The U.S. Pet Supplies Market

Scope and Methodology
Market Parameters
Report Methodology

The Products
A Wide Assortment of Products
Numerous Agencies Regulate Pets and Supplies

The Market
Sales Surpass $4.9 Billion in 1999
Table 1-1: The U.S. Market for Pet Supplies: Retail Sales, 1995-2004 (dollars)
Mass-Market Sales Jump 12%
Mass-Market Cat Litter Category Nears $800 Million Cats and Dogs Claim Equal Shares
61 Million Pet Households
The Pet Popularity Contest
Factors to Market Growth
Sales to Approach $7 Billion by 2004

The Marketers
More Than 2,000 Companies Market Pet Supplies
Clorox Claims 31% of Cat Litter Category
Hartz Corners 29% of General Cat/Dog Supplies
Hartz Brand Claims 24% in Rawhide Chews
Hartz at 21% in Non-Cat/Dog Supplies
Consolidation on Every Front
Manufacturing Changes Reflect Retailing Revolution Broad Movement Toward Natural Products
$61 Million in National Consumer Advertising
Well-Oiled Promotional Systems
Pet Event Sponsorship

Distribution and Retail
Distribution Through Regional Wholesalers
Shifting Shares Among Pet Supplies
Retailers
Figure 1-1: Share of U.S. Pet Supply Dollar Sales by Retailer Type, 1999 (percent): 4 Retailer Types, Other Mass Merchandisers Gain One-Tenth of Mass Market
Pet Supply Margins
A Push for Destination Centers
The World Wide Web
Natural Products Retailers

The Consumer
Overview of Consumer Patterns
61% of American Households Own Pets
Demographic Traits
Four in Ten Own More Than One Type

II. The Products

Scope of Report
Supplies for Private Pet Owners
A Wide Assortment of Products
Products and Services Not Included

Historical Background
Pets in the Past
Pets and Privilege
Pet Ownership Expands to Middle Class
Nineteenth-Century Roots of Market

Classification of Pet Supplies
The Best-Selling Pet Supply Items
Cat Litter
Most Are Ground Dry Clay
The Rise of Clumping
Drawbacks to Clumping
Gravel-Like Litter
Alternative Litters
Litter Packaging
Cat Toys
Dog Treats and Toys
Types of Rawhide Chews
Other Chew Toys
Pest-Control Products
Flea Collars
Sprays and Foams
Topical Applications
Anti-Pest Shampoos
Natural Pest Control
Special Packaging
Environmental Products
Wormers and OTC Pet Medications
Pet Carriers, Shelters, and Furniture
The Importance of Plastic
Airline Approval
Cages and Pens
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: Selected Pet Supply Segments and Products

Regulatory Environment
Numerous Agencies Regulate Pets and Supplies
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
State Regulation May Duplicate Federal Regulation
State-Level 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, 1995-1999 (dollars)

Market Size and Growth
Sales Surpass $4.9 Billion in 1999
Table 3-1: U.S. Retail Sales of Pet Supplies, 1995-1999 (dollars) Mass-Market Sales Jump 12%
Table 3-2: U.S. Mass-Market Sales of Pet Supplies, 1994-1998 (dollars) Mass-Market Cat Litter Category Nears $800 Million
Table 3-3: U.S. Mass-Market Pet Supply Sales by Product Category, 1996-1998 (dollars): Cat Litter/Deodorant, Other Cat/Dog Needs, Rawhide Chews, Non-Cat/Dog Needs

Market Composition
Mass Merchandisers and Pet Superstores Corner Over Half of Market Figure 3-2: Share of U.S. Pet Supply Dollar Sales by Retailer Type, 1999 (percent): 4 Retailer Types, Other
Mass Merchandisers Claim 57% of Mass Market
Figure 3-3: Share of U.S. Mass-Market Pet Supply Dollar Sales by Retailer Type, 1998 (percent): Mass Merchandisers, Supermarkets, Drugstores
Cats and Dogs Claim Equal Shares
Figure 3-4: Share of U.S. Pet Supply Dollar Sales by Type of Pet, 1999 (percent): 6 Types of Pet
Spending on Pets by Product Area
Cat Litter Claims 36% of Mass-Market Sales
Table 3-4: Dollar Share of U.S. Mass-Market Pet Supply Sales by Product Category, 1996 vs. 1998 (percent): Cat Litter/Deodorant, Other Cat/Dog Needs, Rawhide Chews, Non-Cat/Dog Needs
Sales by Region
Table 3-5: Regional Overview for Pet Ownership and Pet Supply Products by Index, 1998 (indices)
Sales Highest in Summer and December

