:PETM) announced $5.07 billion in net sales in 2008, up from $4.67 billion in 2007. Comparable store sales grew 3.8 percent in 2008, and pet services continued to stand out, growing 15.8 percent in 2008 to $526.7 million. The year 2007 had one extra week added to the fiscal year in the fourth quarter.

During the fourth quarter of 2008, pet services sales grew 6.9 percent. Net income for the fourth quarter was $78.4 million, compared to $75.4 million for the fourth quarter of 2007.

PetSmart is the nation's largest pet specialty retailer with over 1,000 stores in the U.S., and announced a more cautious approach to new store openings in 2009, in line with the prevailing mood these days about the rest of this year. In 2008 the company opened just over 100 stores and 45 new PetsHotels, on par with the previous couple of years. For 2009, however, the company plans to open 40 to 42 new stores and 20 new PetsHotels, or about a 60% reduction in new store openings and a 50% reduction on new pet hotels.

These results and the 2009 outlook confirm, in our opinion, that pet spending will be impacted, but to a lesser degree than consumer spending in many other industries.

Read more and listen to the PetSmart, Inc. conference call.

Pet Owner Buying Habits Changing

2009-01-21T21:16:00.000-08:00

Even though pets may be toward the bottom of the list of things to cut back on, consumers are still forced to rethink many pet industry purchases these days. Pet food sales seemed to survive mid-2008 price increases and reduced portion sizes, but other segments may not be so lucky as consumers cut back on optional products and services.

The New York Times reports on the do-it-yourself (DIY) trend among consumers, how it's affecting services businesses, including pet care services, and how retailers like Target are adjusting marketing strategies to meet this rapid change in consumer behavior. (Outsourced Chores Come Back Home, by Catherine Rampell, The New York Times, Jan 19, 2009).
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Helmsley's Trust Leaves Billions of Dollars To Dogs

2008-08-25T22:27:00.000-07:00

In June, a New York judge reduced the amount of money available to Leona Helmsley's dog, Trouble, from $12 million to $2 million, ordering the remaining $10 million to go to her charitable foundation.

But the New York Times reports that the charitable trust has been assigned to the care and welfare of dogs, according to a mission statement that may or may not be legally binding. Being the only clear direction for the donor's intent, however, means that the entire trust, valued at $5 to $8 billion, may indeed go to the dogs ("Helmsley Left Dogs Billions in Her Will," by Stephanie Strom, The New York Times, July 2, 2008).

May I suggest outlets that uniquely benefit both dogs and humans, such as service dog programs, public assistance through HSUS and ASPCA funding, a national disaster fund (FEMA for pets), veterinary student grants, a centralized database linking CDC, vets, FDA and the public, and research that also benefits humans?

Pet Business Trade Shows

2008-07-01T08:14:00.000-07:00

Attending a Pet Industry Tradeshow?
Dillon Media can help with booth design, web and print marketing material. Learn more...

Global Pet Expo 2009
Feb 12-14, Orlando, Florida
Presented by the top industry manufacturers and distributors' trade organizations, over 800 companies will launch dog, cat, bird, aquatic and small animal products at this show.

H.H. Backer Winter 2008 Trade Show
Oct 3-5, Rosemont (Chicago), Illinois
New this year is an expanded aquatics section and an All-Natural area of the tradeshow, featuring eco-friendly and green pet products.

Pet Fashion Week 2008
Aug 23-24, New York City.
A smaller trade show focusing on fashion, Pet Fashion Week has quickly grown in the last two years and now includes an annual show in Tokyo. The market in Japan remains strong for luxury dog collars, apparel and supplies.

Pet South America is an international trade show for the Latin American market
Sep 17-19, Sao Paulo, Brazil

Pet Fair Asia has grown steadily over the last couple of years, from 280 to 350 exhibitors. It seems international visitors are interested in the export market; that is, sourcing, manufacturing and shipping from China.
Sep 3-5, Shanghai, China

Toyota and Honda Dog-Friendly Cars

2008-05-29T16:39:00.000-07:00

Honda's dog-friendly concept car introduced in 2005 has evolved into a comprehensive marketing campaign that is creating sales in Japan, according to Reuters ("Dog-lovers of the world unite...around Honda," by Chang Ran-Kim, Reuters, May 29, 2008).

Honda Dog uses its 1.5 million monthly website visitors to sell cars and its Travel Dog line of pet accessories.

