The Pet Services Industry’s Growth Provides Opportunities to Combine Business with Passion
Even before the American Pet Product Association (APPA) announced the good news—U.S. Pet Industry spending at $66.75 billion—many have been watching with fateful eyes and their dog’s tail wagging at their feet to open up shop in the developing industry. Economic forecasts report robust growth en masse throughout various segments within the industry. For entrepreneurs, however, the most accessible of these segments is undoubtedly food and pet services.
The opportunities to franchise, invest, and open an independent small business are paralleling the industry’s growth as a whole. How do you get involved without acquiring huge capital or graduating from a four-year post-graduate program?
There are many ways of breaking into this growing industry. However, the combination of these two segments is how many companies were able to ride the fiscal tidal wave up. Starting a business in pet services with retail capabilities might be the most straightforward and safest route with the highest return on investment (ROI), but the industry is full of opportunities and career pathways.
Let’s break down the numbers.
U.S. Pet Spending
- 2017 $69.36 Estimated
- 2016 $66.75 Actual
- 2015 $60.28
- 2014 $58.04
- 2013 $55.72
- 2012 $53.33
- 2011 $50.96
- 2010 $48.35
- 2009 $45.53
- 2008 $43.2
Sales in U.S. Market
Industry Segment: Sales
Food $28.23 billion
Supplies/OTC Medicine $14.71 billion
Vet Care $15.95 billion
Live animal purchases $2.1 billion
Pet Services: grooming & boarding $5.76 billion
(Source: American Pet Products Association’s Pet Industry Market Size and Ownership Statistics)
In the U.S., 89.7 million dogs are owned by 60.2 million households according to the APPA. This number has grown steadily over the past thirty years and is not the only number rising.
Collectively, Americans spent $66.75 billion on their dogs, cats, birds, fishes, and any a variety of other animals that people own as pets in 2016. Of course, this was great news for those in the pet industry as this figure surpassed predictions by $4 billion. U.S. spending is expected to spike again next year—projected to close at $69.36 billion, but if the upward momentum continues, this number will close higher than predictions, as it did last year.
So, what is driving this juggernaut force?
Shift in Consumer Demographics
Along with the announcement of the U.S. expenditures, the APPA also reported that a new face was doing the spending. The famous (and sometimes infamous) Millennials are now the primary pet owners in America, as published in a comprehensive consumer report. The findings showed that 35% of national pet ownership falls in the age group that qualifies as millennials—any individual born after 1982. The Generation beat out the boomers by three percentage points.
In the past, the retiring baby boomers were the ones buying and adopting pets. Many boomers sought companionship derived from their pets and cared for them in a different way than the new majority pet owners. Millennials are more experimental in their purchasing—preferring natural pet food formulated without questionable ingredients. The Generation comprises the digital era consumer. They are more inclined to shop on mobile devices which enable them to compare prices in real-time, crave a social and shareable experience while shopping, and are more likely to buy compulsively.
Pet Ownership Still Rising
The National Pet Owners Survey has collected data since 1988. The survey tracks rates that Americans are shifting from Fido being tied up outside to Fido having his own Christmas stocking. When the APPA first started collecting data roughly 56% of American Households owned a pet. Currently, 68% of American Households own a pet. With more pets, come more demands. This is one of the most evident reasons why the industry is developing so hugely.
Pet ownership records are bolstering market trends. With 84.6 million homes, or one in four households stating they own at least one pet, the demand for Wishbones is inevitably going to go up.
The numbers have been steadily rising over the years and there is no indication these numbers are going to drop anytime soon. In fact, many theorize most millennials are more likely to own a cat or dog over having children. “Pets are becoming a replacement for children,” Jean Twenge, a psychology professor at San Diego State University tells the Washington Post. “They’re less expensive,” Twenge says. “You can get one even if you’re not ready to live with someone or get married, and they can still provide companionship.”
