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Trends in the Pet Industry
Linda Evans
MBA 592
Dr. Jennifer Edmonds
Agenda
 Introduction
 Pet Industry Trends
 Pet-Related Expenses
◦ Food Expenses
◦ Pet Supplies
◦ Veterinary Expenses
 ...
 Pet Expenses
Introduction
 Pet Ownership:
Year Pet Ownership %
1988 56%
2015 65%
1994 2015 2016
$17B $60.3B $62.8B
 46...
Introduction
 What is the Pet Industry?
38.3%
23.9%
25.4%
3.4%
9.1%
Food
Supplies
Veterinary Care
Animal Purchases
Pet Se...
PET INDUSTRY TRENDS
 Most commonly owned pet?
Consumer Trends
31% 5%27% 25%
 Pet Ownership by Demographic Groups
6%
16%
17%
25%
22%
11%
5%
<...
 Pets as part of the family
 Feelings toward pets now
◦ 60% stronger feelings vs. as a child
◦ 67% care more vs. parents...
 Supermarkets to pet retailers
 Market share:
Retail Trends
37.2%
23.3%
39.5%
PetSmart
PETCO
Other
Year Revenue
2016 $18...
PetSmart vs. PETCO
 Established 1987
 1,400 Stores (U.S., Canada,
Puerto Rico)
 2016 expected revenue =
$7.2 billion
 ...
PET-RELATED
EXPENSES
 Definition
◦ Edible items purchased for pet consumption
◦ Expected expense of $24 billion in 2016
◦ Annual expenses:
Foo...
 Consumer Trends
◦ Natural Products
◦ Health Conscious
◦ Special Needs
 Retail Trends
◦ Places to purchase
 Pet Retaile...
 Definition
◦ Necessary vs. Luxury Items
 Consumer Trends
◦ Environmentally friendly
◦ Demand for new products
 Clothin...
 Definition:
◦ Visits to the veterinarian for medical services
◦ Average Expense per year:
 Consumer Trends
◦ Advanced h...
Veterinary Expenses
HUMANIZATION OF PETS
 Definition
◦ Similar to human insurance: deductibles, co-
pays, etc.
◦ Differences
 No network of veterinarians
 Pay f...
 Consumer Trends
◦ High Vet Expenses leads to demand for
insurance
 Average pet claim: $547
 80% of pets will experienc...
 Definition
◦ Expenses related to transporting a pet from
one location to another
 Consumer Trends
◦ Willingness to trav...
 Definition
◦ Services performed after a pet’s passing
 Consumer Trends
◦ Humanization of pets
◦ Emotional expression
 ...
OTHER
ACCOMMODATIONS
 Definition
◦ Locations that care for
pets while owners are away
 Consumer Trends
◦ Pet humanization
◦ Effects of social...
Pet Grooming
 Definition
◦ Products/services related to cleaning a pet
◦ Annual Expenses:
 Dogs = $83
 Cats = $33
 Con...
 Definition
◦ Teaching skills for obedience and safety
 Consumer Trends
◦ Busy schedules
◦ Humanization/Proper behavior
...
 Summary
◦ Pets are part of the family
◦ Expression of emotions
◦ Busy schedules
Conclusion
 Opportunities
◦ Millennial ...
Questions?
References
 American Pet Products Association (APPA). (2016). Pet industry market size & ownership
statistics. Retrieved ...
References
 Conway, A. (2016). Top 40 pet global food companies: 2015 data now available. Retrieved
June 25, 2016 retriev...
References
 Embrace Pet Insurance. (2016a). Facts & statistics on the US pet insurance industry.
Retrieved July 15, 2016 ...
References
 H., M. (2010). Pets allowed: Developing friendly policies. University Business, 13(7), 18.
Retrieved July 23,...
References
 Irving Place Capital. (2014). No begging necessary for consumer demand in the pet
industry. Retrieved May 15,...
References
 MedicAnimal. (2016). 8 FAQs about different types of dog food. Retrieved June 26, 2016
from https://www.medic...
References
 Pet care undergoes humanization. (2016). MMR, 33(6), 71. Retrieved July 18, 2016 from
Wilkes University EBSCO...
References
 PetSmart Corporate (2016d). Company information. Retrieved June 22, 2016 from
http://phx.corporate-ir.net/pho...
References
 Salerno, K. (2015). Sniffing out the best pet friendly airlines. Retrieved July 16, 2016 from
https://www.tri...
