Why You Can’t Go Wrong with the Pet Industry
The pet industry has been expanding at an exciting growth rate for the past three decades. Last year in 2016, pet owner spending clocked in at $66.75 billion. Fueled by over 68%—84.6 million U.S. homes—the industry is growing to meet the demand of pet parents eager to spoil their two-legged children. Most of the expansion has been in upscale sectors. Pet pampering now comes in the form of products like chia seed dog treats or services like ‘pawdicures’ for your dog. Take a stroll through your local park. Many of those strollers actually have little puppers lounging in the basket, not a human child!
Now, more than ever, people are completely obsessed with their pets. A glimpse into recent pop culture shows how much pets have become the forefront of the American zeitgeist. One in 10 pets has their own social media account nationwide, according to a market research agency Mintel. Consumers can count on at least one blockbuster pet-movie each season. Last year, Secret Life of Pets and A Dog’s Purpose both premiered on the big screen. Alpha, a movie centering around the first instance of domestication, is set to come out in March of next year. If that isn’t evidence enough, just think, Oprah Winfrey is bequesting her dogs with $30 million with a sizable portion of her estate reserved just for them.
At Splash and Dash Groomerie & Boutique we totally get and embrace pet obsession. Our franchise owners are pet people that loved their dogs so much they built a business around them. Splash and Dash started when Dan J. Barton, Founder & CEO, wanted something better for his pup, Mercedes. After being fed up with impersonal big-box stores that charged way too much, Dan discovered there was something missing in the pet industry: a market gap for a tech-savvy grooming salon that also sells retail pet supplies. Dan took it one step further. He introduced a recurring revenue stream with a membership plan—something completely unique to Splash and Dash. Since then, the pet franchise has gone on to rank #59 on Entrepreneur’s 500 Listing and help countless individuals find an amazing place in the pet industry.
The Pet Industry is Growing!
In the past three decades, consumers have spent more money on pets every year since the APPA began tracking expenditures. During the Great U.S. Recession, the pet industry grew almost 11% from 2007 to 2009. Other industries like cosmetics, car-repossession, and health care share the recession-proof durability that the pet industry maintains. After the recession, the financial growth didn’t stop. The same percentage increase took place between 2015 and this year, from $60.28 to $66.75 billion.
The bulk of pet owner spending is on food. Almost $30 billion dollars are expected to be spent on food this year with last year ending at $28.23 billion. Even pet supplies are being purchased more. Over-the-counter pet products like dog toothpaste experienced a 73% increase after the new millennium. In 2001, pet owners spent $2.1 billion on over-the-counter products. At the end of 2017, spending is projected at $14.93 billion. That’s over a 610% increase! Premiumization trends and healthier options for pet owners’ dogs are pushing these numbers skyward. On average, the first year someone owns a small dog, their new pooch will cost $1,314. A medium dog will cost his owner $1,580 while a large dog can cost up to $1,843, according to the ASPCA.
Yes, the rate of pet ownership is rising but only slightly. In the past three years, pet ownership rose only 3% each year. This suggests that an increasing average mean spending is the reason the pet industry is growing, not more people owning pets.
Pets are Part of the Family
Recent census surveys show that more than two out of three Americans own a pet. This has been the case for a long time, with dogs being the crux of our animal companionship since we first domesticated them over 12,000 years ago. In the last few decades, dogs have formed even stronger bonds with their guardians. Dogs have transitioned from being tethered outside in the doghouse to being the center of attention.
Aging boomers whose children have left the house often get a dog to keep them company in retirement. On top of this, a low overall fertility rate in the U.S. translates into more no-children households with a higher rate of pet ownership. Single households are also on the rise at 28% from 1970 to 2014. With a competitive job market and the inhibition of student loans, many millennials are waiting to get married and have children. Millennials have also replaced their boomer parents as the primary pet owners in the U.S. with a much different approach to spending than their frugal parents. Millennials look for an experience in retail shopping. The demographic is a much more spontaneous and experimental shopper. They are also more health conscious and want the absolute best for their dogs. Eco-friendliness, all-natural, and Made in America are the product orientations that resonate with Millennials. A recent Suntrust Mortgage survey showed that one-third of Millennials are buying houses, stating that their dog was the most compelling reason to sign a mortgage.
These societal trends are continuing to catapult the pet industry into new heights. Many dog-loving entrepreneurs are looking for points of entry to get in on the proverbial action.
For interesting ideas of breaking into the pet industry click here!
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