U.S. Pet Market Outlook, 2013-2014

Published: June 11, 2013 - 216 Pages

Table of Contents

  • Executive Summary
    • Introduction
      • Scope and Methodology
      • Report Methodology
    • Market Trends
      • Pet Industry Chugs Along
        • Table U.S. Pet Market Retail Sales by Category: 2012-2014 (in billions of dollars and percent change over previous year)
      • Market Share by Category and Animal Type
      • Pet Owners Still Spending Less
        • Table Level of Agreement with Statement: "I am spending less on pet products because of the economy," 2010-2013 (percent)
      • Pet Ownership and Population Trends
      • The Aging Pet Population
      • Overweight and Obese Pets Keep Costs Up
      • Higher-Income Household Market Boost Moderates
    • Industry Trends
      • Market Structure
      • M&A and Investment Activity: Pet Health and Natural Products Star
      • Humanization
      • Globalization
    • Retail Trends
      • Pet Shoppers Say Let's Make a Deal
      • Industry Mainstay: The Premium Shopper
      • Channel Loyalty Establishes New Baseline
        • Table Channel Loyalty in Pet Product Purchasing: All Channels, 2008-2012 (percent and number)
    • Pet Ownership Trends
      • Pet Ownership at 51% of U.S. Households
        • Table Household Penetration Rates for Selected Pet-Owning Classifications, 2008-2012 (percent of and number of U.S. households in millions)
      • Dog and Cat Ownership Rates by Age
      • Trends in Multiple Pet Ownership
      • Baby Boomers Adding New Dimensions to Market
      • Gen Y Ownership Takes Off
  • Market Trends
    • Market Performance
      • Pet Industry Chugs Along
        • Table U.S. Pet Market Retail Sales by Category: 2012-2014 (in billions of dollars and percent change over previous year)
        • Table Projected Total U.S. Retail Sales of Pet Products and Services, 2012-2017 (in millions of dollars)
        • Table U.S. Pet Market Compound Annual Growth Rates by Category: 2007-2012 vs. 2012-2017 (percent)
      • Market Share by Category and Animal Type
        • Table Percentage Share of U.S. Pet Market Retail Sales by Category: 2007, 2012, 2017
        • Table Share of U.S. Pet Market Sales by Category and Animal Type: Dog, Cat, Other, 2012 (percent)
      • Share of Pet Product Sales by Channel
      • Mass-Market Sales Caught in the Middle
        • Table IRI-Tracked Sales of Pet Products: Total and by Food and Nonfood Category and Segment, 2013 vs. 2012 (in millions of dollars, units and pounds)
      • Natural Supermarket Sales Up Across All Pet Categories
        • Table Retail Dollar Sales of Pet Products in the Natural Supermarket Channel by Category and Segment, 2012 vs. 2013 (in millions of dollars)
        • Table Share of Retail Dollar Sales of Pet Products in the Natural Supermarket Channel by Category and Segment, 2012 vs. 2013 (percent)
      • Specialty/Gourmet Supermarket Continues Upward Path
        • Table Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel by Category and Segment, 2012 vs. 2013 (in millions of dollars)
        • Table Share of Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel by Category and Segment, 2012 vs. 2013 (percent)
    • Market Drivers
      • Consumers Appear Cautiously Optimistic
        • Table Selected U.S. Economic Measures: 2008-2013 (percent and number in millions)
        • Table Pet Owners: Overview by Change in Financial Situation Compared With 12 Months Ago, 2009-2012 (U.S. pet-owning households)
        • Table Pet Owners: Overview by Expectations for Personal Financial Situation Over the Next 12 Months, 2009-2012 (U.S. pet-owning households)
      • Pet Owners Still Spending Less
        • Table Level of Agreement with Statement: "I am spending less on pet products because of the economy," 2010-2013 (percent)
      • Price Sensitivity May Be Letting Up Some
        • Table Level of Agreement with Statement: "Many pet products are becoming too expensive," 2011 vs. 2012 vs. 2013
      • Most Pet Owners Are Not Big Spenders
        • Table Amount Spent on Pet Products in Last 30 Days, March 2013 (percent)
        • Table Pet Product Purchasing by Price Level: Food vs. Nonfood, 2013 (percent)
      • Pet Ownership and Population Trends
        • Table APPA's Total Number of Dogs and Cats in the United States: By Type, 2000-2012
