The pet business is exploding Photocredit:
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The pet industry has been experiencing explosive growth. According to The American Pet Products Association, almost 85 million households have a pet and over the last 30 years pet ownership has gone from 56% to 68% of all households. Some of the changes in pet ownership are due to technology and the advent of online purchasing. But most of the growth is because of changes in culture. As millennial and Generation Z consumers have come into adulthood, they have embraced the pet-owning and pet-loving lifestyles to a far greater extent than their elders. While baby boomers account for 32% of pets owned, households headed by younger cohorts account for 62% of pet ownership.
I recently caught up with Phillip Cooper, a pet industry expert who has consulted for some of the best and biggest pet industry leaders. He talked about how those cultural changes are affecting the what consumers want now when they own pets. The fastest-growing pet businesses are taking advantage of these trends:
- Food – Consumers don’t want traditional pet foods. They want healthy ingredients and they want to understand the ingredients list. They are opting for more fresh, frozen and made-to-order diets for their pets. These products cost more and consumers are trading up.
- Online private brands – Amazon and Chewy.com are promoting their own brands to disrupt the market and eliminate middleman margins. Other smaller, niche players are likewise creating brands with their own identity.
- Treats – Pet parents feed their pets 8-10 treats a day and the trends in which treats are succeeding are following the same trends as pet food.
- Technology – We are seeing pet services and conveniences developing along the lines of services for people. Just as with people, the smartphone has enabled this change.
- Increased services – There is more attention being paid to pet grooming, pet care, pet transportation, pet hotels and many others.
- End of Life – There are a great deal more products and services for pets as they age and pass away. Palliative services for terminally ill pets, pet cemeteries and cremation, grief consulting are some examples.
- Availability – Mass merchants, grocery and even dollar stores are adding premium pet foods and other products so that it’s available at many more points of distribution than ever before.
- DTC – The direct-to-consumer trend has reached the pet industry in a big way. Many brands are following their human product counterparts and selling products without going through a traditional multi-brand retailer.
There’s a conference in Austin, TX taking place at the beginning of next month called Pets & Money that brings together early-stage pet industry innovators and investors. In advance of the conference, the organizers ran a competition using a panel of industry experts as judges to choose 12 stars that will be highlighted at the conference. The companies they chose are good indications of the trends that Cooper is talking about. Here they are:
Pet Plate Customer
Courtesy Pet Plate
Pet Plate is a subscription service that sells premium, human-grade food for dogs. The service can be used either as a supplement to a diet or ideally as a dog’s entire diet plan. Pet Plate says its retention is higher than most subscription services because once a dog likes its diet, the pet parent is unlikely to switch. The service is not focused on urban millennial consumers, the company says its data shows that it crosses into many other demographic groups which gives it a huge potential market. The product is shipped frozen in custom, portion-sized containers. Pet Plate has already received venture capital backing.
If you’re interested in pet wellness, or you’re a user of Seventh Generation products in your home, then Wondercide is for you. Wondercide makes “safe and effective pest control for pets, families and homes.” Wondercide is sold primarily direct-to-consumer online and in pet specialty retailers nationwide. It is female-founded, will be ten years old in 2019 and has raised very little capital, no institutional money, and has grown by double- or triple-digits every year except one. Until recently, Wondercide had almost no marketing budget, its business has grown primarily by word-of-mouth.
DOGTV is, well, TV for dogs. A high percentage of dog owners leave their dogs at home alone for hours at a time and about half of those leave a tv or radio on for the dog’s time alone to be more pleasant. But human entertainment is not designed for dogs and that’s what DOGTV seeks to cure. Using numerous studies, DOGTV has created patented programming that dogs can watch, learn from and be entertained. Both the style of the programming and the images have been adapted to suit dogs’ understanding. The service is available by subscription online as well as on DirecTV, DishTV, Comcast, Cox and RCN.
