Expert Conversations: Key Drivers in the Pet Care and Animal Health industry
Welcome to “Expert Conversations,” a column featuring expert advice from the people on all sides of the marketing equation. In this series, we’ll interview experts from inside and outside the agency/client world to gain new perspectives on what marketers can do better, what they already do effectively, and what it takes to connect to an audience, regardless of industry.
This month, we talked to our own Tom Apple about key drivers in the pet care and animal health industries. Animals are a vital part of our society, whether it’s pets (dogs, cats, horses, birds, etc.) or livestock raised to help feed the world. In either case, their owners are responsible for caring for the health of these animals. This is the foundation of the pet and animal health care products industry. Here, Tom discusses companion animal trends, specifically dogs and cats.
Over the last several years, the pet craze in the U.S. has resulted in booming sales of health care products for companion animals. Do you see this trend continuing? Is there room for even more growth?
Absolutely. Companion animals have been driving industry sales, and that’s a trend that will continue for the foreseeable future. According to Sundale Research, companion animals’ share of total industry sales rose to 57.5 percent in 2016, up from 56.0 percent in 2011 and 48.0 percent in 2000. Through 2021, companion animals will account for an increasing share of pet and animal health care product sales in the U.S. Sundale also states that the cat population in the U.S. increased by 1.7 percent to 97.7 million in 2016. 43.9 million households owned a cat in 2016.
Meanwhile, the dog population is also increasing. Going back to Sundale’s research, the dog population in the U.S. increased by 1.7 percent to 83.5 million in 2016, with 48.4 million households owning at least one dog.
Long answer short: More cats and dogs equals more cat and dog owners equals continued growth in our industry.
What are some of the key drivers of industry growth?
There are a number of factors, but a few rise to the top:
- The humanization of pets
- Obesity and aging pets
- Baby boomers and millennials are caring more
- Economy
Are “pet parents” really that important?
Definitely. Pet owners humanize their pets more and more every year, and that trend has a direct impact on industry sales. Since we treat our pets like they are our children, we want the best products for them. That includes food, supplies, medicine…even toys. The highest-quality nutrition, healthcare, and preventative maintenance for pets generally lead to longer and healthier lives.
Obese pets and longer life expectancy seem to be at odds with one another. Can you elaborate?
They’re separate issues, but in the same dog park. Though there are more obese pets out there, the desire to slim them down helps raise sales of healthier products, and that goes hand-in-hand with those pet parents who are already health-conscious. According to the Association for Pet Obesity Prevention, 54 percent of dogs and 59 percent of cats were either obese or overweight in 2016.
Obese pets have serious health issues and shortened life spans. But pet owners care more than ever, so sales of pet food, products, and services that promote healthy living should outpace overall industry sales over the next several years.
On the flip side, pets are living longer because they quite simply get better care and attention from their owners. Longer life spans are also strengthening emotional bonds between humans and pets, increasing the willingness of pet owners to ensure a long and healthy life.
Is “health food” for pets really a thing?
Yep! Just like with human food, the pet food industry continues to be fueled by the trend toward healthy and premium foods and treats. Pet owners are concerned about transparency, traceability and sustainability. Non-GMO, grain-free, organic and natural are things that they want.
Does the fluctuating economy affect this industry as much as others?
Cost savings are always important for pet products. According to Packaged Facts, roughly half of pet owners feel that they are spending more than they used to on pet products. However, between 2011 and 2015, the percentage of pet owners who feel that pet products are becoming too expensive dropped from 74 to 64 percent. This tells us that they’re not shy about products with a higher price-tag. But as we all know, cost is a consideration and always will be, which is why the vast majority (71 percent) still seek out lower prices.
How do different generations of consumers impact sales?
Baby boomers are always important to the pet industry, and they’ll continue to be a driving factor based on the sheer size of the population, and they’re also trending toward excessive pet-pampering that younger generations are known for.
Meanwhile, APPA’s 2017-2018 National Pet Owners Survey shows that millennial pet ownership has officially surpassed baby-boomer ownership by three percentage points to now account for 35 percent of all pet owners. Millennials are putting off getting married and having children until much later than older cohorts, and it seems that their four-legged companions are filling the gap. How millennial pet ownership impacts pet products sales now and in the future is a whole other blog post.
How are internet sales growing in importance?
Another trend in pet food sales is the increasing growth through distributors like Chewy.com and Amazon.com. With smartphones and online connectivity ubiquitous in increasing numbers of markets, internet retailing continues to grow in importance as a distribution channel in pet care. The internet simply makes it easier to leapfrog bricks-and-mortar retailers and reach consumers directly, no matter how big a company you are.
TOM APPLE
VP, Business Development
Reference/Sources:
- State of the Industry: Pet and Animal Health Care Products in the U.S. Sundale Research, 2017