The Pet Industry is Expanding to Include Never-Seen-Before Pet Services

GREENWICH, CT, (NAMC) - The pet industry is continuing its rapid rise to the top with pet spending expected to exceed a whopping $35.9 billion dollars by the end of 2005. While many of the trends helping to fuel this booming industry such as the humanization of pets and an increase in high-end pampering have been acknowledged, the American Pet Products Manufacturers Association (APPMA) has identified new trends driving its growth and is unveiling them in the following pet industry report: "Top Six For '06."

"We strive to continuously monitor the needs of pets and their owners, and track what companies are doing to respond and evaluate how we can help ensure ingenuity, convenience, longevity and safety for pets and their owners," said APPMA Managing Director and COO Bob Vetere. "This report demonstrates how consumer demand for pet products and services is expanding into almost every corner of what has typically been reserved for human consumption."

Top Six for '06 Pet Industry Trends

1. New Pet Services: Though most of today's dogs don't get exactly the same treatment that Paris Hilton's "Tinkerbell" does, many owners are definitely willing to provide their pets with top-notch treatments whether it be for beauty or health. With more people considering their pet a part of the family, many pet lovers are considering the mental, physical and behavioral issues facing their faithful companions. This has helped fuel a new breed of service providers including pet behaviorists who treat unruly pet behavior and training programs for pet hotel operators, pet butlers, pet sitters, pet massage therapists, pet communicators and pet travel agents.

2. Medical Advancements in Pet Care: Surgery on a goldfish? Yes, medical advancements in pet care are on our top six list. A growing number of veterinarians are being trained to provide highly specialized medical services ranging from canine dialysis, brain surgery, hip replacements, cancer treatments, teeth correction with braces and cataract surgery. Canine prescription lenses are even available. Human health technology such as ultrasounds, MRIs and CAT scans are quickly becoming part of the routine ways to find out what's ailing our furry friends. Nutritional supplements and medications for pets are also becoming more widely used. APPMA's 2005-2006 National Pet Owners Survey notes that 52 percent of dogs, 24 percent of cats, 36 percent of saltwater fish, 15 percent of freshwater fish, five percent of birds, 11 percent of small animals and eight percent of reptiles are given medications and/or drugs. According to the survey, pet insurance is also gaining in popularity with three percent of dogs and one percent of cats having pet insurance (up from 2002 stats showing two percent and less than one percent, respectively). Many companies are even adding pet insurance to their employee benefits plans.

3. Animal Assisted Therapy: While most pet owners recognize that pets make them feel better, science is catching up with dozens of studies showing pets can help with learning and education, stress reduction, lowering blood pressure and reducing the risk of heart attacks. This has spurred the increasing use of companion animals to assist with everything from detecting cancer in humans to comforting Alzheimer's patients. Pets are being introduced into the therapeutic regimens of many health care institutions: nursing homes, hospitals, rehabilitation centers, psychiatric institutions and others. Therapeutic riding programs have been shown to improve motor skills and coordination of the physically challenged. Pets help inmates in correctional facilities, juvenile offenders and troubled children to learn empathy and compassion. Dolphins are being utilized to help autistic children. In short, animal assisted therapy is just one example of the new and imaginative ways of bringing pets and people together for mutual benefit.

4. Licensed Pet Products: Americans have been wearing Mickey Mouse hats and drinking from Superman cups for years. But, the licensing of popular American icons has crossed over into the world of pets. Popular characters you'll now see on pet products include Nickelodeon SpongeBob SquarePants(TM) aquariums and accessories, Blue's Clues(TM) Puppy Teethers, Clifford The Big Red Dog(TM) Tummy Teasers(TM), PEANUTS(R) costumes and goggles for dogs, Dr. Seuss(TM) toys, Jeep(TM), Coleman(TM), American Kennel Club(TM) and Barbie(TM) pet clothing and products.

5. Private Labeling: The next trend hot on the "tail" of the booming pet industry is private labeling. This growing segment is not just for big box retailers any more. Independent retailers are also finding innovative ways to introduce their own brands. Store brands now account for 11 percent of cat food, 12 percent of dog food, 13 percent of pet supplies and 21 percent of cat litter according to the Private Label Manufacturers Association. "As the pet industry matures, retailers are relying more on their own brands to differentiate from their competition through either value-priced or premium-priced product strategies," said Vetere. An example of smaller store brands, Planet Dog offers custom Orbee-Tuff balls that stores can customize with their own company colors, name, logo and artwork.

6. Mergers and Acquisitions: With all this growth and innovation, it's no wonder the industry is starting to see more mergers and acquisitions. Currently, companies acquiring pet product manufacturing companies are paying higher valuations than they were just one year ago. To name a few recent deals: Spectrum Brands Inc. (formerly Rayovac Corp.) recently acquired Tetra, a privately held fish product supplier; Central Garden & Pet Co. purchased Pets International Ltd.; Sumitomo acquired Hartz Mountain which then acquired Harper Leather Goods; and Aspen Pet Products recently purchased MACS. "We anticipate there will be significant growth in these types of acquisitions over the next year," said Vetere. "This trend demonstrates the industry is maturing while an influx of smaller startup companies also indicates healthy growth."

With new products and services being introduced at an increasingly rapid pace, it appears American's love affair with their pets will continue into the new year and beyond.

Founded in 1958, the American Pet Products Manufacturers Association is the nation's leading not-for-profit trade organization serving the interests of the pet product industry and educating the public on the many joys and health benefits associated with pet ownership. APPMA's membership consists of nearly 850 companies, which include both small businesses as well as the nation's leading pet product companies. Every year APPMA does extensive research utilizing a number of industry and affiliated sources to track the overall size of the pet industry and also conducts a comprehensive survey of pet owners every two years. Visit APPMA online at www.appma.org.

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