References
 Wilkerson, F. (2016). What is pet insurance? Retrieved July 15, 2016 from
http://www.petmd.com/centers/insura...
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Trends in the Pet Industry - MBA Thesis

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Research project conducted in the summer of 2016 in completion of the MBA program at Wilkes University.

Publicado en: Empresariales

Trends in the Pet Industry - MBA Thesis

  1. 1. Trends in the Pet Industry Linda Evans MBA 592 Dr. Jennifer Edmonds
  2. 2. Agenda  Introduction  Pet Industry Trends  Pet-Related Expenses ◦ Food Expenses ◦ Pet Supplies ◦ Veterinary Expenses  Humanization of Pets ◦ Pet Insurance ◦ Pet Travel ◦ Funeral Services  Other Accommodations ◦ Pet Boarding/Day Care ◦ Pet Grooming ◦ Pet Training  Conclusion
  3. 3.  Pet Expenses Introduction  Pet Ownership: Year Pet Ownership % 1988 56% 2015 65% 1994 2015 2016 $17B $60.3B $62.8B  46% of households own more than 1 pet
  4. 4. Introduction  What is the Pet Industry? 38.3% 23.9% 25.4% 3.4% 9.1% Food Supplies Veterinary Care Animal Purchases Pet Services
  5. 5. PET INDUSTRY TRENDS
  6. 6.  Most commonly owned pet? Consumer Trends 31% 5%27% 25%  Pet Ownership by Demographic Groups 6% 16% 17% 25% 22% 11% 5% < 25 25-34 35-44 45-54 55-64 65-74 > 75
  7. 7.  Pets as part of the family  Feelings toward pets now ◦ 60% stronger feelings vs. as a child ◦ 67% care more vs. parents  Reasons for these trends Consumer Trends 2011 2016
  8. 8.  Supermarkets to pet retailers  Market share: Retail Trends 37.2% 23.3% 39.5% PetSmart PETCO Other Year Revenue 2016 $18.5 billion 2021 $21.6 billion  Estimated Revenue:
  9. 9. PetSmart vs. PETCO  Established 1987  1,400 Stores (U.S., Canada, Puerto Rico)  2016 expected revenue = $7.2 billion  Offerings: ◦ Consumables ◦ Hard goods ◦ Pets ◦ Services  Established 1965  1,400 Stores (U.S., Mexico, Puerto Rico) ◦ Unleashed ◦ Dr. Foster & Smith  2016 expected revenue = $4.5 billion  Offerings: ◦ Food ◦ Supplies ◦ Pets ◦ Services
  10. 10. PET-RELATED EXPENSES
  11. 11.  Definition ◦ Edible items purchased for pet consumption ◦ Expected expense of $24 billion in 2016 ◦ Annual expenses: Food Expenses Expense Type Dogs Cats Food $269 $246 Treats $61 $51
  12. 12.  Consumer Trends ◦ Natural Products ◦ Health Conscious ◦ Special Needs  Retail Trends ◦ Places to purchase  Pet Retailers  Grocery Stores/supercenters  Veterinarian offices  Online ◦ Expanded food selection Food Expenses
  13. 13.  Definition ◦ Necessary vs. Luxury Items  Consumer Trends ◦ Environmentally friendly ◦ Demand for new products  Clothing  Furniture  Retail Trends ◦ Broad offerings ◦ Medication Pet Supplies
  14. 14.  Definition: ◦ Visits to the veterinarian for medical services ◦ Average Expense per year:  Consumer Trends ◦ Advanced health care ◦ Decreases in visits to the veterinarian  Retail Trends ◦ Vet locations/prescriptions in retail ◦ Specialized Training Veterinary Expenses Vet Expense Dogs Cats Routine Visits $235 $239 Surgical Visits $551 $398
  15. 15. Veterinary Expenses
  16. 16. HUMANIZATION OF PETS
  17. 17.  Definition ◦ Similar to human insurance: deductibles, co- pays, etc. ◦ Differences  No network of veterinarians  Pay first, reimbursed later ◦ Other:  Waiting periods  Pre-existing conditions Pet Insurance
  18. 18.  Consumer Trends ◦ High Vet Expenses leads to demand for insurance  Average pet claim: $547  80% of pets will experience a medical emergency ◦ Pets considered family  Retail Trends ◦ 10 U.S. Insurance Companies ◦ Employer offered pet insurance Pet Insurance
  19. 19.  Definition ◦ Expenses related to transporting a pet from one location to another  Consumer Trends ◦ Willingness to travel after a pet ◦ Taking pets on the road ◦ Demographics  Retail Trends ◦ Airplanes ◦ Hotels Pet Travel