Total Number of Pets Owned in the U.S. (millions)
- Bird 20.3
- Cat 94.2
- Dog 89.7
- Horse 7.6
- Freshwater Fish 139.3
- Saltwater Fish 18.8
- Reptile 9.4
- Small Animal 14.0
(Source: American Pet Products 2017-2018 National Pet Owners Survey)
Increased Interest in Natural Food and Healthy Alternatives
An impacting trend labeled ‘humanization’ or ‘premiumization’ is sweeping the marketplace. Many consumers are becoming more conscious of the lifestyle choices they are making. Americans are eating healthier, and as more information comes to light over diet sensitivities like GMOs and gluten intolerance, the demand for alternative consumer options increases.
This trend is carrying over into the pet services and food industry. This is why many pet industry experts explain humanization as the driving force for product innovation. For example, many individuals are discovering their own gluten intolerance and in turn, are taking the same considerations for their pets. It’s no surprise to find that 37% of U.S. sales in the pet food sector is grain-free pet food.
Also reported, 19% of dogs owners and 15% of cat owners are actively seeking out grain free foods. These percentage points will continue to rise as consumers become more immersed in marketing material that focuses on promoting grain-free foods. Notions like dogs eating their wild ancestral diet–free of carbohydrates—are the main aspects promoting grain-free diets.
A survey organized by Packaged Facts—a leading source of market research on consumer good and pet services—found that half of the pet owners surveyed stated a preference for natural and organic pet foods, believing them to be safer than traditional pet food. Around 56% of cat owners and 64% of dog owners consider product safety when making purchases for their pet.
Consumer literacy of food labels is also improving. Many consumers report checking food labels and understanding ingredient lists. This makes the need for consumer guidance essential to compete with online shopping.
Consumer understandings like these invite customers to purchase high-quality products with higher margins.
Top-Selling Natural Pet Products:
- Holistic Food
- Natural Flea and Tick Repellants
- Holistic Grooming products
- Freeze Dried & Raw Food Products
- Toys Made with Natural Fibers
Shifting Parts: Company Mergers and Business Acquisitions
Mars Inc. a company that owns Pedigree, Caesars, and Royal Canin food companies, as well as three veterinary hospital networks, agreed to acquire VCA Inc., who operate the largest chain of Veterinary hospitals in North America. This acquisition is a $9.1 billion deal.
The deal is set to close after the summer and many believe this will bring huge medical positives to the pet care industry. With the procurement, come plans to provide veterinarians with more intensive training to benefit pets across the U.S.
This time last year, another huge merger was occurring and the implications are still being dealt out. Ethos Veterinary Health is currently forming a new company acquiring IVG hospitals, Premier Veterinary Group, Wheat Ridge Animal Hospital, and Veterinary Specialty Hospital. Ethos is known for delivering high quality advanced medicine in various fields like surgery and cardiology. As the technical details are enacted the company believes the merger will build a national model. This model will impact the standard care and business solutions and set a precedent for pet healthcare.
It is possible that merger deals of this magnitude could not have been possible if pet ownership trends showing that Americans not only own more pets but are treating animals more like family. Pet owners are more willing to pay for the health expenses that come with owning a pet.
Rise of Pet Healthcare
A segment that is gaining traction in the industry is pet healthcare. The U.S. pet insurance industry is growing steadily. The growth comes naturally as more pet owners are beginning to see the value of insuring their animals to avoid costly veterinary visits. Companies are now providing the option to buy pet insurance through company plans. According to consumer reports, pet health insurance is the fastest growing optional employee benefit. This indicates that more than likely the 1.4 million pets insured at the end of 2014 will not be alone as more pet insurance sales spike.
Another number that is broadening are the number of veterinarians available. The profession is growing to account for the swelling number of pets in need of medical care. Fueled by student loan repayment programs, the number of vets increased by 78% in the last three decades to keep up with the number of pets in the U.S.
With improved care, inevitably, comes greater longevity for pets—animals are now living longer. According to a 2016 state of Pet Health report from privately owned Banfield Pet Hospital, dogs are now living an average of 11.8 years. Dog’s lifespans are up from 11 years in 2013, and 10.5 years in 2002. There are pros and cons to these findings.