The Pet Population
61 Million Pet Households
237 Million Pets
The Pet Popularity Contest
Cat vs. Dog Population
27 Recognized Cat Breeds
130 Recognized Dog Breeds
Freshwater Fish Population at 80 Million
Thousands of Fish Varieties
Cockatiels Are Favorite Birds
Rabbits Unseat the Hamster
Small Animal Varieties and Permutations
6.6 Million Reptile Pets
Table 3-6: U.S. Pet Population by Type, 1988-1998 (number): Dogs, Cats, Freshwater Fish, Birds, Small Animals, Reptiles, Saltwater Fish

Factors to Market Growth
Cats at Center Stage
Selling to a Graying America
Table 3-7: U.S. Population Age 55 and Over, 2000-2010 (number and percent)
The Indulgence Factor
Health and Natural Pet Supplies
New Developments in Pest Control
"Other" Pets and the Independents
Superstores and Market Sales
The Allure of the Web
Figure 3-5: Projected U.S. Retail Sales of Pet Supplies, 1999-2004 (dollars)

Projected Market Growth
Sales to Approach $7 Billion by 2004
Table 3-8: Projected U.S. Retail Sales of Pet Supplies, 1999-2004 (dollars)

IV. THE MARKETERS

The Marketers
More Than 2,000 Companies Market Pet Supplies
Range of Marketers
Hartz Group a Multi-Segment Player
Other Multi-Segment Marketers
Cat Litter Leaders Non-Food Consumer Products Companies Marketers of Pest Control and Medical Products
Hartz Leads in Rawhide Chews
Pet Shelter Marketers
Warner-Lambert Dominates Fish Supplies Market
Other Pet Segments Are Haven for Small Marketers
Table 4-1: The U.S. Market for Pet Supplies: Selected Marketers by Brand Line and Product Type (75 Marketers and Their Brands)

Marketer Shares
Share Estimates Are for Mass market
Clorox Claims 31% of Cat Litter Category
Figure 4-1: Marketer Shares of U.S. Mass-Market Cat Litter Sales, 1998 (percent): 4 Marketers, All Others
Hartz Corners 29% of General Cat/Dog Supplies
Figure 4-2: Marketer Shares of U.S. Mass-Market Cat and Dog Pet Supply Sales: General Supplies, 1998 (percent): 6 Marketers, All Others
Hartz Brand Claims 24% in Rawhide Chews
Figure 4-3: Marketer Shares of U.S. Mass-Market Rawhide Chew Sales, 1998 (percent): 4 Marketers, Private Label, All Others Hartz at 21% in Non-Cat/Dog Supplies
Figure 4-4: Marketer Shares of U.S. Mass-Market Non-Cat/Dog Pet Supply Sales, 1998 (percent): 5 Marketers, All Others

Competitive Overview
Consolidation on Every Front
Manufacturing Changes Reflect Retailing Revolution
Consolidation Snowballs

Competitive Profile: Carter-Wallace, Inc
Corporate Overview
Pet Supply Brands Specialize by Outlet
New Lambert Kay Shampoos

Competitive Profile: Central Garden & Pet Co
Corporate Overview
Pet Supplies Side Growing Through Acquisition
Zodiac a Complete Line of Pest-Control Products
Cutting-Edge and Traditional Flea-Control
Four Paws Generally in Niches
The Leader in Pet Publishing
Acquisition of Kaytee Pennington Seed Added to Central Garden Lineup

Competitive Profile: Clorox Co
Corporate Overview
New Directions for Fresh Step New
Advertising Tactic for Fresh Step First
Brands Acquisition First Brands Cat
Litter Lineup New Scoop Away
Products for Multiple Cats

Competitive Profile: ConAgra, Inc.
Corporate Overview
The Sergeant's Division
Complete Line of Pest Control
PreTect Introduced in 1998

Competitive Profile: Doskocil Manufacturing Co., Inc
Corporate Overview
Doskocil's Base in Pet Carriers
Dogloo Founded on Igloo-Shaped Dog House
More Cat Products Plans to Expand Overseas

Competitive Profile: Farnam Cos., Inc
Corporate Overview
Increased Commitment to the Category
Strategic Alliances Aid New Product
Introductions Bio Spot Spot-On Flea Treatment
New Bio Guard Shampoo Complements Spot-On Treatments
Pet Arthritis Treatments