  20. 20.  Definition ◦ Services performed after a pet’s passing  Consumer Trends ◦ Humanization of pets ◦ Emotional expression  Retail Trends ◦ Pet memorial offerings at funeral homes ◦ Keepsake offerings Funeral Pet Services
  21. 21. OTHER ACCOMMODATIONS
  22. 22.  Definition ◦ Locations that care for pets while owners are away  Consumer Trends ◦ Pet humanization ◦ Effects of socialization  Retail Trends ◦ Local Offerings  Assessments/applications ◦ Pet Store Offerings  Upgrade options Pet Boarding & Day Care
  23. 23. Pet Grooming  Definition ◦ Products/services related to cleaning a pet ◦ Annual Expenses:  Dogs = $83  Cats = $33  Consumer Trends ◦ Humanization – Health & Hygiene concerns ◦ Awareness of ingredients ◦ Demographics on grooming  Retail Trends ◦ Products to use at home ◦ Grooming at pet stores  Expanded offerings
  24. 24.  Definition ◦ Teaching skills for obedience and safety  Consumer Trends ◦ Busy schedules ◦ Humanization/Proper behavior ◦ Increase in Training Careers  Retail Trends ◦ Training classes  Different Levels ◦ One-on-one training options Pet Training
  25. 25.  Summary ◦ Pets are part of the family ◦ Expression of emotions ◦ Busy schedules Conclusion  Opportunities ◦ Millennial spending power ◦ Pet travel ◦ Restaurants ◦ Colleges ◦ Technology  Challenges ◦ Online competition ◦ Recessionary periods Opportunities Challenges  Effect on business
  26. 26. Questions?
  27. 27. References  American Pet Products Association (APPA). (2016). Pet industry market size & ownership statistics. Retrieved May 11, 2016 from http://www.americanpetproducts.org/press_industrytrends.asp  Becker, K. (2012). Is every trip to the vet traumatic for your pet? This “mobile vet clinic” could be for you. Retrieved August 4, 2016 from http://healthypets.mercola.com/sites/healthypets/archive/2012/02/17/mobile-veterinary- clinics.aspx  Boncy, J. (2012). Pet retailers bite back. Retrieved July 24, 2016 from http://www.petbusiness.com/November-2012/Pet-Retailers-Bite-Back/  Carter, B. (2016). IBISWorld industry report 45391: Pet stores in the US. Retrieved May 15, 2016 from https://www.ibisworld.com/gosample.aspx?cid=1&rtid=101  Casciotti, D. & Zuckerman, D. (2016). The benefits of pets for human health. Retrieved June 20, 2016 from http://center4research.org/healthy-living-prevention/pets-and-health-the- impact-of-companion-animals/  CATCH Canine Trainers Academy (2016). Dog training careers are on the rise. Retrieved July 23, 2016 from http://catchdogtrainers.com/trainer-careers/dog-training-on-the-rise/
  28. 28. References  Conway, A. (2016). Top 40 pet global food companies: 2015 data now available. Retrieved June 25, 2016 retrieved from http://www.petfoodindustry.com/articles/5823-top-40-pet- global-food-companies-2015-data-now-available  Cook, D. (2015). Big growth expected for pet insurance. ALM Media, LLC. Retrieved July 24, 2016 from http://www.benefitspro.com/2015/04/24/big-growth-expected-for-pet- insurance  Coren, S. (2011). Do we treat dogs the same way as children in our modern families? Retrieved June 21, 2016. https://www.psychologytoday.com/blog/canine-corner/201105/do- we-treat-dogs-the-same-way-children-in-our-modern-families  Day care has gone to the dogs. (2000, July 13). Christian Science Monitor. p. 12. Retrieved July 23, 2016 from Wilkes University EBSCOhost.  Dicks, M. (2014). Data suggest veterinary market will improve in 2015. Retrieved May 15, 2016 from https://www.avma.org/PracticeManagement/BusinessIssues/Documents/Data- suggests-veterinary-market-will-improve-in-2015.pdf  DogVacay.com. (2013). State of pet travel in the U.S. Retrieved July 15, 2016 from https://dogvacay.com/img/infographics/dogvacay-state-of-pet-travel-us-2013.png