Just like humans, a longer lifespan means more intensive medical attention to combat the ailments that come with aging. Common health issues like arthritis, obesity, and cancer are becoming increasingly prevalent for senior pets. An army of medical professionals are consistently improving veterinary medicine. A new innovation in pet healthcare is the emergence of physical therapy for dogs, specifically hydrotherapy. A rehabilitation center called Water4dogs specializes in hydrotherapy with underwater treadmills, low-level laser therapy, and neuromuscular electrical stimulation.
Most veterinarian programs take four years of post-graduate schooling and the national average salary is between $80,000 and $120,000 a year, according to Glassdoor.
Technology Carving the Way
From the quirky products like CATTERBOX—a translating collar that turns your cat’s meows into human voices—to application-based services like Tagg, a GPS locator that attaches to your dog’s collar, innovative products are proliferating the pet market.
Tagg is not the only GPS navigation device entering the pet services and products market. Garmin has also developed a product line catering to pet parents who are wary of their dog’s barking. The technology includes a ‘bark odometer’ which humanely measures how many times a dog barked while owners are out of the house.
Another pet services app used in dog training is called simply, Pooch. The app is a digital training resource that is convenient for dogs of all training levels. Pooch uses humane training principles to establish a good relationship between dog and pet parent. The company states the app delivers training results fast with positively reinforced behavior modification.
Not only are there huge surges in the innovation behind cool new products, but technology has also opened the doors for online shopping and native marketing to inform and insight consumers on mobile platforms.
Personifying the Pooches
The process of personifying, or anthropomorphizing, meaning to ascribe human attributes to animals, is evident in the myriad of celebrity pets making Forbes lists lately.
The most famous of these celebrity pets is Grumpy Cat—who at one time was just a cat, but is now an internationally recognized brand. This grouchy cat’s face went viral on Reddit and has now evolved into merchandise spanning stuffed animals, T-shirts, postcards, posters, and more. It was a viral sensation on steroids. The internet’s favorite kitty is estimated to have a net worth of over $100 million, marking a now-filled market gap within the pet industry—celebrity pets.
The pet craze has also driven product manufacturers to design products around pet owner pride. Everything from a dough rolling pins to a bumper sticker that announce, ‘Proud Beagle Owner’ are now widely available. These novelty items celebrate the zealous pet parents and of course their pets. This craze marks a pivoting point for dogs being indoctrinated into the American consumer psyche. A survey conducted by Rover stated that 95% of pet owners will buy their dog a Christmas gift, with 61% saying the same for birthdays, and even 11% buying their dogs gifts on Valentine’s Day.
Celebrities like Oprah Winfrey planning to bequest millions of dollars of her inheritance to her dogs is the most glaring evidence of unapologetic pet love. Then there’s media mogul, Ellen DeGeneres, who is also jumping on the spoil-your-pets bandwagon with her pet product line ED. The line premiered in Petsmart with a three-year deal. The line of products features designs Ellen drew herself coating everything from dog beds to dog clothing.
These are the forces driving the growth of the pet industry, but how do you get involved in pet services yourself? How can you make money in this industry?
Let’s explore different segments of the pet industry.
Sectors of Pet Services
Pet Sitting/Dog Walking
If you are the type of person that finds sentimentality in the furrier oriented professions you should consider pet sitting. As a professional pet sitter, you could spend your day playing with your client’s four-legged companions.
When people take vacations and business trips they’re going to need someone to come check-in on the animals. Pet sitters play, feed, brush, medicate, and walk the dogs left in their care. Pet sitters usually offer other lifestyle services too. Many pet sitters clean up accidents, bring in the mail, water plants, take out the trash, and ensure lights are turned off while stopping in to give Fido some much deserved loving.
Pet walkers also make up the segment and are gaining in popularity especially among congested cities like New York where it is nearly impossible to get back to your apartment to let the dog out on a lunch break. Dog walking is a booming business. According to IBISWorld’s market research report, the dog walking industry makes $901 million with a current 3.1% growth rate.
