With all the news on TV about impending economic doom and gloom I thought it important to discuss how this news impacts the pet industry.

Recent indicators show that the pet industry, while not impervious to the overall economy, has the ability to rise above the fray – and the current trends are a good case in point. The spending trends are such that the industry looks set to continue to prosper through 2008. This trend, however, is going to be difficult to maintain if the general economic conditions deteriorate into 2009 and 2010.

There has been plenty of talk about a “credit crunch” in the past 6 months, as subprime lenders feel the effectives of years of loose lending guidelines. While this may be a form of a “credit crunch”, it certainly isn’t the more dangerous liquidity crisis that stems from questionable monetary policy. This is actually good news for your pet business because it means people will still have the cash to spend on their pets should they want to.

A liquidity crisis would be far worse than a credit crunch for petrepreneurs. During a liquidity crisis, pet owners would find that cash is just more difficult to come by and purely discretionary purchases, even for their pets, would be negatively impacted. Tough cash situations usually means switches to lower priced food products, delaying travel (no sitting serviced needed), home grooming, and purchasing fewer toys and treats for their furry family.

The 2007 credit crunch could be the first of several waves of poor economic news to hit us. While we can take comfort in the knowledge that the pet industry is beating the current general economic trends, we should use this time to strategically position ourselves and our businesses for success and profitability.

Here’s a PR Newswire story that shows pet owners indicate they would cut back on luxury items to maintain their level of care of their furry friends.

Check out the bottom of the story – you can call and get the full survey results…

As the economy tightens the market for pet products and services is still growing, with households earning at least $70,000 tripling their pet related expenditures to over $18.6 billion dollars – accounting for more than half of all U.S. spending for pet supplies, pet services and vet services, according to the latest Packaged Facts report.

This key demographic now accounts for more than 60% of all pet services purchased.

The report points out that while some of the growth in this demographic’s market share can be attributed to a general increase in upper income families, it also shows the success that the sharp marketers within the pet industry have had capitalizing on the recent trend of the humanization of pets (also described as “functional pampering”).

“Products for pets are being made to resemble those for humans,” said Tatjana Meerman, publisher of Packaged Facts. “Especially among aging Baby Boomers, empty nesters, DINKs [dual-income, no kids couples] and singles, humanization is fueling consumer demand for premium products and services, including those bearing familiar brand names crossing over from the human side.”

This “pets as people” trend, both as seen in the product/service offerings and the accompanying marketing pitches, attempts to lead pet owners to think in human terms as they shop for products for their pets. This can be seen in the recent huge growth in licensed products (one of the biggest hits of the past 10 years in the collar segment was Coastal Products licensing agreement with Harley Davidson — making millions for both companies) and marketing terms like “organic” and “all-natural.”

Supporting this market shift toward “functional pampering” is another demographic factor, the aging of American pets. Very similar to the highly targeted aging “babyboom” trend, I believe the “aging pet population” will emerge as the single most important pet market sales driver in 2008 and beyond.

I believe this trend will continue because as pets live longer, owners (especially in the upper income households) spend more to care for them and have more time with them to develop that all important bond.

Add to this the fact that as these pets are aging, so are their owners (which further strengthens this bond and often leads to the owners ‘treating’ their pets the way they hope they are cared for in their final years).
Studies have also shown that older (higher income) pet owners are more likely then younger pet owners to be “highly dependent on this mutual, and increasingly PRIMARY, source of companionship.”

This demographic knowledge is VERY IMPORTANT for online pet product, service and information petrepreneurs. Forrester Research and Shop.org reporting that online shopping appeals more to premium pet households, being 48% more likely than average to buy pet products online.

The Forrester/Shop report characterizes one out of every three dog- or cat-owning households as a premium household (defined as single-person households with annual income of $50k or better and two-person households with annual incomes of $75k or better.

Where children were once considered the primary pet market driver, these new demographics studies (and census bureau data that shows 4 out of 5 U.S. households had no children in 2000) demonstrate that households without children now purchase over 70% of all pet products and services (up from 45% just 6 years ago).

It makes sense (having three kids at home) that people without children can buy more – and more expensive – pet products and services because they have more discretionary income and time.

Take these factors into account as you create your products/service or profit pulling niche reports.

I have just added almost every Pet Industry event for 2008 to the events calendar on the blog.

You can view all the events by clicking on the date in the calendar of by following this link:

Industry Events

You can drill down into:

• Industry Trade Shows
• International Events
• Consumer Expo’s & Shows
• Grooming events will be added shortly

Let me know if I am missing one of your local area events, just comment on this post and I will add it to the event calendar.

A new article published in Progressive Grocer further show the trends toward all-natural, holisitic products.

“Alternative pet foods are emerging as the primary beneficiaries of the recent pet food recall crisis, and could enjoy double-digit growth rates over the next two years as traditional mass-produced foods suffer from the perception they might be less safe, according to a new study by market research firm Packaged Facts.

“Billions of dollars in pet food brand sales are now up for grabs as a result of the pet food recall crisis and its ongoing effects as consumers seek out safer, higher quality foods for their pets,” noted David Lummis, senior pet market analyst at Packaged Facts. “This is a highly emotional issue for many pet food companies, with many now actively reexamining and restructuring their operations as a result of the recall.”

Indeed, Packaged Facts estimates there will be a brand shift in the market worth $1.3 billion to $4.3 billion in pet food sales, given that the brands used by approximately one in six pet owners were part of the recall”

Take a look at this great business model that capitalizes on this new trend Click Here