RESEARCH - Millennials and Boomers Lead the Pack in Pet Spending

Sales and marketing company Acosta did some research on the growing pet industry, looking not only at pet spending but also consumer behaviour.

“The pet category is an important one, as its total sales surpass popular categories such as dairy and candy,” Colin Stewart, Senior Vice President at Acosta, said in a release.

“Fortunately for brands and retailers, the two largest generations — Baby Boomers and Millennials — also represent the two biggest age groups for pet ownership, which means we can expect continued growth in this category, especially since Millennials are just now entering their prime spending years.”

According to the report, nearly half of pet owners remain loyal to their preferred brand of pet food, regardless of coupons or deals, but they do take advantage of digital tools such as retailer websites or apps to search for sales.

Ninety-four percent of pet owners indicate their pets are part of the family, with 80 percent treating them like children, which makes the report - The Pet Parenting Boom - aptly named.

When it comes to spending for pet owners, the well-being of their animals plays an important role, but so does their own definition of necessities.

Boomers consider toys and treats nonessentials, while Millennials — who are more likely to splurge on pet fashion — label them as necessities.

• Forty-six percent of pet owners report they purchase products they think will provide a wellness benefit to their pets.
• Thirty-six percent of pet owners spend more than $500 annually on pet medical expenses and $200 per year on regular grooming.
• Sixty percent of Millennials purchase nonessential pet items at least once a week, versus 28 percent of Gen Xers and 8 percent of Boomers.
• Sixty percent of pet owners report celebrating their pets’ birthdays in some fashion, which for more than half of Millennial and 40 percent of Gen X pet owners means giving their animals birthday gifts.

“Pet owners shop for their animals much in the same way they shop for themselves,” added Stewart.

“Retailers can apply key best practices in grocery to the retail pet channel as well, including appealing to Millennials, emphasizing health and wellness, and improving convenience to increase shopper loyalty.”

Nearly 80 million households in the U.S. own a pet, representing 60 percent of the entire population.

BUSINESS - Stores Expand as Pet Industry Grows

Petco is expanding their retail presence having opened five new stores in July and done extensive renovation to 13 Seattle locations.

The Seattle market makeover and new store openings are part of the company's overall goal to significantly expand its national footprint by the end of the year.

At the same time, Pet Supplies Plus has signed 20 deals across the country resulting in 55 new stores this year.

Pet Supplies Plus is the leading pet franchise chain in the U.S. with a total of 360 stores.

Why the expansion and renovation in such a short time?

It’s simple - pet industry spending continues to rise.

The American Pet Products Association (APPA) reported total spending of $60.28 billion in 2015 and is projecting an increase to $62.75 billion this year.

“The steady growth of the pet industry is credited to cognizant pet owners looking for natural products for their pets and an increase in the amount of households with pets, which is now roughly 75 percent of the country. Pet Supplies Plus’ growth is exceeding that of the industry and on track to open 55 locations this year, a record year for the company,” David Leonardo, senior vice president for franchising at Pet Supplies Plus, said in a release.

The pet industry appears to be one of the most recession-resistant. As people cut back household expenses they still want to provide the best to their animal companions.

Since 1994, the industry has grown every year by at least $1 billion, according to the APPA. From 2006 to 2011, the industry grew by 32 percent.

As reported in InfoStream in July, PetSmart, the largest specialty pet retailer in North America, is also growing by 80 stores this fiscal year.

It’s interesting that more stores are being built when there is such a shift to online purchasing in general.

However, Petco is including services such as a grooming salon, dog training area and in-store Vetco clinics in the new Wellness Centers and mobile clinics that cannot be provided online.

And Pet Supplies Plus will be launching its own e-commerce capabilities in 2017.

Pet Spending soars in Canada

Canadian pet owners are spending more money on luxury for their pets than ever before, according to a recent report published by Packaged Facts. 

The report shows many Canadians overlooking the high cost of premium retail products, which have fuelled much of the growth in the Canadian pet market, when it comes for their furry friends. Packaged Facts' proprietary survey of Canadian pet owners shows that the vast majority of pet owners are wiling to spend more on products that support the health and happiness of their pets. Another trend continuing to gain steam is the market emphasis on natural products as evidenced by companies ranging from Purina to Hill's Science Diet to Walmart focusing on natural products. 

For more information, visit PACKAGED FACTS.

Graphic source

Korea sees sharp increase in pet spending

South Korea reported a 20.9% increase on pet spending in August 2013 over the same month last year. Data collected from the Credit Finance Association showed spending at pet shops and veterinary clinics amassed an ₩83.1 billion ($77.7 million US) purchase totals. 

The demand for pet-related insurance programs also gathered ground this year, implying the growing presence of pet-related instruments in the country's financial sector. Two reporting insurance companies  announced policy increases of more than 400 subscribers in the past year. 

Market watchers said the rising amount of pet-related transactions with plastic cards came as more cardholders adopted companion animals amid the increasing number of one-member households in South Korea. 

READ THE KOREA TIMES ARTICLE