Not bad for a walk with the dog in the park. Popular pet services apps include Rover and Wag!. These apps help pet owners secure a trustworthy dog walker and include employment opportunities.
With almost 90 million dogs in the country, dog training has become a huge source of income for lovers of animal behaviorism. Effective dog training requires half psychology, half people skills. Trainers are not only modifying the dog’s behavior, your teaching the skills to keep the training reinforced by their owners. .
It takes patience, knowledge, and a cordial personality to fully embrace the skill-set for this segment of pet services. There are no official statistics on the number of professional dog trainers because of loose regulations—dog trainers are not licensed. A dog trainer can contact the Association of Professional Dog Training (APDT) for certification. The APDT is around 5,000 members strong. The organization focuses on humane efforts in training backed by scientific research of domestic dog behavior in the specialized industry. From here, a dog trainer can find a job at local training schools, shelters, or a small training business.
Breaking into this sector as a self-employed dog trainer will require rogue marketing and building community clout. Prospect dog trainers can begin by building a resume based on their dog training experience credentials. A thorough list of references—initial satisfied clients—will be essential to building a clientele base to sustain self-employment.
According to the U.S. Bureau of Labor Statistics, the mean salary for a dog trainer is $33,600 with higher paid trainers earning around $57,170.
Many have found huge joy in working in the pet grooming industry as a pet stylist, or put mundanely a groomer. From an outside perspective, it might seem frivolous but many groomers view themselves as an artist and have the numbers to back it. Last year the grooming segment made $6.11 billion. Of course, groomers follow this career path for more than the monetary gains.
The roughly 70,000 pet groomers in America provide physical and emotional care for their clients. A reputable groomer does a health and wellness check of every animal they handle to safeguard preventative measures against any medical issues. This helps save pet owners thousands in annual veterinary bills. Groomers are the first line of defense against skin conditions, flea and ticks, and other medical issues that need to be brought to the attention of a pet owner.
Grooming is an affectionate and rewarding pathway that delves into a true love for animals. Groomers need to be able to physically lift pets of all sizes onto grooming tables and tubs. Imagine lifting a 200 lbs English Mastiff in need of a scrubbing. Not to mention groomers also need to be attuned to emotional responses of animals. Groomers should be wary of biters and scratchers. They will often need to soothingly coax dogs into feeling comfortable enough to relax into the grooming process.
The demand for pet groomers rose 12% after the recession years and has been rising since. Career opportunities are seemingly infinite in this career field as more pets are owned within the country continually widening market opportunities.
Food and Pet Supply Retail
Both brick-and-mortar sales floors and virtual pet food shopping websites specialize in providing pet food—which comprises 42% of total U.S. spending on pets in the U.S. market. More than ever, pet owners are willing to pay top dollars to provide the most high-quality options for their four-legged child. This makes entering the pet food schematic a very profitable move that enables retailers to provide both expensive healthy options and lower-quality items. It is important to provide a variety of options that cover all consumer price points.
Owning a small business—whether virtual or brick-and-mortar—requires identifying a niche that will give you a vantage point over competitive businesses. You will want to position yourself as a leader in this segment for providing these particular items like holistic dog treats.
There are countless options in pet food inventory choices. Human-grade pet food, specialty foods for diabetic or overweight pets, raw-food, freeze dried foods, and a variety of feeds for livestock and exotic pets make up the huge array of niches to explore. Many specialty pet retail shops are offering treats made in bakeries. These dog biscuits are typically all natural and baked locally. Pet retail extends into the pet supplies outside of food that many retailers offer. Items like collars, leashes, and grooming products should all be considered. Discerning whether to carry pet supply products depends on how much you are willing to invest and if you have the means to store products before being shipped out or placed on a sales floor.
According to IBISWorld, there are presently 17,714 pet stores in the country with an annual growth rate of 2.7%. As the industry grows so do the individual segments that are meeting the demand and needs of pet ownership.
