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In America, pets are big business. In fact, according to the American Pet Products Association (APPA), 65 percent of U.S. households, or almost 80 million families, own a pet.
This figure is 22.7 million more than it was in 1988, the first year the survey was conducted. It’s clear America’s love affair with pets is strong, and growing stronger.
Most prefer dogs, by a margin of almost 12 percent, but cats aren’t far behind. In fact, remove percentages and actual ownership involves 85.8 million cats versus 77.8 million dogs. This is because people who own cats often own two or more, while dog owners typically own one – especially if it is a large dog.
People are also, and increasingly, turning to fish (12.3 percent), birds (6.1 percent), small animals (5.4 percent), and even reptiles, especially lizards, which are no longer seen as cold, uncaring, indifferent creatures but ones with personalities as distinct as those of cats and dogs.
The same is true of snakes and, yes, even tarantulas. Nothing seems to escape our love and fascination with the other members of earth.
Pet Ownership Translated into Dollars
In 2006, Americans spent $38.5 billion on pets, pet care, and pet sitting or grooming establishments. This is the same amount that the Federal government spent on education during that year.
By 2015, that figure had risen to $60.59 billion, with the lion’s share going toward veterinary surgical care. The next largest category covered food. Third were routine vet visits, and fourth were boarding facilities.
Food treats came in at about 25 percent of the actual food total – $269, in the case of dogs (with cats only $20 million behind).The smallest amount, a miserly $28-47 million, was reportedly spent on toys – a figure that seems almost fictional knowing how much doting pet owners spend on their “fur people”.
Pet Ownership, By Age and Sector
When the Great Recession (2007-2009) struck, Americans tightened the purse strings. Retail sales fell, as did sales of vehicle fuel, fast food, vacations, and major appliances.
Pet spending did not, proving yet again that a pet business is good business. This willingness to spend on fur people is very much evident among homeowners, who spend about three times as much as renters. An even better demographic for pet product and service sales is among married couples without children. Whether new nesters or empty nesters, this group spent the most on their pets.
This is also the group, or demographic, that sees their pets as “family” (by a 63.2- percent margin), as opposed to those who see their pets as companion animals (35.8 percent). These are the pet lovers who go online and refer to a beloved animal as “my baby”, or “my kid”.
Millennials Taking over the Industry
The most promising group of pet-product consumers are Millennials, the 18-34-year-old segment, who have seen their futures shrunk to the size of a corporate cubicle and an efficiency apartment. Millennial singles often see pets as their only recourse to companionship: relationships are too difficult to sustain, and marriage is economically hazardous.
For married Millennials, pets serve the same purpose, only more so. Compared to other pet owners, notes consumer marketing agency Packaged Facts in their National Pet Owner Survey, many Millennials seem to regard their pets as surrogate children, and pet ownership as a good way to practice for that “real” family.
Thus, as the Boomers decline in both health and prospects and give up their pets, expect Millennials to take over the pet industry. Because this demographic is inclined to splurge on their pets – sometimes even to the extent of foregoing personal purchases – entrepreneurs can also expect rapid and enthusiastic uptake of fads, fashion accessories, feeding and watering devices, treats, carrying cases, cat stands, pillow beds, healthful foods and, most notably, electronic apps that allow owners to keep track of a pet’s health and safety.
Entrepreneurs planning on starting a pet business would do best to focus on this demographic when it comes to advertising and social media (try Snapchat and Instagram, as well as the old faithful apps like Facebook and Twitter). Product focus should be on innovative designs and technologically advanced tracking and monitoring devices.
But a good, old-fashioned dog walking service, or a 21st century Sherpa tent designed for dogs and hot summer nights, would likely be successful, too. Just focus on the right market and make sure you consult the VA Law & Business Review to make sure you and the IRS are on the same page, legally speaking.