        • Table Changes in the U.S. Population and Pet-Owning Population, 1996-2012 (number and percent)
        • Table Household Penetration Rates for Selected Dog- or Cat-Owning Classifications: 2007-2012 (percent of U.S. households)
      • Trends in Pet Acquisitions: Shelters Gain Favor
        • Table Level of Agreement with Statement: "People should adopt pets from shelters and not purchase them from shops/breeders," 2013 (percent)
      • PetSmart Charities Spurs Pet Adoption
      • Pethealth Inc. (TSX:PTZ) Releases Second Annual PetPoint Report
      • The Shift to Smaller Dogs
        • Table Size of Dogs, 2012-2013 (percent of pet owners)
      • The Aging Pet Population
        • Table Age of Dogs and Cats, 2013 (percent of pet owners)
      • Overweight and Obese Pets Keep Costs Up
        • Table Percentage and Number of Overweight and Obese Dogs and Cats, 2012
      • Higher-Income Household Market Boost Moderates
        • Table Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Households, 2001-2011(percent)
        • Table $70K+ Household Share of U.S. Pet Market Expenditures: By Category, 2006, 2010, 2011 (percent)
      • Baby Boomers Adding New Dimensions to Market
      • Time with Pets Contributes to Happiness Among Older Owners
      • Pets Are Family-The Kind You Pamper
        • Table Pet Owner Attitudes and Behavior Characterizing Human/Animal Bond, 2013 (percent)
      • Pets as Family Trend Bolsters Pet Health/Wellness Spending
        • Table Level of Veterinary Expenditures by Human-Animal Bond and Animal Type, 2011 (mean dollars per household)
      • Companion Animals as Family
      • Pet-Positive Media Exposure
      • Industry Emphasizes Pets' Human Health Enhancement
      • Pets in the Classroom Sets Lofty Five-Year Goal
      • Cause Marketing
      • Cat Market Potential
  • Industry Trends
    • Introduction
      • Market Structure
      • M&A and Investment Activity: Pet Health and Natural Star
      • Merrick Acquires Castor & Pollux
      • For The Earth Acquires Prestige Pet Products
      • Bayer Acquires Teva Animal Health
      • Perrigo Acquires Sergeant's, Then Velcera
      • Radio Systems Corporation Gets Into Pet Waste Management
      • Petmate Continues Acquisition Spree
      • Distributors Consolidate, Expand Territories
      • Pethealth Buys PurinaCare's Pet Insurance Assets
      • Del Monte Foods and Natural Balance Pet Foods Merge
      • Investment Activity Targets Natural Pet Products
      • Digital Boarding/Sitting Services Attract Funding
      • Pfizer Spins Off Animal Health Division
      • Cross-Market Trends
      • Consolidation
      • Premiumization
      • Humanization
      • Cross Pollination
      • Globalization
    • Pet Services
      • National Players Continue to Expand Into Services
      • VCA Antech and Banfield March On
      • Overall Veterinary Visits Up, But Percentages Down
      • Dog Visits Up, But Fewer Dog Owners Visiting
      • Cat Visits Drop Some More
      • Efforts to Reverse Trend
        • Table Percentage of Dog and Cat Owners Who Have Visited Vet in Past Year: Routine Checkup vs. Sick/Emergency Care, September 2011 vs. March 2012
      • Morris Animal Foundation Advances Veterinary Research
      • Vets and Walmart at Odds Over Fairness to Pet Owners Act
      • Veterinary Channel Sales Opportunity: Therapeutic Foods
        • Table Level of Agreement with Statement: "I believe that pet supplements are more effective than `functional' pet food designed to treat specific health conditions," 2012 (percent)
        • Table Level of Agreement with Statement: "I believe "functional" pet food designed to treat specific health conditions is more effective than supplements in pill, tablet, liquid, or powder form," 2012 (percent)
        • Table Level of Agreement with Statement: "I do not use pet supplements because I believe my pet gets all the nutrients it needs from the pet food I buy," 2012 (percent)
      • Pet Insurance Expansion Benefits Veterinary Services
      • Non-Medical Pet Services: PetSmart and Petco Advance
        • Table PetSmart and Petco Sales of Pet Services, 2001-2012 (separately and cumulative, in millions of dollars)
      • PetsHotel Expansion Slows, PetSmart Renews Focus
        • Table Number of PetSmart PetsHotels in Operation, 2005-2012
      • PetSmart Joins Forces with Family Promise
