I. Executive Summary

The Products
The Largest-Selling Pet Supply Items
Cat Litter at 50
Cat Toys and Feline Instincts
Dog Treats and Toys
Pest-Control Products
Wormers and OTC Pet Medications
Pet Carriers, Shelters, and Furniture
Products Associated with Pet Fish
Products Associated with Pet Birds
Products Associated with Small Animals
Products Associated with Reptiles and Amphibians
The Market
1997 Sales Exceed $4 Billion
Table 1-1: The U S Market for Pet Supplies: Retail Sales, 1993-2002 (dollars)
Unit Sales Increasing Faster Than Dollar Sales
Cat Litter Claims 38% of Mass-Market Sales
Mass Merchandisers, Superstores Account for 52% of Market Cats Claim 32% of Dollar Sales
Spending on Pets by Product Category
Sales by Region
Sales Highest in Summer and December
Cats at Center Stage
Demographics and Dogs
Selling to a Graying America
The Marketers
At Least 2,000 Companies Market Pet Supplies
Manufacturing Changes Reflect Retailing Revolution
Fewer Opportunities for Small Companies
Ralston Purina Claims 27% of Cat Litter Category
Figure 1-1: Marketer Shares of U S Mass-Market Cat Litter Sales, 1996 (percent): Ralston Purina, First Brands Corp , Clorox Co , Oil-Dri Corp Of America, Private Label, All Others
Hartz Corners 26% of General Cat/Dog Supplies
Hartz at 17% in Non-Cat/Dog Supplies
Harper Gains Over Hartz and Nestlé in Rawhide Chews
Broad Movement Toward Natural Products
Green Tendencies in Pet Owners
$66 Million in National Consumer Advertising
Retailers Spend $30 Million in Advertising
PetsMart Is Leading Spender
Distribution and Retail
Distributors Under Pressure from Big Boxes
Consolidation of Distributor Business
The Changing Face of Pet Supplies Retailing
Pet Supply Margins
Mass Merchandisers Target Cat and Dog Dollars
Mass Merchandisers Up the Ante
The Category Killers
The Superstore Experience
Uneven Performance in Supermarket Sales
Supermarket Margins Average 43%
Independents Gross Sales of $400,000-$500,000
The Consumer
59% of American Households Own Pets
57 Million Americans Live in Cat Households
41 Million Americans Buy Cat Litter
Consumers Preferring Tidy Cat
79 Million People Live in Dog-Owning Households
67 Million Americans Use Flea/Tick Products
Hartz Appeals to Younger Group
Fish Kept in One in Ten Households
6 Million Households Keep Pet Birds
Small Animals and Reptiles
Scope and Methodology
Market Parameters
Report Methodology

II. The Products

Scope of Report
Supplies for Private Pet Owners
A Wide Assortment of Products
Products and Services Not Included
Historical Background
The Past of Pets
Pets for the Privileged
Pets Trickle Down
Nineteenth-Century Roots of Market
Classification of Pet Supplies
The Largest-Selling Pet Supply Items
Cat Litter at 50
Cat Toys and Feline Instincts
Dog Treats and Toys
Pest-Control Products
Wormers and OTC Pet Medications
Pet Carriers, Shelters, and Furniture
Products Associated with Pet Fish
Products Associated with Pet Birds
Products Associated with Small Animals Products Associated with Reptiles and Amphibians
Table 2-1: Pet Supply Segments and Products
Regulatory Environment
Numerous Agencies Regulate Pets and Supplies USDA, FDA, EPA, FTC, and USFWS Regulation
Role of the USDA
FDA Regulates Treatments, Standards
Registration with the EPA
Advertising and Warranties Under the FTC
Regulation of Exotics and Non-Indigenous Species Federal
Information Agencies Can Affect Local Legislation AAFCO Drafts
Model State Legislation
State Regulation May Duplicate Federal Regulation
States Have Own Import and Export Laws
Weights and Measures Requirements at State Level
Local Regulation Increasing for Pet Ownership
Unofficial Regulation by Landlords
Retailer Regulation Also on the Rise