Competitive Profile: Hartz Group
Corporate Overview
From Canaries to the Village Voice
Series of Pet Supply Acquisitions
Trying to Recover Share Loss
VMX Pest Controls for Specialty Channel
Launch of Ultimate Flea Collar
Hartz's Spot-On Offerings
The Total Pet Care Program

Competitive Profile: Oil-Dri Corp. of America
Corporate Overview
New Cat's Pride Formulations

Competitive Profile: Ralston Purina Co
Corporate Overview
Two World-Class Businesses
Beginning of a New Era?
Acquisition of Golden Cat
New Marketing Strategy for Tidy Cat
The Total Pet Care Program
Partnership with Penn

Competitive Profile: Warner-Lambert Co
Corporate Overview
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
Retailing Dynamics
Broad Movement Toward Natural Products
Green Tendencies in Pet Owners
Beyond Clay in Cat Litters
Natural Pet Haircare
Natural and Alternative Medicines for Pets
The Cat Litter Landscape
Attribute Choice Among Cat Litters
Trends in Cat Litter
Meeting the Veterinary Product Threat in Pest Control No Place Like Home
Table 4-2: The U.S. Market for Pet Supplies: Selected New Product Introductions, 1998-Summer 1999

V. Distribution And Retail

At the Distribution Level
Distribution Through Regional Wholesalers
Distributors Vary in Size and Specialization
Revenues of $1-$2 Million
Multiple Distributors Serve Retailers
Various Services Offered by Large Distributors
Big Boxes Threaten Distributors
Consolidation of the Distributor Business
Co-Ops Gain Fashion

Distributor Profile: Central Garden & Pet Co.
Corporate Overview
Growth Through Acquisition Elbowing In on Direct Distribution
Lawn Skirmishes

At the Retail Level
Shifting Shares Among Pet Supplies Retailers
Table 5-1: Share of U.S. Pet Supply Sales by Retailer Type, 1998 (percent): 4 Retailer Types, Other
Mass Merchandisers Gain One-Tenth of Mass Market
Table 5-2: The U.S. Pet Supplies Market: Share of Sales by Mass-Market Retail Sector—By Overall Market and Product Categories, 1994 vs. 1998 (percent)
Drugstores Slipping in Dollar Sales
Pet Supply Margins
A Push for Destination Centers

Retail Focus: Mass Merchandisers
Mass Merchandisers as Pet Shops
Mass Merchandisers Expand Pet Supplies Departments
Supply Margins Offset Food Bargains

Retail Focus: Pet Superstores and Chain Pet Stores
The Category Killers
Not All Pet Chains Are Superstores
Upscale Clientele
The Superstore Experience
Loss Leaders Draw Traffic

Retail Focus: Supermarkets
Supermarkets Stand Their Ground
Cooperation Between Retailers and Marketers
The Appeal of One-Stop Shopping
Supermarket Margins

Retail Focus: Independent Pet Stores
Sales of $400,000-$500,000
Independents More Likely to Sell Livestock
Distinctive Product Selections
Independent Pet Stores Are Diverse
Independents Band in Buying Groups
Imitating the Competition
Service Comes First
POP Systems Help Independents Compete
Displays at Independent Pet Stores
Margins Under Pressure

Retail Focus: Alternative Outlets
The World Wide Web
Table 5-3: Selected Online Outlets for Pet Supplies
Natural Products Retailers
Vets and Pet Supplies

Retailer Profile: PetsMart, Inc.
Corporate Overview
Growth Through "Category Killer" Formula
A Rough 1997
Philip Francis to the Rescue
PetsMart Goes Online

Retailer Profile: PetCo Animal Supplies, Inc
Corporate Overview
PetCo vs. PetsMart
The P.A.L.S. Program
Expansion Fallout
Still Early in the Game

VI. The Consumer

Note on Sources
SMRB Data
APPMA Data

Overview
General Consumer Patterns
Table 6-1: Consumer Overview for Pet Supply Products, 1998 (percent, year, and dollars)

The Pet Owner
61% 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 6-2: Demographic Characteristics Favoring Pet Ownership, 1998
Four in Ten Own More Than One Type