      • Franchises Help Grow the Industry
      • Boarding Facilities Locating by Airports
      • Pet Airways Stops Flying
    • Pet Products
      • Continued Interest in Premium, Natural Products
        • Table Level of Agreement with Statement: "If natural/organic pet products were more available where I shop, I would buy them more often," 2012 vs. 2013 (percent)
        • Table Level of Agreement with Statement: "If natural/organic pet products were more affordable where I shop, I would buy them more often," 2012 vs. 2013 (percent)
      • Hill's Science Diet Goes Natural
      • Pet Health on Everybody's Agenda
      • Product Safety
      • Cross-Channel Migration Puts Squeeze on Pet Specialty
      • Human-Style and Human-Grade Pet Food
      • Natura Forced to Retract Human-Grade Claims, Pay Settlement
      • Grain-Free Gains Ground
      • Recession-Buster Dog and Cat Treats Slow Down
        • Table Projected U.S. Retail Sales of Small Animal (Dog, Cat, Other) Pet Supplements and Nutraceutical Treats: Total, Supplements, Treats, 2012-2017 (in millions of dollars)
        • Table Percent Purchasing Dog or Cat Treats, 2005-2012 (number and percent of dog- or cat-owning households)
      • Led by Freshpet, Refrigerated Pet Food Propels Forward
      • Specialized Diets Continue to Proliferate
      • Pet Medications: Sales to Top $9 Billion in 2015
      • Generic Pet Medications on the Rise
      • Nonfood Pet Supplies
      • Nonfood/Food Cross-Over
      • That Pet Has Style
      • Travel Products
      • Licensed Brands and Celebrity Appeal
      • Convenience/Automation
  • Retail Trends
    • Pet Shoppers Say Let's Make a Deal
      • Table Level of Pet Owner Agreement with Statement: "I shop for pet products at a variety of stores to find the best prices, special offers and sales," 2010 vs. 2011 (percent of pet owners)
    • Industry Mainstay: The Premium Shopper
    • Channel Loyalty Establishes New Baseline
      • Table Channel Loyalty in Pet Product Purchasing: All Channels, 2008-2012 (percent and number)
      • Table Share of Customer Base Who Are Channel-Loyal by Leading Retail Channels or Pet Superstore Chains, 2008-2012 (percent)
      • Table Channel-Loyal Customer Base for Pet Products by Leading Retail Channel or Pet Superstore Chain, 2008-2012 (number in thousands)
    • Coupon Use Rises Again
    • Pet Product Purchasing Rates by Channel
      • Table Household Purchasing Overview for Pet Products by Retail Classification: U.S. Households Overall vs. Dog or Cat Owners, Fall 2012 (number and percent)
    • Pet Superstores Gaining Ground
      • Table Purchasing Rates for Pet Products by Selected Retail Channels and Pet Superstore Chains: 2008-2012 (percent of dog or cat owners)
      • Table Purchasing Base for Pet Products by Selected Retail Channels or Pet Superstore Chains: 2008-2012 (U.S. dog or cat owners in thousands)
    • Pet Owners Choose Walmart
      • Table Channel Choices for Pet Product Shopping in Last Three Months: Pet Food, Pet Medications, Other Pet Supplies, 2012 (percent of pet product buyers)
    • Private Label Shows Strength and Weakness
      • Table Purchasing Patterns for Selected Types of Store-Brand Dog and Cat Food: By Retail Channel Shopped, Fall 2008 vs. Fall 2012 (percent)
      • Table IRI-Tracked Private-Label Sales of Pet Products: Total and by Food and Nonfood Category and Segment, 2012 vs. 2013 (in millions of dollars)
      • Table Private-Label Share of IRI-Tracked Sales of Pet Products: Total and by Food and Nonfood Category and Segment, 2012 vs. 2013 (percent)
    • Formerly Vet-Only Flea/Tick Spot-Ons Expand Reach
    • Mass-Market Trends
      • The Middle Market Crunch
      • Walmart Gaining Share
      • Drugstores Beef Up Pet Departments
      • Mass Channels Tapping into Pet Med Potential
      • PetSmart and Petco's Sales Top $10 Billion
        • Table PetSmart and Petco Sales and Number of Stores: 2001-2012 (cumulative, in units and millions of dollars)
      • PetSmart Emphasizes Exclusive Brands
      • Another PetSmart Exclusive: The Disney Pet Line
      • Petco Continues Growing Unleashed Concept
    • Online Shopping
      • Shoppers Buying More Pet Products Online
      • Heightened Competition
        • Table Top Websites for Purchasing Pet Products Online in Last 12 Months, 2011 (percent of dog/cat owners-9 websites)