III. The Market

Figure 3-1: U S Retail Sales of Pet Supplies: Mass Market vs All Outlets, 1993-1997 (dollars)
Market Size and Growth
1997 Sales Exceed $4 Billion
Table 3-1: U S Retail Sales of Pet Supplies: Mass Market vs All Outlets, 1993-1997 (dollars)
Cat Litter a $700-Million Mass-Market Category
Table 3-2: U S Mass-Market Pet Supply Sales by Product Category, 1994-1996 (dollars): Cat Litter/Deodorant, Other Cat/Dog Needs,
Non-Cat/Dog Needs, Rawhide Chews
Mass-Market Trends Are Distinct
Unit Sales Increasing Faster Than Dollar Sales
Market Composition
Cat Litter Claims 38% of Mass-Market Sales
Table 3-3: Dollar Share of U S Mass-Market Pet Supply Sales by Product Category, 1994 vs 1997 (percent): Cat Litter/Deodorant, Other Cat/Dog Needs, Rawhide Chews, Non-Cat/Dog Needs Mass Merchandisers, Superstores Account for 52% of Market
Figure 3-2: Share of U S Pet Supply Dollar Sales by Retailer Type, 1997 (percent): Mass Merchandisers, Pet Superstores, Supermarkets, Independent Pet Stores, Other
Cats Claim 32% of Dollar Sales
Figure 3-3: Share of U S Pet Supply Dollar Sales by Type of Pet, 1997 (percent): Cats, Dogs, Fish, Birds, Small Animals, Reptiles/Amphibians
Spending on Pets by Product Category
Sales by Region
Sales Highest in Summer and December
The Pet Population
58 Million Pet Households
500 Million Pets
The Pet Popularity Contest
Cats vs Dogs
27 Recognized Cat Breeds
130 Recognized Dog Breeds
Surge in Freshwater Fish
Thousands of Fish Varieties
Fluctuating Population of Pet Birds
Parakeets Are America's Favorites
Rabbits Unseat the Hamster
Small Animal Varieties and Permutations
7.6 Million Reptile Pets
Table 3-4: U S Pet Population by Type, 1988-1996/1997 (number): Dogs, Cats, Freshwater Fish, Birds, Small Animals, Reptiles, Saltwater Fish
Factors Affecting Market Growth
Cats at Center Stage
Demographics and Dogs
Selling to a Graying America
The Indulgence Factor
"Other" Pets and the Independents
Superstores and Market Sales
The Stamina of Superstore Expansion
Figure 3-4: Projected U S Retail Sales of Pet Supplies, 1997-2002 (dollars) Projected Market Growth
Sales to Surpass $5.3 Billion by 2002
Table 3-5: Projected U S Retail Sales of Pet Supplies, 1997-2002 (dollars)

IV. The Marketers

The Marketers
At Least 2,000 Companies Market Pet Supplies
40% of Manufacturers Have Annual Sales of Under $500,000
Many Types and Sizes of Companies
Hartz Mountain a Major Player in Many Segments
Other Multi-Segment Marketers
Cat Litter Leaders Non-Food Consumer Products Companies
Marketers of Pest Control and Medical Products
Leather Company Leads in Rawhide Chews
Pet Shelter Marketers
Warner-Lambert Dominates Fish Supplies Market
Other Pet Segments Are Haven for Small Marketers
Table 4-1: U S Market for Pet Supplies: Selected Marketers by Brand Line and Product Type (108 Marketers)
Marketer and Brand Shares
Note on Share Estimates
Three Marketers Account for Two-Thirds of Cat Litter Sales
Ralston Purina Claims 27% of Cat Litter Category
Figure 4-1: Marketer Shares of U S Mass-Market Cat Litter Sales, 1996 (percent): Ralston Purina, First Brands Corp , Clorox Co , Oil-Dri Corp Of America, Private Label, All Others
General Cat/Dog Supply Sales Are Splintered
Hartz Corners 26% of General Cat/Dog Supplies
Figure 4-2: Marketer Shares of U S Mass-Market Cat and Dog Pet Supply Sales, 1996 (percent): 7 Marketers and All Others A Few Non-Cat/Dog Marketers Corner Mass Market
Hartz at 17% in Non-Cat/Dog Supplies
Figure 4-3: Marketer Shares of U S Mass-Market Non-Cat/Dog Pet Supply Sales, 1996 (percent): 7 Marketers, Private Label, and All Others
Three Marketers Account for Almost Two-Thirds of Rawhide Chew Sales
Harper Gains Over Hartz and Nestlé in Rawhide Chews
Figure 4-4: Marketer Shares of U S Mass-Market Rawhide Dog Chew Sales, 1996 (percent): 6 Marketers, Private Label, and All Others
The Competitive Situation
Consolidation on Every Front
Manufacturing Changes Reflect Retailing Revolution
Fewer Opportunities for Small Companies
Consolidation a Self-Fulfilling Momentum

Competitive Profile: Carter-Wallace, Inc
Corporate Overview
Sales of $649 Million
Pet Supply Brands Specialize by Outlet
Pursuing Natural and Other Niches

Competitive Profile: Central Garden & Pet Co
Corporate Overview
Sales of $841 Million
Pet Supplies Side Growing Through Acquisition
Zodiac Ranks Second in Flea/Tick-Control in Pet Stores
Four Paws Generally in Niches
Position in Pet Publishing
Kaytee a $100-Million Brand
Acquisition in the Making
Other Businesses