  29. 29. References  Embrace Pet Insurance. (2016a). Facts & statistics on the US pet insurance industry. Retrieved July 15, 2016 from http://www.embracepetinsurance.com/pet-industry/pet- insurance/statistics  Embrace Pet Insurance. (2016b). Pet business trends 2013. Retrieved August 6, 2016 from http://www.embracepetinsurance.com/pet-industry/pet-trends/2013  Farmers Group Inc. (2016). What is pet insurance and what does it cover? Retrieved July 15, 2016 from https://www.farmers.com/inner-circle/home-tool-kit/what-is-pet-insurance/  FranchiseHelp Holdings LLC. (2016). Pet care industry analysis 2016 – Costs and trends. Retrieved May 30, 2016 from https://www.franchisehelp.com/industry-reports/pet-care- industry-report/  Furore, K. (2016). The well-groomed pet. Progressive Grocer, 95(5), 114-116. Retrieved July 23, 2016 from Wilkes University EBSCOhost.  Grant, A. (2012). Veterinarians scramble as retailers jump into pet meds market. Retrieved July 13, 2016 from http://www.cleveland.com/business/index.ssf/2012/01/vets_scramble_as_retailers_jum.html
  30. 30. References  H., M. (2010). Pets allowed: Developing friendly policies. University Business, 13(7), 18. Retrieved July 23, 2016 from Wilkes University EBSCOhost.  Harris, K. (2016). Some companies allow pet bereavement time to employees…should it be mandatory? Retrieved June 30, 2016 from http://iheartdogs.com/some-companies-allow- pet-bereavement-time-to-employees-should-it-be-mandatory/  Hawes, J. (2014). Funeral industry meets growing demand for pet cremation and pet rituals. Retrieved June 5, 2016 from http://www.postandcourier.com/article/20141108/PC1204/141109489/1002/funeral-industry- meets-growing-demand-for-pet-cremation-and-grief-rituals  Hechinger, J. (2005, May 25). Getting into day care is becoming harder for today's dogs. Wall Street Journal - Eastern Edition. pp. A1-A6. Retrieved July 23, 2016 from Wilkes University EBSCOhost: http://search.proquest.com.ezproxy.wilkes.edu/docview/398957569?accountid=62703  Home Away. (n.d.). A guide to pet travel trends. Retrieved July 15, 2016 from http://blog.koa.com/wp-content/uploads/pettraveltrends.pdf
  31. 31. References  Irving Place Capital. (2014). No begging necessary for consumer demand in the pet industry. Retrieved May 15, 2016 from http://www.irvingplacecapital.com/2014/03/18/no- begging-necessary-for-consumer-demand-in-the-pet-industry-pet-supplies-plus-poised-for- major-growth-to-keep-up-with-increasing-demand-for-pet-products/  Kirillova, K., Lee, S., & Lehto, X. (2015). Willingness to travel with pets: A U.S. consumer perspective. Journal Of Quality Assurance In Hospitality & Tourism, 16(1), 24-44. doi:10.1080/1528008X.2015.966296. Retrieved July 18, 2016 from Wilkes University EBSCOhost.  London, K. (n.d.). Eight new dog training trends. Retrieved July 23, 2016 from http://thebark.com/content/eight-new-dog-training-trends  Mantle, S. (2015). Pet industry 2015. Pet Age. Retrieved May 15, 2016 from http://www.petage.com/pet-industry-2015/  Marton, M. (2014). Fashion forward. Pet Age. Retrieved July 24, 2016 from http://www.petage.com/fashion-forward/  Marton, M. (2016). 2016 trends in the pet industry. BlogPaws. Retrieved May 11, 2016 from http://blogpaws.com/executive-blog/2016-trends-in-the-pet-industry/
  32. 32. References  MedicAnimal. (2016). 8 FAQs about different types of dog food. Retrieved June 26, 2016 from https://www.medicanimal.com/8-FAQs-about-different-types-of-dog-food/a/ART111513  Moore, A. (2004). Brush up on your grooming skills. Prevention, 56(8), 176-178. Retrieved July 23, 2016 from Wilkes University EBSCOhost.  Nationwide. (n.d.). Bird & exotic pet insurance. Retrieved August 4, 2016 from http://www.petinsurance.com/birds  North American Pet Health Insurance Association (NAPHIA). (n.d.). The pet health insurance industry in North America. Retrieved July 16, 2016 from https://naphia.org/industry/  Ongoing 'humanization' of pets good for business. (2012). MMR, 29(2), 18. Retrieved July 18, 2016 from Wilkes University EBSCOhost.  Outlook for health-related products is favorable. (2012). MMR, 29(2), 18. Retrieved July 18, 2016 from Wilkes University EBSCOhost.  Pendrill, K. (2016). Boozy canine-friendly menus. Retrieved July 24, 2016 from http://www.trendhunter.com/trends/winged-ox