Not to be outdone, Toyota also has a Japanese website for dog owners featuring the Corolla called C Loves Dog.

In case you don't read Japanese, it's still fun to click around these sites. I assume it's just a matter of time until the U.S. versions come out as the auto industry aggressively seeks to differentiate products while appealing to broad demographics.

Closer to home, DogCars.com helps American pet parents choose the best pet-friendly cars, by reviewing new models specifically from a dog owner's perspective.

Read all posts about dog cars.

Business Resources

2008-05-14T20:43:00.000-07:00

The largest trade organization in the industry, the APPMA has updated their website with some valuable information for pet businesses and about the pet industry.

Check out the new blog written by Bob Vetere, president of the American Pet Products Manufacturer's Association. This should be a good way to stay informed about the latest trends and issues.

Pet Business News

2008-05-05T09:39:00.000-07:00

VCA Antech, Inc. (NASDAQ:WOOF) reported a profitable first quarter of 2008 as it continues to acquire animal hospitals and grow its laboratory business. Although elective procedures tend to diminish when consumers cut back, this strength highlights the fact that the bar is moving; some services once considered elective are now being considered necessities. VCA seems to be on its way to becoming the managed care company for pets, primarily dogs and cats.

Utilizing the pet industry to differentiate a business in a crowded market has been a popular strategy the last few years. Check out Peninsula House Hound dog-friendly real estate website, with features like 'Search Homes Near Dog Parks'.

Anyone watch Nascar this weekend? Dog food marketing is big business in the U.S., and Mars, Inc.'s Pedigree brand is prominently featured on Kyle Busch's number 18 car. This sports sponsorship by Mars draws an average of about 6 million viewers per race, according to ACNielsen ratings for April and May of 2008. But the company didn't stop there; Mars' Nascar marketing campaign is directly tied to its adoption drive, illustrating the importance of the adoption channel for generating long-term brand loyalty in the pet sector.

Ralph Lauren Dog Accessories

2008-04-17T06:36:00.000-07:00

More than four years after introducing a popular dog polo shirt and cashmere sweater, Ralph Lauren now boasts 16 different dog accessories, including a wider range of trendy shirts, a hoodie, a trench coat, and leather collars and leashes.

Catering to the broad swath of American consumers that own dogs, every retail store allows dogs. And the company's website has vastly improved since I last blogged about it three years ago.

It seems to be a solid strategy to appeal to certain pet parents, with dog products and marketing co-ordinated at the retail level and online. This picture, for instance, is for a human tote bag sold on a Mother's Day page.

Pet Vacuum Cleaners

2008-04-06T19:19:00.000-07:00

Browsing Williams-Sonoma's website, I noticed a $799 Miele Dog & Cat vacuum cleaner, made specifically to handle pet hair.

It seems the response to pet owner demographics, or at least Consumer Reports testing in 2006, has been swift, with pet-specific lines now available from Bissell, Eureka and Dyson, all retailing for under $200.

Two-thirds of American households own a pet of some sort. Forty percent of U.S. households own a dog. That's a large market, with lots of pet hair, suitable for an expensive dog & cat vac. Eight hundred bucks is a lot for a vacuum cleaner, but they are really nice. Even the lowest-end Miele model (the one I own) is fantastic.

Home Depot To Stop Selling Pet Products

2008-02-29T08:52:00.000-08:00

Home improvement retailer The Home Depot, Inc. (NYSE: HD) plans to stop selling pet products in 2008. Overall, the company reported it's first ever yearly sales decline in 2007 yesterday, so perhaps it's wise to re-focus on core competencies. Especially with the state of the housing market.

Home Depot's pet product selection was highly limited in scope and brand selection anyway, with no dog houses, beds, indoor barriers, ramps or other common products a pet owner often adds to a home. Even so, this move signals a broader theme that may play out again soon: large retailers cutting back on pet products discretionary to their business models, but not necessarily to the consumer.

Pet Owner Spending Trends in the U.S.

2008-02-18T21:52:00.000-08:00

A new report has just been published on nationwide pet owner spending trends.

The aging population, childless consumers and the ascendancy of high-income baby boomers are analyzed by their pet spending habits. Charts and tables are included using data from the Department of Labor, Bureau of Labor Statistics that highlight core trends in U.S. consumer spending by income, age, general region, and family composition.

The Pet Industry 2008 Strategic Outlook is our annual report, written for businesses marketing to pet owners.