Competitive Profile: Clorox Co
Corporate Overview
Sales of $2.5 Billion
New Approach to Fresh Step
Competitive Challenges in Cat Litter
Roster of Leading Household Brands
Eye on Global Markets

Competitive Profile: Doskocil, Inc
Corporate Overview
Sales of $175 Million
Doskocil's Base in Pet Carriers
Dogloo Founded on Igloo-Shaped Dog House
From Patent Lawsuit to Corporate Marriage

Competitive Profile: Farnam Companies, Inc
Corporate Overview
Sales Goal of $200 Million
From Agricultural to Pet Supplies
Increased Commitment to the Category
Strategic Alliances Aid New Product Introductions
Emphasis on Niche Marketing
More Products and Promotion

Competitive Profile: First Brands Corp
Corporate Overview
Pet Supply Sales of $157 Million
Acquisition of A&M Products
Acquisition of Excel Mineral Co
Multi-Brand, Multi-Channel Strategy
New Products Continue Segmentation Strategy
Other Pet Supplies

Competitive Profile: Hartz Group, Inc
Corporate Overview
Sales Estimated at $1 Billion
From Canaries to theVillage Voice
Series of Pet Supply Acquisitions
Sentry Battle Leads to Share Loss
VMX Pest Controls for Specialty Channel
Launch of Ultimate Flea Collar

Competitive Profile: Ralston Purina Co
Corporate Overview
Sales of $6.5 Billion
End of Transitional Era
Acquisition of Golden Cat
Golden Cat's PreSale Makeover
Battle for Market Share
New Products and Plant
From Activity Centers to Websites

Competitive Profile: Warner-Lambert Co
Corporate Overview
Sales of $8.2 Billion
Tetra Sales Division
Developer of Flake Fish Food
Everything for the Fish, Reptile, and Amphibian Hobbyist Real
Marketing, Virtual Aquariums
Marketing and New Product Trends
Broad Movement Toward Natural Products
Green Tendencies in Pet Owners
Beyond Clay in Cat Litters
Natural Pet Haircare
Natural Pest-Control Products
Natural and Alternative Medicines for Pets
The Cat Litter Landscape
Attribute Choice Among Cat Litters
Antibacterial and Special Ingredients in Cat Litter
Dogs and Environmental Protection
Meeting the Veterinary Product Threat in Pest Control
Myriad New Product Introductions

Table 4-2: U S Market for Pet Supplies: Selected New Product Introductions, 1996-1997
Consumer Advertising and Promotion
$66 Million in National Consumer Advertising
Retailers Spend $30 Million in Advertising
PetsMart Is Leading Spender
Wavering Budgets from Various Marketers
Range of Ad Positioning and Sophistication
Humor, Odor, and Cat Litter
Longing for Dogloo
Targeting the Hobbyist
Some Segments Have Well-Oiled Promotional Systems
From 101 Dalmatians to Space Jam
800 Numbers and Websites
Sponsorship of Pet Events and Charitable Causes
Educational Seminars and Videos
Examples of Consumer Advertising and Promotion
Trade Advertising and Promotion
Print Is Preferred Medium
Ads Stress Turns, Profits, and Marketing Support
Print Educates the Retailer
Luring with Discounts
Impact of Superstores Streamlines Trade Incentives
The Co-Op Option
Modernizing the Independents
Examples of Trade Advertising and Promotion

V. Distribution and Retail

At the Distribution Level
Distribution Through Regional Wholesalers
Distributors Vary in Size and Specialization
Typical Distributor Posts Revenues of $1-$2 Million
Retailers Use Multiple Distributors
Larger Distributors Offer Range of Services
Distributors Under Pressure from Big Boxes
Consolidation of the Distributor Business
Gaining by Shrinking?
Co-Ops Gain Fashion
Distributor Profile: Central Garden & Pet Co
Corporate Overview
Elbowing in on Direct Distribution
Other Distribution Businesses
At the Retail Level
The Changing Face of Pet Supplies Retailing
Figure 5-1: Retail Share of Pet Supplies, 1985 vs 1997 (percent): Mass Merchandisers, Pet Superstores, Supermarkets, Independent Pet Stores, Other
Pet Supply Margins
Mass Merchandisers Target Cat and Dog Dollars
Mass Merchandisers as Pet Shops
Mass Merchandisers Up the Ante
Supply Margins Offset Food Bargains
Around 1,500 Chain Stores
The Category Killers
Not All Pet Chains Are Superstores
Spending to Save
The Superstore Experience
Loss Leaders Draw Traffic
Uneven Performance in Supermarket Sales
Supermarket Chains Introduce In-Store Pet Shops
Supermarket Margins Average 43%
Independents Gross Sales of $400,000-$500,000
Selection Slant in Independents
Variety Within Independent Pet Channel
Specialization as Competitive Option
Independents Band in Buying Groups
Imitating the Competition
Personalized, Knowledgeable Service
POP Systems Help Independents Compete
Display at Independent Pet Stores
Margins Under Pressure
Supply Sales Through Veterinary Hospital Chains
Manufacturers Selling Direct Through the Web
But Websites May Become More Expensive
Pet Shops in Cyber Space?
Retailer Profile: PetsMart, Inc
Corporate Overview
Sales of $1.8 Billion
Growth Through "Category Killer" Formula
Retailer Profile: Petco Animal Supplies, Inc
Corporate Overview
Differences Between PetCo and PetsMart
Toward 1,250 Outlets