Dig calls itself, “the dog person’s dating app.” The dating app universe has become increasingly niche-focused and users are usually active on several apps simultaneously. Dig offers the possibility of a relationship with someone who already has a relationship in their home or who wants to get a dog in the future. The app also helps plan dog-friendly dates. Users are 65% women which is the opposite proportion from most dating apps. The app (iOS and Android) is usable anywhere and Dig’s target markets of Austin, Boston, Chicago, Detroit, New Orleans, New York and San Francisco have had 154,000 unique users so far.
KitNipBox is a subscription box that comes monthly to cat owners’ homes. It has high-quality toys, all-natural treats and other fun, healthy products for cats. While this market has been widely developed for dogs, there is hardly anyone in the business for cats. As a result, the average customer remains subscribed for far longer than they do in most subscription companies, KitNipBox is profitable and has raised almost no outside capital.
Grand PooBox product
Courtesy Grand PooBox
Grand PooBox has introduced a kitty litter box that has a number of innovative features. First, it has good design so that it doesn’t have to be relegated to a closet or the bathroom, it’s attractive in any room. Second, it uses half as much kitty litter as traditional litter boxes. Finally, it has an internal grated ramp that cats walk on when they exit the litter box. The ramp removes litter from the cat’s paws and leaves little or no residue of kitty litter near the box or in the room. Right now the product is offered primarily direct-to-consumer for $85 and it’s made in the USA.
Happy SpotOn.Pet customer
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When you want to take your pet in an Uber or Lyft, things can get complicated quickly. Drivers are not required to take pets and the result can be delays, canceled rides and lots of inconvenience. SpotOn.Pet has the answer. Their drivers won’t reject your pet and they will provide protective seat covers for the car and seat belts (actually a harness) for your dog or cat. The price is comparable to Uber Black and the drivers receive 85% of the cost of the ride, making it much more attractive for them to join and enabling SpotOn.Pet to ramp up quickly. The service has just launched in New York and will be expanding to other cities soon.
Toletta is a kitty litter box that monitors your cat’s health passively. When the cat enters the litter box, Toletta can recognize that it’s your cat and distinguish between multiple cats using facial recognition. It monitors cats’ weight, urine volume and how often they use the litter box. It connects the data to an app on your smartphone and alerts you to health risks for your cat including urinary tract infections (very common), kidney disease and obesity. When it comes to market in 2019, there will be one price for the device and a low monthly subscription fee for the app monitoring.
Happy AnimalBiome user
According to Animal Biome, 20% of people suffer from chronic digestive conditions like colitis, infalmmatory bowel and other disorders. A similar percent of pets have these disorders too and many more suffer from food sensitivities. Animal Biome’s target market is consumers who understand proactive wellness to prevent and treat these conditions. Animal Biome offers gut health testing and supplements for pets to be healthier and 80% of cats and dogs that take their supplements have a measurable and beneficial shift in their microbiome with improved gut function.
Mixlab ingredients, products and packaging
Mixlab provides personalized medications and wellness products for pets. When a prescription is received from a vet, Mixlab customizes the dosage for the pet’s size and type. Mixlab can often give the pet parent the opportunity to have the medication mixed into a flavored treat or other form that’s easier to administer. Mixlab presents its services to vets who recommend it to their pet owners. So far, a majority of the vets who have met a Mixlab representative have recommended it to their pet owners. Mixlab is only available in New York, New Jersey and Connecticut and is planning to expand throughout the country.
Pupjoy product and customer
Pupjoy uses technology and data to offer mass customization of pet products. Its first offering is a subscription box that is highly customizable based on users’ preferences and dogs’ sensitivities and include treats, chews, toys, supplements, accessories as well as products for preventive care. Pupjoy guarantees a retail value in its subscription boxes that is at least double the price paid by the consumer. Pupjoy also sells customized boxes and products wholesale for corporate gifts and loyalty programs and eventually plans to offer customized pet food.
Puppy Mama user
Courtesy Puppy Mama
Theresa Piasta told me the company she founded, Puppy Mama, “is a platform for women to connect with each other and share how their dogs help them and bring joy to their lives.” In creating a community online for women who love their dogs, Puppy Mama advocates for a more dog-friendly world. With its brand, Puppy Mama drives revenue through digital advertising and sales of branded apparel and other products in the Puppy Mama ecommerce store.