REPORT HIGHLIGHTS

• In 2000, Americans were expected to spend over $27 billion on their pets. Growing at an average annual rate (AAGR) of 4.3%, this market will reach $33.5 billion in 2005. These expenditures included $12.8 billion spent on pet food, about $9 billion spent on pet services and over $5 billion spent on pet supplies
• Pet foods, growing at an AAGR of 4.2% through the period, will remain the largest segment, representing over 47% of the market. Veterinary services will grow at an AAGR of 4.5% through 2005, from $7 billion in 2000 to nearly $8.8 billion. Expenditures on pet supplies is the fastest growing, at an AAGR of 5%.
• Exports of U.S. produced pet products will grow at an AAGR of 4.8% to nearly $1 billion in 2005.
• The pet industry is expected to grow at 4.3% annually to reach $33.5 billion by the year 2005, with pet supplies leading the growth.

REPORT SCOPE

INTRODUCTION

REASONS FOR THIS STUDY AND ITS IMPORTANCE

The pet industry is a major segment of the U.S. economy. In 1999, American pet owners spent over $26 billion on their small companions, and in 2000, this figure is expected to surpass $27 billion. Recent growth in all segments of the pet industry has provided an opportunity for both existing players and new entrants that have been increasingly active since the beginning of the 1990s. Changing demographics, new lifestyle trends, and a shift in American attitudes towards pets have led to a significant increase in consumer expenditures during the past five years. A growing number of players; consolidation among manufacturers, retailers, and service providers; globalization of the American economy; and the explosive growth of e-commerce have transformed the maturing pet industry into a dynamic, highly competitive environment. This BCC, Inc. report analyzes these new developments and their potential impact on the future of the pet industry.

OBJECTIVES OF THIS STUDY AND ITS CONTRIBUTION

The objective of this BCC, Inc. study is to provide a comprehensive analysis of all segments of the pet industry in the U.S. and to forecast future trends. The existing reports usually report_highlights either pet food or pet supplies segments — and within these segments, focus on dog and cat products. To our knowledge, no existing report deals with the pet services segment. Our goal was to give an overview of the entire industry and to trace the developments in all animal segments, including bird, fish, small mammal, and reptile products in more detail. Due to the increasing importance of international markets for U.S. manufacturers and retailers, we also provided extensive export and import data for pet foods and pet supplies for the past five years, as well as an overview of major international markets for U.S. pet products. Several sections are also dedicated to e-commerce issues, which are at the forefront of industry developments.

THE AUDIENCE FOR THIS REPORT

The report is intended for executives and consultants in the pet food, pet supplies, veterinary, and other pet services segments of the pet industry. It will also be of interest to financial analysts, venture capitalists, and investors.

SCOPE AND CONTENT OF THE REPORT

This report covers the market for pet food, pet services, and pet supplies in the U.S. and analyzes major foreign markets for U.S. pet products. The report is divided into eight sections:

1. Introduction
2. Summary
3. Pets and Their Owners
4. Pet Industry Overview
5. Pet Food Segment
6. Pet Services Segment
7. Pet Supplies Segment
8. International Aspects

In addition, the report includes three Appendices:

1. U.S. Pet Industry Trade Associations
2. Foreign Pet Industry Trade Associations
3. Pet Industry Trade Publications

METHODOLOGY AND INFORMATION SOURCES

For industry and product segments, historical growth trends from 1994 through 2000 were presented. For pet ownership and pet food, growth trends since 1990 are analyzed. For pet supplies, the data is presented since 1992. Market forecasts for 2004 and 2005 are compounded on an annual basis. Forecasts take into account changing demographics, consumer trends, increased competition and pressure on prices, historic expenditure trends during economic recessions and upswings, and other economic trends. All sales are in current dollars, and Table figures for the year 2000 and beyond are BCC, Inc. estimates.

BCC analyzed information from trade and mainstream publications, industry and pet ownership surveys, company directories and databases, annual reports, and government sources. The U.S. Government Census, Consumer Expenditure Surveys from Bureau of Labor Statistics, and U.S. Department of Commerce provided demographic, consumer expenditure trends, and foreign trade data. Personal interviews were conducted with representatives from major companies, U.S. trade associations and publications, industry experts, and government officials. Foreign government offices, trade associations, and trade publications were contacted for information on international markets.

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