        • Table PetMed Express Sales, 2009-2013 (in millions of dollars)
      • Looking Ahead
    • Up and Comers
      • Veterinarians
      • Natural Supermarkets
      • Dollar Stores
      • Agricultural/Feed-Seed Stores
      • Home Improvement Stores
      • Home Stores
  • Pet Ownership Trends
    • Pet Ownership at 51% of U.S. Households
      • Table Household Penetration Rates for Selected Dog- or Cat-Owning Classifications: 2007-2012 (percent of U.S. households)
      • Table Household Populations for Selected Dog- or Cat-Owning Classifications: 2007-2012 (thousands of U.S. households)
    • More $100K+ Pet Households
      • Table Change in Pet Market Consumer Base: Households Earning $100,000 or More vs. Households Earning Under $100,000: 2007 vs. 2012 (number of U.S. dog- or cat-owning households)
    • Dog and Cat Ownership Rates by Age
      • Table Dog or Cat Ownership Rates by Age Bracket: 2007-2012 (percent of U.S. households)
    • Trends in Multiple Pet Ownership
      • 34% of Pet Households Keep Multiple Types
        • Table Multiple Pet Ownership in the United States by Animal Type, 2007 vs. 2012 (percent of pet-owning households)
        • Table Ownership of Multiple Pets of a Single Type, 2007 vs. 2011 (percent of U.S. households who own a given type of pet)
    • Impact of Boomers and Graying Population
    • Role of Gen Xers and Gen Ys
      • Table Household Penetration Rates for Selected Pet-Owning Classifications: By Generational Cohort, 2012 (percent of U.S. households)
      • Table Household Populations for Selected Pet-Owning Classifications: By Generational Cohort, 2012 (number of U.S. households in thousands)
      • Table Indexes for Selected Pet-Owning Classifications: By Generational Cohort, 2012 (U.S. households)
      • Table Indexes for Dog or Cat Ownership: By Age Cohort, 2007 vs. 2012 (U.S. households)
      • Table Indexes for Dog or Cat Ownership: Younger vs. Older Boomers, 2007 vs. 2012 (U.S. households)
      • Table Number and Share of Total U.S. Population Growth for Selected Age Brackets: 2010, 2015 and 2020 (in thousands of number and percent)
    • Households With Kids
      • Table Dog/Cat Ownership Rates by Household Composition, 2007-2012 (percent)
      • Table Share of Total Dog/Cat Owners by Household Composition, 2007-2012 (percent)
      • Dog vs. Cat Households
        • Table Dog Ownership Rates by Household Composition, 2007-2012 (percent)
        • Table Share of Total Dog Owners by Household Composition, 2007-2012 (percent)
        • Table Cat Ownership Rates by Household Composition, 2007-2012 (percent)
        • Table Share of Total Cat Owners by Household Composition, 2007-2012 (percent)
    • Pet Ownership Grows in All Ethnic Groups
      • Table Change in Pet Market Consumer Base: White Non-Hispanics vs. Minorities, 2007 vs. 2012 (number and percent of U.S. dog- or cat-owning households)
      • Table Dog and Cat Ownership Trends by Race/Ethnicity, 2007-2012 (percent and number of U.S. dog- or cat-owning households)
      • Table Dog vs. Cat Ownership Trends by Race/Ethnicity, 2007 vs. 2012 (percent and number of U.S. dog- or cat-owning households)
      • Table Demographic Snapshot of the U.S. Population, 2011
      • Table Projected Population Growth, Hispanics vs. Other Population Segments, 2010-2050 (in thousands)
    • Pet Owner Psychographics
      • Health and Medical Related Sentiments and Practices
        • Table Selected Health & Medical Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2012 (percent and index)
        • Table Selected Health & Medical Psychographics: Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2012 (percent and index)
    • "Green" Sentiments and Practices
      • Table Selected Sustainability Related Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2012 (percent and index)
      • Table Selected Sustainability Related Psychographics: Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2012 (percent and index)
      • Media, Marketing and Channel Related Sentiments and Practices
        • Table Selected Media and Marketing Related Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2012 (percent and index)
        • Table Selected Media and Marketing Related Psychographics: Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2012 (percent and index)

