The Pet Industry: Food, Accessories, Health Products and Services

Report Highlights

• In 2003, Americans spent nearly $30 billion on their pets. Growing at an average annual rate (AAGR) of 3.9%, the market for pet care will reach almost $36.3 billion by 2008.
• Pet foods, growing at an AAGR of 3.6% through 2008, will remain the largest segment, representing about 46% of the market.
• Veterinary services will demonstrate the fastest growth at an AAGR of 4.7% through 2008, and the segment will increase from $7.8 billion in 2003 to $9.8 billion.
• Expenditures on other pet services, such as grooming, training, breeding and pet sitting, will grow more slowly, at an AAGR of 3.4% to $2.7 billion in 2008.

INTRODUCTION

The pet industry is a major segment of the U.S. economy. In 2003, American pet owners spent more than $28.9 billion on their small companions. Recent growth in all segments of the pet industry has provided an opportunity for both existing players and new entrants who 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 and globalization of the American economy have transformed the maturing pet industry into a dynamic, highly competitive environment.

This BCC report analyzes these new developments and their potential impact on the future of the pet industry. The study provides a comprehensive analysis of all segments of the pet industry in the U.S. and forecasts future trends. Existing reports usually report_highlights either pet food or pet supplies segments, and within these segments, focus on dog and cat products. To BCC’s knowledge, no existing report deals with the pet services segment. It’s goal is to provide an overview of the entire industry and trace, in detail, the developments in all animal segments, including bird, fish, small mammal and reptile products. The report covers the U.S. market for pet food, pet services and pet supplies.

Due to the increasing importance of international markets for U.S. manufacturers and retailers, BCC also provides an extensive analysis of global trends, with an overview of key international markets for U.S. pet products. The international section of the report is significantly expanded as compared to the previous two versions.

SCOPE OF STUDY

The report contains:

• An extensive overview of pets and their owner demographics
• An overview of the pet industry
• Market analyses of the pet food, pet services and pet supplies segments, with forecasts through 2008
• Expanded international coverage
• Market share data for major industry players
• Listings of U.S. and foreign trade associations as well as trade publications.

METHODOLOGY AND INFORMATION SOURCES

For industry and product segments, historical growth trends from 1992 through 2002, as well as estimates for 2003, were presented. For pet ownership and pet food, growth trends since 1992 are analyzed. For pet supplies and services, data is presented since 1992. Market forecasts for 2008 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 2003 and beyond are BCC, Inc. estimates.

BCC, Inc. 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.

ANALYST'S CREDENTIALS

Julia Dvorko has worked as a research analyst for BCC since 1997, completing three reports on the pet industry. Since 1993, she has worked on multiple research and consulting projects for several Fortune 500 companies and a number of small es in the U.S., Ukraine and Russia. At present she acts as a Program Director for the Massachusetts Export Center where she consults small and medium-sized Massachusetts es on international strategy and marketing programs development, as well as logistical, regulatory and financial issues when selling overseas. Previously, she worked at the Massachusetts Small Development Center in Amherst, Massachusetts, two joint ventures in Russia and a division of Volvo in the North of Sweden. Julia has a MBA degree from the University of Massachusetts, and a Ph.D. from Moscow State University.