The Cat Owner
57 Million Americans Live in Cat Households
Younger Skew Among Cat Owners
Gender and Cat Fanciers
Race a Significant Factor
Cat Owners Run the Socioeconomic Gamut
Locality and Residential Status Are Indicators
Families Likely to Own Cats
Table 6-3a: Demographic Characteristics Favoring Residence in Cat- Owning Household: One Cat vs. Two Cats, 1998 (U.S. Adults)
Table 6-3b: Demographic Characteristics Favoring Residence in Cat-Owning Household: Three Cats vs. Four or More Cats, 1998 (U.S. Adults)

The Cat Litter Consumer
41 Million Americans Use Cat Litter
Age and Race Are Powerful Indicators
Cat Litter Buyers Slightly Upscale
Locality Not an Indicator
Purchasing by Family Status
The Plurality of Cat-Litter Users Are Heavy Users
Heavy Users Live in Northeast and Non-Metro Locales
Light and Medium Users Are Upscale
Tidy Cat Consumers
Scoop Away Buyers Relatively Upscale
Fresh Step Appeals to Younger Consumers
Jonny Cat Most Popular in West
Younger Adults Use Cat's Pride
Kitty Litter Maxx Is Anomaly
Table 6-4: Demographic Characteristics Favoring Use of Cat Litter by Type: Any Type, Regular, Scoopable, 1998 (U.S. Adults)
Table 6-5: Demographic Characteristics Favoring Use of Cat Litter by Frequency: Light, Medium, and Heavy Use of Cat Litter, 1998 (U.S. Adults)
Table 6-6a: Demographic Characteristics Favoring Use of Cat Litter by Brand: Tidy Cat, Scoop Away, Fresh Step, 1998 (U.S. Adults)
Table 6-6b: Demographic Characteristics Favoring Use of Cat Litter by Brand: Jonny Cat, Cat's Pride, Kitty Litter Maxx, 1998 (U.S. Adults)

The Dog Owner
77 Million People Living in Dog-Owning Households
Dog Ownership Highest Between Age 45 and 54
Race and Gender Are Non-Indicators
Dog Owners More Likely to Live in Non-Metro Areas
Dog Owners Slightly More Downscale Than Cat Owners
Multiple-Person Households Own Dogs
Table 6-7a: Demographic Characteristics Favoring Residence in Dog-Owning Household: One Dog vs. Two Dogs, 1998 (U.S. Adults)
Table 6-7b: Demographic Characteristics Favoring Residence in Dog-Owning Household: Three Dogs vs. Four or More Dogs, 1998 (U.S. Adults)

The Flea- and Tick-Control Consumer
63 Million Americans Use Flea- and Tick-Control Products
Collars Most Popular Delivery Form
Demographic Profile of Purchasers
Distinct Profile for User of Cat Collars
Hartz Appeals to Younger Group than Sergeant's
Table 6-8a: Demographic Characteristics Favoring Use of Flea- and Tick-Control Products by Type: Any Type, Collar for Dog, Collar for Cat, 1998 (U.S. Adults)
Table 6-8b: Demographic Characteristics Favoring Use of Flea- and Tick-Control Products by Type: Shampoo, Spray, Dip, 1998 (U.S. Adults)
Table 6-9: Demographic Characteristics Favoring Use of Flea- and Tick-Care Products by Brand: Hartz vs. Sergeant's, 1998 (U.S. Adults)

The Pet Food Supplements Consumer
15 Million Americans Use Pet Food Supplements
Users Are Slightly Upscale
Table 6-10: Demographic Characteristics Favoring Use of Pet Food Supplements/Vitamins, 1998 (U.S. Adults)

The Pet Fish Owner
Fish Kept as Pets in One in Ten Households
Young, Single, and Male
Saltwater Fish Owners Earn and Spend More
Table 6-11: Demographic Characteristics Favoring Ownership of Pet Fish, 1998

The Pet Bird Owner
6 Million Households Keep Birds
Older and Married
Table 6-12: Demographic Characteristics Favoring Ownership of Pet Birds, 1998
Owners of More Than One Bird

The Small Animal Owner
Small Animals Owned by One in 25 Households
Smaller Animals and Larger Households
Table 6-13: Demographic Characteristics Favoring Ownership of Small Animal Pets, 1998

The Pet Reptile Owner
Reptile Pets in Nearly 3 Million U.S. Households
Pet Reptile Households Larger
Table 6-14: Demographic Characteristics Favoring Ownership of Pet Reptiles, 1998
Owners of More than One Reptile Have Different Profile

Appendix I: Examples Of Consumer Advertising And Promotions
Appendix II: Addresses Of Selected Marketers