VI. The Consumer

Note on Sources
APPMA Data
SMRB Data
The Pet Owner
59% of American Households Own Pets
Married with Children
Adult Pet Owners Are Typically Between 25 and 54
Pet Owners Have Above-Average Incomes
Whites More Inclined to Own Pets
Table 6-1: Demographic Characteristics Favoring Pet Ownership, 1997 Four in Ten Own More Than One Type
"Spectator" Pets in Metro Areas
The Cat Owner
57 Million Americans Live in Cat Households
Gender and Cat Fanciers
Younger Skew Among Cat Owners
Singles or Marrieds
Whites Are Prime Cat Owners
Only the Most Downscale Are Resisters
Table 6-2a: Demographic Characteristics Favoring Residence in Cat-Owning Household: Any Cats vs. One Cat, 1997
Table 6-2b: Demographic Characteristics Favoring Residence in
Cat-Owning Household: 2 Cats, 3 Cats, 4 or More Cats, 1997
The Cat Litter Consumer
41 Million Americans Buy Cat Litter
Southerners Are Resisters
Scoopable Cat Litter Buyers Upscale
Purchasing by Family Status
Table 6-3: Demographic Characteristics Favoring Purchase of Cat Litter: Any Kind, Regular, Scoopable, 1997
Differences Among Light, Medium, and Heavy Users
The Plurality of Users Are Heavy Users
Table 6-4: Demographic Characteristics Favoring Light, Medium, and Heavy Use of Cat Litter, 1997
Consumers Preferring Tidy Cat
Northeast Is Stronghold for Fresh Step
Median Age of 40.4 for Scoop Away Buyers
Jonny Cat Most Popular in West
Table 6-5a: Demographic Characteristics Favoring Purchase of Cat Litter by Brand: Tidy Cat vs Fresh Step, 1997
Table 6-5b: Demographic Characteristics Favoring Purchase of Cat Litter by Brand: Scoop Away vs Jonny Cat, 1997
The Dog Owner
79 Million People Living in Dog-Owning Households
Dog Ownership Highest Between Age 35 and 54
Dog Owners More Likely to Live in South, Non-Metro Areas Table
6-6a: Demographic Characteristics Favoring Residence in Dog-Owning Household: Any Dogs vs One Dog, 1997
Table 6-6b: Demographic Characteristics Favoring Residence in Dog-Owning Household: 2 Dogs, 3 Dogs, 4 or More Dogs, 1997
The Flea/Tick-Control Consumer
67 Million Americans Use Flea/Tick Products
Collars Most Popular Delivery Form
Demographic Profile of Purchasers
Table 6-7: Demographic Characteristics Favoring Purchase of Flea/Tick-Control Products, 1997
Hartz Appeals to Younger Group than Sergeant's
Table 6-8a: Demographic Characteristics Favoring Purchase of Flea/Tick-Control Products by Brand: Hartz vs Sergeant's, 1997 Adams Has Relatively Upscale Profile
Lambert Kay's Victory Has Some Unusual Features
Table 6-8b: Demographic Characteristics Favoring Purchase of Flea/Tick-Control Products by Brand: Adams vs Victory, 1997
The Pet Fish Owner
Fish Kept as Pets in One in Ten Households
White, Married, and Middle-Aged
Saltwater Fish Owners Spend More, Earn Less
Table 6-9: Demographic Characteristics Favoring Ownership of Pet Fish, 1997
The Pet Bird Owner
6 Million Households Keep Birds
Ownership Drops at 55 or Older
Table 6-10: Demographic Characteristics Favoring Ownership of Pet Birds, 1997
Owners of More Than One Bird
The Small Animal Owner
Small Animals Owned by One in 20 Households
Smaller Animals and Larger Households
Table 6-11: Demographic Characteristics Favoring Ownership of Small Animal Pets, 1997
The Pet Reptile Owner
Reptiles Pets in 3 Million U S Households
Pet Reptile Households Larger
Table 6-12: Demographic Characteristics Favoring Ownership of Pet Reptiles, 1997
Owners of More than One Reptile Have Different Profile