Featuring February 2009 pet owner survey data polling 2,600 U.S. adults, this all-new Packaged Facts trend report will bring you up to the minute with regard to the four core market categories—veterinary services, pet food, non-food pet supplies, and other pet services (grooming, boarding, training, etc.)—projecting sales and analyzing key growth drivers and competitive opportunities for each. The report is divided into five chapters, beginning with an Overview examining why the pet industry has been performing better than other industries of comparable size and maturity, and what marketers, retailers and product developers can do to help keep their own market momentum going. Four additional chapters examine ongoing and emerging trends in four focus areas—Humanization, Health and Wellness, Competition, and Demographics—covering such topics as the multifaceted notion of value during the recession; impact of the human/animal bond on consumer expenditures; adaptation of human brands, drugs and service types; natural, organic and green products; functional products including pet medications and supplements; impact of the fast-growth pet insurance industry; effect of big-box expansion and franchising in the pet services field; the rise of celebrity marketing, non-traditional media, and cause marketing; and pet ownership trends in key consumer segments including premium demographics, aging Baby Boomers and PONKS (Pet Owners/No Kids).

About the Author

David Lummis is the senior pet market analyst for Packaged Facts. He is also author of the monthly "Market Outlook" column in Pet Product News International, and a regular contributor of articles and market insight to other pet industry magazines as well as major business media including The New York Times and CNNMoney. Mr. Lummis also is President of New Orleans-based Marigny Research Group, Inc., a producer of custom market research reports for Packaged Facts. Since 1986, MRG has prepared more than 175 studies on consumer packaged goods markets and developed full report lines covering pet, demographic, retail and financial markets. Mr. Lummis, who graduated from Yale University, has also written approximately 75 other published B2B reports and is the author of the book, "Value Retailing in the 1990s."

Chapter 1: Introduction

Scope of Report

Report Methodology

Overview

Economy, Value and Recession Resistance

Pet Humanization

Table 1-1: Percent of Pet Owners Who Anticipate Spending Less on Pet Food/Supplies or Pet Services in Next 12 Months, February 2009

Premium Demographics

Pet Market Momentum

High Rates of Value-Added Product Entries

Table 1-2: Number of New Pet Product Introductions: Reports and SKUs, 2005-2009

Table 1-3: Top 20 Marketing Claims by Number of New Pet Product Reports, 2008

Pet Care Services Also Going Strong

International Cross-Pollination

Illustration 1-1: Nestlé Purina’s Friskies Flea Repellent Drops (France)

A $57 Billion Market by 2010

Table 1-4: U.S. Pet Market Retail Sales by Category: 2009 and 2010 (in billions of dollars)

Table 1-5: U.S. Pet Market Compound Annual Growth Rates: 2004-2008 vs. 2008-2013 (percent)

Chapter 2: Humanization

More Than a Trend

A Three-Pronged Movement

Human/Animal Bond

Figure 2-1: “Consider My Pet(s) Part of the Family”: By Percent of Pet, Dog/Cat, Dog and Cat Owners, February 2009

Table 2-1: Mean Number of Veterinary Visits: By Human/Animal Bond Among Dog and Cat Households, 2006

Table 2-2: Mean Veterinary Expenditures: By Human/Animal Bond Among Dog and Cat Households, 2006 (in dollars)

Human Company Cross-Over

Illustration 2-1: Jakks Pacific’s White Bites Oral Care Dog Treats with Arm & Hammer Baking Soda

Illustration 2-2: Bissell Website Banner for New Pet Lovers Products Collection

Illustration 2-3: Consumer Advertising for Procter & Gamble’s New Febreze Pet Odor Eliminator Extensions

Human-Style Product/Service Cross-Over

Illustration 2-4: Consumer Advertising for Dr. Harvey’s Handmade Biscotti for Dogs

Illustration 2-5: Trade Advertising for Bamboo’s New CatToids and DogToids Breath Mints

Illustration 2-6: Trade Advertising for Spa Lavish Your Pet’s Botanical Grooming Collections

A Societal Shift

Chapter 3: Health and Wellness

The Ultimate Value Appeal

Natural/Organic/Holistic Products

Figure 3-1: Seasonal Pattern of Pet Product Sales in the Natural Supermarket Channel: January 2005-December 2007 (in dollars)

Table 3-1: Percent of Pet Owners Who Purchased Natural/Organic Pet Products in Last 3 Months: Dog Owners vs. Cat Owners, February 2009 (percent of U.S. dog or cat owners)

Table 3-2: Percent of Pet Owners Who Would Buy More Natural/Organic Pet Products If They Were More Available or More Affordable, February 2009 (percent of U.S. dog or cat owners)

Figure 3-2: U.S. Retail Sales of Natural and Organic Pet Products: 2003, 2007 and 2012 (in millions of dollars)

Functional Products

Specialty and Functional Food Formulas on the Ups

Figure 3-3: Percent of Pet Owners Who Purchased Specialty Formula Dog or Cat Food in Last 3 Months: Dog Owners vs. Cat Owners, February 2009 (percent of U.S. dog or cat owners)

