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U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in
Challenging Economic Times
March 1, 2009
During the current macroeconomic environment the much touted recession resistance
of the pet industry is being put to the test like never before—and appearing to hold up
as of March 2009. Whereas total U.S. retail sales rose just 1.4% overall in 2008
according to the National Retail Federation, No. 1 pet specialty retailer PetSmart posted
an 8.4% sales increase in fiscal year 2008; top five pet food marketers Del Monte and
Hill’s recently reported double-digit growth, with Del Monte’s pet product net sales up
15.1% during the third quarter of fiscal year 2009 (ending May 3), and Hill’s revenues up
13.5% in fourth-quarter calendar 2008; leading veterinary hospital operator VCA Antech
posted 6.7% revenues growth during fourth-quarter 2008; and online merchant PetMed
Express reported a 16% increase in net sales during the fourth-quarter 2008. Looking at
the pet industry as a whole, Packaged Facts predicts overall steady performance in
2009 and 2010, although the market growth rate will drop back slightly due to cutbacks
in some of the more discretionary categories.
Featuring February 2009 pet owner survey data polling 2,600 U.S. adults, this all-new
Packaged Facts trend report will bring you up to the minute with regard to the four core
market categories—veterinary services, pet food, non-food pet supplies, and other pet
services (grooming, boarding, training, etc.)—projecting sales and analyzing key growth
drivers and competitive opportunities for each. The report is divided into five chapters,
beginning with an Overview examining why the pet industry has been performing better
than other industries of comparable size and maturity, and what marketers, retailers and
product developers can do to help keep their own market momentum going. Four
additional chapters examine ongoing and emerging trends in four focus areas—
Humanization, Health and Wellness, Competition, and Demographics—covering such
topics as the multifaceted notion of value during the recession; impact of the
human/animal bond on consumer expenditures; adaptation of human brands, drugs and
service types; natural, organic and green products; functional products including pet
medications and supplements; impact of the fast-growth pet insurance industry; effect of
big-box expansion and franchising in the pet services field; the rise of celebrity
marketing, non-traditional media, and cause marketing; and pet ownership trends in key
consumer segments including premium demographics, aging Baby Boomers and
PONKS (Pet Owners/No Kids).

2. Read an excerpt from this report below.
About the Author
David Lummis is the senior pet market analyst for Packaged Facts. He is also author of
the monthly "Market Outlook" column in Pet Product News International, and a regular
contributor of articles and market insight to other pet industry magazines as well as
major business media including The New York Times and CNNMoney. Mr. Lummis also
is President of New Orleans-based Marigny Research Group, Inc., a producer of
custom market research reports for Packaged Facts. Since 1986, MRG has prepared
more than 175 studies on consumer packaged goods markets and developed full report
lines covering pet, demographic, retail and financial markets. Mr. Lummis, who
graduated from Yale University, has also written approximately 75 other published B2B
reports and is the author of the book, "Value Retailing in the 1990s."
Additional Information
Market Insights: A Selection From The Report
Natural/Organic/Holistic Products
In the minds of most of the pet owners who purchase them, natural and organic
products have always been associated with enhanced pet health and wellness, but the
devastating recalls of spring 2007 appear to have cemented this association. Illustrating
the impact of the recall on sales of natural pet products, natural supermarket pet
department sales surged 18% in the first week of April vs. the last week of March 2007
and by a total of 22% during 2007, according to Packaged Facts’ August 2008 report,
Natural Supermarket Pet Department Close-Up.
Although food represents the bulk of natural supermarket sales, the safety-related
appeal of natural products also resonates in ingestible non-food categories such as
supplements and chews, topical product categories like flea/tick spot-ons and
shampoos, and even commodity categories like litter, where alternatives to traditional
clay-based litter have been leading market growth for several years.
The strong showing for pet food overall in 2007 and 2008 also reflects the switch to
higher-priced products including natural and organic varieties, according to Packaged
Facts’ January 2009 report, Pet Food in the U.S. (see Chapter 1, “Economy, Value and
Recession Resistance”) [Figure 3-1]
Specialty and Functional Food Formulas on the Ups

