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U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in Challenging Economic Times


Attention: There is an updated edition available for this report.

During the current macroeconomic environment the much touted recession resistance of the pet industry is being put to the test like never before—and appearing to hold up as of March 2009. Whereas total U.S. retail sales rose just 1.4% overall in 2008 according to the National Retail Federation, No. 1 pet specialty retailer PetSmart posted an 8.4% sales increase in fiscal year 2008; top five pet food marketers Del Monte and Hill’s recently reported double-digit growth, with Del Monte’s pet product net sales up 15.1% during the third quarter of fiscal year 2009 (ending May 3), and Hill’s revenues up 13.5% in fourth-quarter calendar 2008; leading veterinary hospital operator VCA Antech posted 6.7% revenues growth during fourth-quarter 2008; and online merchant PetMed Express reported a 16% increase in net sales during the fourth-quarter 2008. Looking at the pet industry as a whole, Packaged Facts predicts overall steady performance in 2009 and 2010, although the market growth rate will drop back slightly due to cutbacks in some of the more discretionary categories.

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).

Read an excerpt from this report below.

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."


Market Insights: A Selection From The Report


Natural/Organic/Holistic Products

In the minds of most of the pet owners who purchase them, natural and organic products have always been associated with enhanced pet health and wellness, but the devastating recalls of spring 2007 appear to have cemented this association. Illustrating the impact of the recall on sales of natural pet products, natural supermarket pet department sales surged 18% in the first week of April vs. the last week of March 2007 and by a total of 22% during 2007, according to Packaged Facts’ August 2008 report, Natural Supermarket Pet Department Close-Up.

Although food represents the bulk of natural supermarket sales, the safety-related appeal of natural products also resonates in ingestible non-food categories such as supplements and chews, topical product categories like flea/tick spot-ons and shampoos, and even commodity categories like litter, where alternatives to traditional clay-based litter have been leading market growth for several years.

The strong showing for pet food overall in 2007 and 2008 also reflects the switch to higher-priced products including natural and organic varieties, according to Packaged Facts’ January 2009 report, Pet Food in the U.S. (see Chapter 1, “Economy, Value and Recession Resistance”) [Figure 3-1]

Specialty and Functional Food Formulas on the Ups

Specialty formula foods for dogs and cats are well established in the market, with 72% of dog owners and 76% of cat owners having purchased these products in the last three months, according to Packaged Facts’ February 2009 pet owner poll. Adult formulas are the most commonly chosen, with 33% of dog owners and 32% of cat owners having purchased these types of foods in the past three months, followed by other types including organic, puppy or kitten, weight-related, and senior. [Figure 3-3]

In the News


Put to the Test, U.S. Pet Market Vindicates Purported Recession-Resistant Label

New York, March 11, 2009 - While other industries crumble, the U.S. pet market continues to prove its much-touted recession-resistance as several pet specialty retail chains, top pet food marketers, veterinary hospitals, and pet pharmacies have in recent months reported strong financial performance during the latter portion of 2008. According to market research publisher Packaged Facts in the brand-new report, U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in Challenging Economic Times, the pet market’s foreseeable future is encouraging with the expected slow-down of 2009 ultimately being recouped as the economy begins to recover in 2010 and 2011. The report is based partly on February 2009 pet owner survey data polling 2,600 U.S. adults.

Packaged Facts forecasts that the pet market, which was a $51 billion business as of 2008, will eventually reach $57 billion by 2010, an improvement on the relatively meager projected total market growth of 6% for 2009 when the market is expected to finish at about $53 billion. Hardest hit by the 2009 recession will likely be the market’s two most discretionary categories—non-food pet supplies and pet services other than veterinary.

Health-related pet products, from high-grade foods to preventative veterinary care, are likely to emerge among the most recession-resistant because consumers typically view them as nondiscretionary expenditures that can be far less costly than the kinds of long-term health conditions that potentially result from poor nutrition or inadequate medical care. Packaged Facts identifies the resiliency of health-related pet products as a testament to one of the true enduring factors influencing the strength of the U.S. pet market overall: pet humanization and the human/animal bond facet associated with the trend.

“Packaged Facts views pet humanization as a dynamic, multifaceted shift that virtually guarantees steady pet market sales not just in 2009 and 2010, but well beyond,” says Tatjana Meerman, publisher of Packaged Facts. “Many pet owners view their pets as full-fledged members of the family, and would take no more lightly any serious cutbacks on spending for non-discretionary products and services than they would for their kids. In most cases, such cutbacks would only seriously be considered after owners have reduced spending on their own less essential needs.”

U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in Challenging Economic Times brings readers up to the minute regarding 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.

About Packaged Facts - Packaged Facts, a division of Market Research Group, publishes market intelligence on a wide range of consumer industries, including consumer goods and retailing, foods and beverages, demographics, pet, and financial products. Packaged Facts also offers a full range of custom research services.

 

  • Introduction
    • Scope of Report
      • Report Methodology
    • Overview
      • Economy, Value and Recession Resistance
      • Pet Humanization
        • Table 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
        • Table Number of New Pet Product Introductions: Reports and SKUs, 2005-2009
        • Table Top 20 Marketing Claims by Number of New Pet Product Reports, 2008
      • Illustration 1-1: Nestlé Purina's Friskies Flea Repellent Drops (France)
      • A $57 Billion Market by 2010
        • Table U.S. Pet Market Retail Sales by Category: 2009 and 2010 (in billions of dollars)
        • Table U.S. Pet Market Compound Annual Growth Rates: 2004-2008 vs. 2008-2013 (percent)
  • Humanization
    • More Than a Trend
      • A Three-Pronged Movement
        • Table Mean Number of Veterinary Visits: By Human/Animal Bond Among Dog and Cat Households, 2006
        • Table Mean Veterinary Expenditures: By Human/Animal Bond Among Dog and Cat Households, 2006 (in dollars)
      • 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
      • Illustration 2-6: Trade Advertising for Spa Lavish Your Pet's Botanical Grooming Collections
      • A Societal Shift
  • Health and Wellness
    • The Ultimate Value Appeal
      • Natural/Organic/Holistic Products
        • Table 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 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)
      • Functional Products
        • Table 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)
      • Holistic Labeling
      • Pet Services Riding Pet Health Wave
      • Complimentary/Holistic Pet Care
      • The Pet Insurance Boom
      • Ethical/Green Interest, Appeals
  • Competition
    • Overview/Market Structure
      • Additional Market Consolidation
        • Table PetSmart and Petco Combined Sales: 2000-2008 (in millions of dollars)
        • Table Timeline of U.S. Pet Product Marketer and Brand Acquisitions and Sales: 2001-2009
      • Franchising Altering Pet Services Terrain
      • Celebrity Marketing
      • Media Trends
      • 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
      • Retail Trends
        • Table Household Purchasing of Pet Products by Retail Channel: Total Purchasers and Sole Purchasers, 2006 vs. 2008 (percent of U.S. households with pets)
        • Table 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 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 Percent of Pet Owners Who Purchase Pet Food/Supplies by Retail Channel: Always, Often, Occasionally, February 2009 (percent of U.S. pet owners)
      • Internet Potential
  • Consumer Demographics
    • Number of Dog and Cat Households Trending Upward
      • Premium Demographics
      • The Boomer Factor
      • PONK (Pet Owner/No-Kid) Clout
      • Ethnic Energy

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