Table 3-3: Household Purchasing of Light/Weight Management and Senior Dry and Canned Dog and Cat Food: 2004 vs. 2008 (percent of U.S. households with dogs or cats)

Pet Supplements and Nutraceutical Treats Going Strong

Figure 3-4: U.S. Retail Sales of Pet Supplements and Nutraceutical Treats: 2003, 2007 and 2012 (in millions of dollars)

U.S. Pet Medications Posting Healthy Retail Sales

Figure 3-5: U.S. Retail Sales of Pet Medications: 2003, 2007 and 2012 (in billions of dollars)

Holistic Labeling

Pet Services Riding Pet Health Wave

Figure 3-6: Percentage of Dogs and Cats Age 6 and Over: 1996 vs. 2006

Complimentary/Holistic Pet Care

Figure 3-7: Attitudes About Alternative/Self-Care: Dog and Cat Owners, 2008 (index)

The Pet Insurance Boom

Ethical/Green Interest, Appeals

Figure 3-8: Dog or Cat Owners as Consumers: Selected “Green” Psychographics, 2008 (percent and index for U.S. dog or cat owners)

Chapter 4: Competition

Overview/Market Structure

Veterinary Services to the Fore

Figure 4-1: Percent of Dog Owners Who Used Pet Services in Last 12 Months: February 2009

Figure 4-2: Percentage Share of U.S. Pet Market Retail Sales by Category: 2004, 2008 and 2013

Food and Non-Food Supplies Coming Together

One-Stop Pet Care

Figure 4-3: PetSmart and Petco: Share of Pet Grooming, Boarding and Training Sales: 2000, 2005 and 2010 (percent)

A New Mid-Sized National Chain?

Additional Market Consolidation

Table 4-1: PetSmart and Petco Combined Sales: 2000-2008 (in millions of dollars)

Table 4-2: Timeline of U.S. Pet Product Marketer and Brand Acquisitions and Sales: 2001-2009

Franchising Altering Pet Services Terrain

Celebrity Marketing

Media Trends

Non-Traditional Media

Figure 4-4: Dog or Cat Owners as Consumers: Selected Media & Marketing Psychographics, 2008 (percent and index for U.S. dog or cat owners)

Value Focused Advertising

Illustration 4-1: Email Coupon for S.C. Johnson & Son’s New Pledge Fabric Sweeper for Pet Hair

Illustration 4-2: Petco Coupon Mailer Featuring Halo Purely for Pets

Emotional Messaging

Cause-Related Marketing

Retail Trends

Table 4-3: Household Purchasing of Pet Products by Retail Channel: Total Purchasers and Sole Purchasers, 2006 vs. 2008 (percent of U.S. households with pets)

Table 4-4: Percent of Pet Owners Who Do or Do Not Anticipate Spending Less on Pet Foods/Supplies in the Next 12 Months: By Retail Channel Always or Often Shopped, February 2009

Table 4-5: Indices for Spending Level Expectations for Pet Food/Supplies in the Next 12 Months: By Retail Channel Always or Often Shopped for Pet Products, February 2009

Table 4-6: Percent of Pet Owners Who Purchase Pet Food/Supplies by Retail Channel: Always, Often, Occasionally, February 2009 (percent of U.S. pet owners)

Refrigerated Pet Food

Frozen/Raw Pet Food

More Robust Pet Health Departments

Natural Supermarkets and Pet Stores

Mainstream Supermarkets Going Natural/Organic/Eco-Friendly

Compact Supermarkets

Walmart Capitalizing on Recession

Agricultural Channel Action

Increasing Private-Label Penetration

Figure 4-5: Attitudes About Healthcare Brands: Dog and Cat Owners vs. U.S. Adults Overall, 2008 (percent)

Independent Pet Shop/Boutique Trends

Internet Potential

Figure 4-6: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2008 (index for U.S. dog or cat owners)

Chapter 5: Consumer Demographics

Number of Dog and Cat Households Trending Upward

Figure 5-1: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications: 2003 vs. 2008 (percent of U.S. dog- or cat-owning households)

Premium Demographics

Figure 5-2: Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Brackets, 1997-2007 (percent)

Figure 5-3: Share of U.S. Pet Market Expenditures by Category: $70K+ Income Bracket Households, 1997 vs. 2007 (percent)

The Boomer Factor

Figure 5-4: Dog or Cat Ownership Rates by Age Bracket: 2003 vs. 2008 (percent of U.S. households)

Figure 5-5: Share of Total U.S. Population Growth for Selected Age Brackets: 2007-2015 (percent)

PONK (Pet Owner/No-Kid) Clout

Figure 5-6: Two-Adult Households/No Kids as Pet Owners: 2003 vs. 2008 (percent)

Ethnic Energy

Illustration 5-1: President Obama Promoting Shelter Adoption on the Cover of Tails Magazine, February 2009