  33. 33. References  Pet care undergoes humanization. (2016). MMR, 33(6), 71. Retrieved July 18, 2016 from Wilkes University EBSCOhost.  PetCareRx. (2011). Top trends in pet care supplies. Retrieved July 24, 2016 from https://www.petcarerx.com/article/top-trends-in-pet-care-supplies/6  PetDiets. (2016a). Where to buy? Retrieved June 26, 2016 from https://www.petdiets.com/library/pet-foods/marketing  PetDiets. (2016b). Pet foods – Diet types. Retrieved June 26, 2016 from https://www.petdiets.com/library/pet-foods/about  PetSmart Home Office, Inc. (2016a). Dog grooming services. Retrieved July 23, 2016 from http://pets.petsmart.com/services/grooming/dog-grooming- services/?gclid=CIv70LyEi84CFU9Zhgod0vkC_A  PetSmart Home Office, Inc. (2016b). PetSmart training. Retrieved June 5, 2016 from http://pets.petsmart.com/services/dog-training/  PetSmart Corporate (2016c). Company history. Retrieved June 22, 2016 from http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irol-timeline
  34. 34. References  PetSmart Corporate (2016d). Company information. Retrieved June 22, 2016 from http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irol-homeprofile  PetSmart Home Office Inc. (2016e). PetSmart petshotel. Retrieved July 17, 2016 from http://pets.petsmart.com/services/petshotel/  PetSmart Home Office Inc. (2016f). PetSmart doggie day camp. Retrieved June 5, 2016 from http://pets.petsmart.com/services/doggie-day-camp/  Petswelcome.com, Inc. (2016). Pet friendly hotel chains. Retrieved July 16, 2016 from http://hotels.petswelcome.com/chains/  Phillips-Donaldson, D. (2016). Pet food spending in US rises over 350% in past 30 years. Retrieved June 26, 2016 from http://www.petfoodindustry.com/blogs/7-adventures-in-pet- food/post/5864-pet-food-spending-in-us-rises-over-350-in-past-30-years  Profile America. (2006). Kennels and pet boarding. Retrieved July 17, 2016 from http://www.heraldtribune.com/assets/pdf/advtips/IQ_KennelPetBoarding.pdf  Queen, J. (2016). What is the pet industry? Retrieved May 30, 2016 from http://www.wisegeek.net/what-is-the-pet-industry.htm
  35. 35. References  Salerno, K. (2015). Sniffing out the best pet friendly airlines. Retrieved July 16, 2016 from https://www.tripit.com/blog/2015/01/sniffing-out-the-best-pet-friendly-airlines.html  Samuel, L. (2016). 9 human health trends that have gone to the dogs (and cats). Retrieved July 13, 2016 from http://www.pbs.org/newshour/rundown/9-human-health-trends-dogs-and- cats/  Silva, D. (n.d.). Pet supply. Retrieved July 24, 2016 from http://www.sbdcnet.org/small- business-research-reports/pet-supply  Six trends set pace for pet market. (2006). Souvenirs, Gifts, & Novelties, 45(1), 104-111. Retrieved July 18, 2016 from Wilkes University EBSCOhost.  Synchrony Bank. (2016). Veterinary expenses. Retrieved July 16, 2016 from http://www.carecredit.com/vetmed/  Watt Global Media. (2016). Top pet food companies. Retrieved June 25, 2016 from http://www.petfoodindustry.com/directories/211-top-pet-food-companies
  36. 36. References  Wilkerson, F. (2016). What is pet insurance? Retrieved July 15, 2016 from http://www.petmd.com/centers/insurance/evr_what_is_pet_insurance#  Williams, G. (2015). Is pet insurance worth the expense? Retrieved July 15, 2016 from http://money.usnews.com/money/personal-finance/articles/2015/06/11/is-pet-insurance- worth-the-expense  Woo, C. (n.d.). Organics, raw meat, and designer diets: New trends in dog food. The Bark. Retrieved June 25, 2016 from http://thebark.com/content/organics-raw-meat-and-designer- diets-new-trends-dog-food  Young, L., & Gutner, T. (2004). A suite for Fido. Businessweek, (3879), 129. Retrieved July 23, 2016 from Wilkes University EBSCOhost.

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