3. Specialty formula foods for dogs and cats are well established in the market, with 72%
of dog owners and 76% of cat owners having purchased these products in the last three
months, according to Packaged Facts’ February 2009 pet owner poll. Adult formulas are
the most commonly chosen, with 33% of dog owners and 32% of cat owners having
purchased these types of foods in the past three months, followed by other types
including organic, puppy or kitten, weight-related, and senior. [Figure 3-3]
TABLE OF CONTENTS
Chapter 1: Introduction
Scope of Report
Report Methodology
Overview
Economy, Value and Recession Resistance
Pet Humanization
Table 1-1: Percent of Pet Owners Who Anticipate Spending Less on Pet
Food/Supplies or Pet Services in Next 12 Months, February 2009
Premium Demographics
Pet Market Momentum
High Rates of Value-Added Product Entries
Table 1-2: Number of New Pet Product Introductions: Reports and SKUs, 2005-
2009
Table 1-3: Top 20 Marketing Claims by Number of New Pet Product Reports,
2008
Pet Care Services Also Going Strong
International Cross-Pollination
Illustration 1-1: Nestlé Purina’s Friskies Flea Repellent Drops (France)
A $57 Billion Market by 2010
Table 1-4: U.S. Pet Market Retail Sales by Category: 2009 and 2010 (in billions
of dollars)
Table 1-5: U.S. Pet Market Compound Annual Growth Rates: 2004-2008 vs.
2008-2013 (percent)
Chapter 2: Humanization
More Than a Trend
A Three-Pronged Movement
Human/Animal Bond
Figure 2-1: “Consider My Pet(s) Part of the Family”: By Percent of Pet, Dog/Cat,
Dog and Cat Owners, February 2009
Table 2-1: Mean Number of Veterinary Visits: By Human/Animal Bond Among
Dog and Cat Households, 2006
Table 2-2: Mean Veterinary Expenditures: By Human/Animal Bond Among Dog
and Cat Households, 2006 (in dollars)
Human Company Cross-Over

4. Illustration 2-1: Jakks Pacific’s White Bites Oral Care Dog Treats with Arm &
Hammer Baking Soda
Illustration 2-2: Bissell Website Banner for New Pet Lovers Products Collection
Illustration 2-3: Consumer Advertising for Procter & Gamble’s New Febreze Pet
Odor Eliminator Extensions
Human-Style Product/Service Cross-Over
Illustration 2-4: Consumer Advertising for Dr. Harvey’s Handmade Biscotti for
Dogs
Illustration 2-5: Trade Advertising for Bamboo’s New CatToids and DogToids
Breath Mints
Illustration 2-6: Trade Advertising for Spa Lavish Your Pet’s Botanical Grooming
Collections
A Societal Shift
Chapter 3: Health and Wellness
The Ultimate Value Appeal
Natural/Organic/Holistic Products
Figure 3-1: Seasonal Pattern of Pet Product Sales in the Natural Supermarket
Channel: January 2005-December 2007 (in dollars)
Table 3-1: Percent of Pet Owners Who Purchased Natural/Organic Pet Products
in Last 3 Months: Dog Owners vs. Cat Owners, February 2009 (percent of U.S.
dog or cat owners)
Table 3-2: Percent of Pet Owners Who Would Buy More Natural/Organic Pet
Products If They Were More Available or More Affordable, February 2009
(percent of U.S. dog or cat owners)
Figure 3-2: U.S. Retail Sales of Natural and Organic Pet Products: 2003, 2007
and 2012 (in millions of dollars)
Functional Products
Specialty and Functional Food Formulas on the Ups
Figure 3-3: Percent of Pet Owners Who Purchased Specialty Formula Dog or Cat
Food in Last 3 Months: Dog Owners vs. Cat Owners, February 2009 (percent of
U.S. dog or cat owners)
Table 3-3: Household Purchasing of Light/Weight Management and Senior Dry
and Canned Dog and Cat Food: 2004 vs. 2008 (percent of U.S. households with
dogs or cats)
Pet Supplements and Nutraceutical Treats Going Strong
Figure 3-4: U.S. Retail Sales of Pet Supplements and Nutraceutical Treats: 2003,
2007 and 2012 (in millions of dollars)
U.S. Pet Medications Posting Healthy Retail Sales
Figure 3-5: U.S. Retail Sales of Pet Medications: 2003, 2007 and 2012 (in billions
of dollars)
Holistic Labeling
Pet Services Riding Pet Health Wave
Figure 3-6: Percentage of Dogs and Cats Age 6 and Over: 1996 vs. 2006
Complimentary/Holistic Pet Care
Figure 3-7: Attitudes About Alternative/Self-Care: Dog and Cat Owners, 2008
(index)