Upscale Pet Services & Products
A trip to the dog park isn’t the same as it was two years ago. Many pet owners are stepping up their pamper game and putting their pooches in luxury strollers. The fad doesn’t stop here. Pet parents buying lavish and indulgent commodities is popularizing across the nation. Extravagant purchases from designer bags made by Louis Vuitton to a $700 doggie birthday party complete with champagne and a D.J. on the Upper East side of Manhattan are more commonplace these days. (At least for the ultra rich).
For those interested in the ultra-premium product lines the same rules apply. There are two methods of approach. The first is specialty brick-and-mortar retail and the latter is operating a digital outlet. Opening a retail store requires a lot of research into consumer demographics in the area. You will want to secure a clientele base that is going to be interested in the upscale products your shop will feature. These products should be exclusive.
This means extensive research and networking to secure a product line that is unique and in demand. Taking this approach makes finding a location that is in an affluent shopping district like Rodeo Drive or the Soho neighborhood of New York essential. Rent prices in locations like these are going to be expensive. Yet the location is worth the price when it grants you access to shoppers with disposable income searching for rhinestone lined tiaras for their Pomeranian. These are the hyperbolic examples, but you get the picture.
Where to Start?
This is the most important decision entrepreneurs face when launching into a new endeavor. What drives you? What brings out your passion? It will take passion fueled ambition to pursue a business venture through the inevitable snags of business and into successful territory.
Let’s say for example you choose to open an independent pet grooming business and intuitively recognize that you can use extra space in the store for retail opportunities. You will offer both pet services and products. Great start!
You need to inventory your net worth and liquid assets. Organizing your assets will help you find a price range for allotted investment. You can also look into getting a small business loan from the small business administration. You may also want to consider hiring or seeking the guidance of a certified personal accountant to help maintain your finances until you start receiving a return on your investment.
Next, you need to secure a location. Your search should be determined by three criteria points. First, are there local businesses around the location that are already driving foot traffic to this area? The shop location should be in a strip mall or other area with high visibility. Second, what permits and licensing does this area require for animal kenneling and grooming? Depending on your county, or state, you will have to fill out the appropriate applications to receive permits and licenses. Finally, you will need to make sure the location has adequate space, plumbing, and infrastructure to host grooming.
Once you have secured a location you will need to hire a contractor and start your build-out. Ask around a home supplies store, search Angie’s List, or Craigslist to start finding a distinguished contractor with the team that can do your shop’s build-out within your budget and timeline.
Building a Team
You will need to hire a dog groomer with the proper licensing or certification required by your area. You will also need to hire a salesperson to work the counter and sales floor. As your business expands you will need to hire more employees and management as needed.
Back Office Logistics
Small business owners will need to organize their back office structures like accounting, buying a point of sales system, and purchasing an initial stock order. You will also need to write training manuals and establish a brand.
Prior to your grand opening and going forward you will need to establish a marketing plan. Before opening, you will definitely want to advertise to the local community through marketing using digital platforms like email campaigning, signage, and social media. As you expand you will want to innovate marketing material and dissemination methods to stay competitive.
This just scratches the iceberg of the work a small business owner must do before even opening. The workload will be immense but if you have chosen a field of your interest and passion, the reward will be the challenge itself.
Another option future small business owners can research is franchising. Many entrepreneurs choose to partner with a franchise because many of the time-consuming elements of the business are already fine-tuned in a proven market. For example, a franchise concept offers training, support, access to proprietary software, and an established brand, just to list a few advantages.
Franchising offers the stability of investing with a calculated risk over gambles of independent business.
Finding the right franchise is like finding the right car—it must be congruent with your needs. Company culture, brand, capacities for support, pricing, and most importantly goals for the company all need to be taken into consideration before you invest in a franchise. Evaluate what you want out your small business and see if this aligns with the goals of the franchisor? If you see strong parallels then you’re off to a good start.
Splash and Dash Groomerie & Boutique wishes all entrepreneurs luck with embracing the booming pet services industry, and as always, Play Dirty. Live Clean!
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