Abstract

While the country has not yet completely emerged from its economic funk, the pet industry continues to chug along. Pet product shoppers were not immune to the Recession’s effects, but the most recent Packaged Facts’ proprietary Pet Owners Survey shows that they are becoming less price sensitive than in years past. And this trend is borne out in the sales data. Sales in mass channels such as grocery stores have been relatively flat, but pet owners have continued to migrate to pet specialty channels, which focus more on the high-end market. Another trend continuing to gain steam has been the pet industry’s emphasis on natural products, as seen in M&A activity (e.g., Merrick acquiring Castor & Pollux and Del Monte acquiring Natural Balance) and the embrace by industry heavy hitters from Purina to Hill’s Science Diet to Walmart.

Pet health has proven to be a particularly attractive category. As the pet population has aged, the interest by big players such as Bayer and Perrigo has increased. One deal that received considerable investor attention was Pfizer’s spinoff of its animal health division, which it renamed Zoetis.

The industry has embarked on a number of initiatives to spur growth in pet ownership and some of those are beginning to pay dividends. These include programs such as the Human Animal Bond Research Initiative and the Pets in the Classroom initiative, which is introducing pet ownership to youth to encourage future ownership. Indeed, pet ownership among Gen Y jumped to its highest level in years in 2012.

The humanization of pets continues as a strong trend, with manufacturers and retailers introducing everything from human-style food to pet temporary tattoos. And the media is feeding the frenzy, giving pets their own TV channel and focusing on the outlandish things pet parents will do for them.

Combining Packaged Facts’ extensive monitoring of the pet market with a proprietary Pet Owner Survey hot off the presses—U.S. Pet Market Outlook 2013-2014 is the go-to source for a complete understanding of U.S. pet industry. In its 5th edition, the report evaluates current trends and future directions for marketing and retailing , along with consumer patterns across the full spectrum of the market, including veterinary services, pet food, nonfood pet supplies, and non-medical pet services (grooming, boarding, training, etc.). Building on the market tracking, forecasting, and position-taking of previous editions, the report forecasts market size and growth for each category; examines new product activity; surveys retail channel trends including cross-channel shopping vs. shopper loyalty; and analyzes trends and shifts in the needs of today’s pet parents. The report tabulates pet product sales channel by channel, using data from sources including SymphonyIRI Group, whose InfoScan Review data tracks sales in supermarkets, drugstores, and mass merchandisers other than Walmart; and SPINS, Inc., whose SPINSscan service tracks sales in the natural supermarket channel and in the specialty gourmet supermarket channel. Supplementing Packaged Facts’ exclusive Pet Owner Survey is an extensive analysis of Simmons’ Fall 2012 National Consumer Study, which is based on 25,564 adult respondents surveyed from October 2011 through November 2012, as well as previous-year Simmons surveys. The report contains dozens of numerical tables and charts, as well as numerous photographs of new products and in-store promotional and merchandising initiatives across key channels.

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