5. The Pet Insurance Boom
Ethical/Green Interest, Appeals
Figure 3-8: Dog or Cat Owners as Consumers: Selected “Green”
Psychographics, 2008 (percent and index for U.S. dog or cat owners)
Chapter 4: Competition
Overview/Market Structure
Veterinary Services to the Fore
Figure 4-1: Percent of Dog Owners Who Used Pet Services in Last 12 Months:
February 2009
Figure 4-2: Percentage Share of U.S. Pet Market Retail Sales by Category: 2004,
2008 and 2013
Food and Non-Food Supplies Coming Together
One-Stop Pet Care
Figure 4-3: PetSmart and Petco: Share of Pet Grooming, Boarding and Training
Sales: 2000, 2005 and 2010 (percent)
A New Mid-Sized National Chain?
Additional Market Consolidation
Table 4-1: PetSmart and Petco Combined Sales: 2000-2008 (in millions of
dollars)
Table 4-2: Timeline of U.S. Pet Product Marketer and Brand Acquisitions and
Sales: 2001-2009
Franchising Altering Pet Services Terrain
Celebrity Marketing
Media Trends
Non-Traditional Media
Figure 4-4: Dog or Cat Owners as Consumers: Selected Media & Marketing
Psychographics, 2008 (percent and index for U.S. dog or cat owners)
Value Focused Advertising
Illustration 4-1: Email Coupon for S.C. Johnson & Son’s New Pledge Fabric
Sweeper for Pet Hair
Illustration 4-2: Petco Coupon Mailer Featuring Halo Purely for Pets
Emotional Messaging
Cause-Related Marketing
Retail Trends
Table 4-3: Household Purchasing of Pet Products by Retail Channel: Total
Purchasers and Sole Purchasers, 2006 vs. 2008 (percent of U.S. households
with pets)
Table 4-4: Percent of Pet Owners Who Do or Do Not Anticipate Spending Less
on Pet Foods/Supplies in the Next 12 Months: By Retail Channel Always or Often
Shopped, February 2009
Table 4-5: Indices for Spending Level Expectations for Pet Food/Supplies in the
Next 12 Months: By Retail Channel Always or Often Shopped for Pet Products,
February 2009
Table 4-6: Percent of Pet Owners Who Purchase Pet Food/Supplies by Retail
Channel: Always, Often, Occasionally, February 2009 (percent of U.S. pet
owners)

6. Refrigerated Pet Food
Frozen/Raw Pet Food
More Robust Pet Health Departments
Natural Supermarkets and Pet Stores
Mainstream Supermarkets Going Natural/Organic/Eco-Friendly
Compact Supermarkets
Walmart Capitalizing on Recession
Agricultural Channel Action
Increasing Private-Label Penetration
Figure 4-5: Attitudes About Healthcare Brands: Dog and Cat Owners vs. U.S.
Adults Overall, 2008 (percent)
Independent Pet Shop/Boutique Trends
Internet Potential
Figure 4-6: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners,
2008 (index for U.S. dog or cat owners)
Chapter 5: Consumer Demographics
Number of Dog and Cat Households Trending Upward
Figure 5-1: Household Penetration Rates for Selected Dog- or Cat-Owning
Classifications: 2003 vs. 2008 (percent of U.S. dog- or cat-owning households)
Premium Demographics
Figure 5-2: Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K
Income Brackets, 1997-2007 (percent)
Figure 5-3: Share of U.S. Pet Market Expenditures by Category: $70K+ Income
Bracket Households, 1997 vs. 2007 (percent)
The Boomer Factor
Figure 5-4: Dog or Cat Ownership Rates by Age Bracket: 2003 vs. 2008 (percent
of U.S. households)
Figure 5-5: Share of Total U.S. Population Growth for Selected Age Brackets:
2007-2015 (percent)
PONK (Pet Owner/No-Kid) Clout
Figure 5-6: Two-Adult Households/No Kids as Pet Owners: 2003 vs. 2008
(percent)
Ethnic Energy
Illustration 5-1: President Obama Promoting Shelter Adoption on the Cover of
Tails Magazine, February 2009
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