U.S Pet Owners July 2015 Research for Marketers by Marketers Driving analysis, insights and strategic thinking through tools, audience trends and customized quantitative and qualitative primary research. Learn more about Annalect s research team at annalect.com
2 Contents Introduction Pet Statistics Industry Sales & Spend Pet Care & Grooming Pet Humanization Conclusions & Implications Pet Case Studies Introduction Pet ownership crosses many demographic boundaries, with Americans of different ages and levels of wealth reporting spending on pets. Nearly 60% of U.S. households or about 82.5 million families own a pet, and many of them are spending a substantial amount of money on the care and feeding of their animals.
Pet Owner Statistics
Pet Owner Profile 4 Age Sex Marital Status 31% 17% 19% 20% 17% 14% 52% 48% 26% 57% 18-34 35-44 45-54 55-64 65-75 Men Women Married Single Sep/Div/Wid 83% Ethnicity Children Household Income 7% 3% 7% 13% 46% 54% 30% 36% 34% Children No Children Less than 50K 50-99K 100K+ Source: Simmons Winter 2014 Study
Pet families are caring for more than one pet in their households. 5 Number of U.S. Households that Own a Pet (millions) vs. Total Number of Pets Owned in the U.S. (millions) 85.8 77.8 95.5 54.4 42.9 6.1 14.3 2.5 7.5 12.3 1.3 9.5 9.3 4.9 5.4 12.4 Bird Cat Dog Horse Freshwater Fish Saltwater Fish Reptile Small Animals Number of U.S. Households that Own a Pet Total Number of Pets Owned in the U.S Source: 2015-2016 APPA National Pet Owners Survey
Among residents of the 50 states, Vermonters are more likely to have pets. 6 Top 10 pet-owning states (percentage of households that owned a pet) Top 10 states with the most dog owners (percentage of households that owned a dog) Top 10 states with the most cat owners (percentage of households that owned a cat) Top 10 pet-owning states (percentage of households that owned a pet) Top 10 states with the most dog owners (percentage of households that owned a dog) Vermont: 71% Arkansas: 48% Vermont: 50% Vermont: 71% Arkansas: 48% New Mexico: 68% New Mexico: 46% Maine: 46% New Mexico: 68% New Mexico: 46% South Dakota: 66% Kentucky: 46% Oregon: 40% South Dakota: 66% Kentucky: 46% Oregon: 64% Missouri: 46% South Dakota: 39% Oregon: 64% Missouri: 46% Maine: 63% West Virginia: 46% Washington: 39% Maine: 63% West Virginia: 46% Washington: 63% Mississippi: 45% West Virginia: 38% Washington: 63% Mississippi: 45% Arkansas: 62% Alabama: 44% Kentucky: 37% Arkansas: 62% Alabama: 44% West Virginia: 62% Tennessee: 44% Idaho: 35% West Virginia: 62% Tennessee: 44% Source: American Veterinary Medical Association (AVMA). The American Veterinary Medical Association (AVMA) study was based on results from 50,000 US households.
Industry Sales & Spend
Mars, Nestle and Blue Buffalo account for more than 90% of total pet food advertising spend in 2014. 8 2014 Pet food advertising spend (000) $190,585 $184,105 Total 2014 Pet Food AdSpend $588M $105,612 $60,921 $12,495 $10,409 $8,934 $6,090 $3,892 $1,378 Source: Monitor Plus
Nestle and Church & Dwight are 2014 top spenders in the pet supplies category. 9 2014 Pet Supplies Advertising Spend (000) $31,337 $31,237 $26,762 $24,404 Total 2014 Pet Supplies AdSpend $190M $14,840 $12,255 $9,332 $9,258 $5,005 $4,726 Church & Dwight Nestle Bayer Clorox Sanofi Perrigo Central Garden & Pet Blue Buffalo Barkbox Sumitomo Source: Monitor Plus
For 2015, it s estimated that $61 billion will be spent on pets in the U.S. 10 Pet Industry Expenditures ($Billions) $29 $30 $32 $34 $36 $39 $41 $43 $46 $48 $51 $53 $56 $58 $61 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* Source: PPA National Pet Owners Survey Statistics
Pet market sales across all categories continue to rise year over year. 11 Sales ($Billions) 2015 $23.04 $14.39 $15.73 $2.19 $5.24 2014 $22.62 $13.72 $15.25 $2.19 $4.73 2013 $21.26 $13.21 $14.21 $2.31 $4.54 2012 $20.46 $12.65 $13.67 $2.21 $4.16 2011 $19.85 $11.77 $13.41 $2.14 $3.79 Food Supplies/OTC medicine Vet Care Live Animal Purchases Pet Services: Grooming & Boarding Source: APPA National Pet Owners Survey Statistics & Statista
Pet market sales across all categories continue to rise year over year. 12 Annual Expenses for Dog & Cat Owners $551 $398 $333 $235 $196 $269 $246 $61 $51 $130 $83 $62 $33 $43 $47 $28 Dogs Cats Source: PPA National Pet Owners Survey Statistics
Pet Care & Grooming
14 Demand for pet grooming, boarding, training and walking is at an all-time high. This change is fueled by rising pet ownership, increased disposable income and changing consumer preferences regarding pet care Revenue ($m) Enterprises Employment (People) Wages ($m) Share of Revenue, by Business Type 2014 6,046 94,511 158,138 2,256 2015 6,415 100,873 168,363 2,414 2016 6,769 106,211 178,241 2,568 11% 2017 7,091 112,827 188,104 2,718 2018 7,406 118,388 197,703 2,865 2019 7,698 124,373 207,140 3,008 12% 42% 35% Growth 2009 2014 7% Revenue $6B Businesses 94,511 Pet Boarding Pet Grooming Pet Training Other Source: Ibis World
Pet medicines lead the fastest growing pet categories. Retailers and manufacturers are positively purring over sales figures particularly in hot categories like pet medicine, pet grooming, cat litter, dog treats and pet houses/carriers 15 Source: Nielsen
16 Pharmacies are now catering to both consumers and their furry friends. Walgreens has entered a partnership with ShotVet, a Florida-based veterinary company, to offer accessible, walk-up clinics for cats and dogs. Micro-chipping Lyme & Heartworm Test Strategic Deworming Vaccinations Source: Iconoculture
Pet Humanization
Pet ownership is a significant commitment. Pet owners spend an average of nine hours per week feeding, grooming and playing with their pet. 18 Weekly Activities, March 2014 Preparing Food/Feeding My Pet 94% Playing With My Pet 93% Cleaning Up After My Pet 83% Grooming/Cleaning My Pet 76% Exercising My Pet 70% Cleaning Cage/Aquarium Etc. 49% Obedience Training 36% Source: Mintel
Overall, US Pet owners prefer buying pet food from mass merchandisers and specialty chains. 19 Share of Pet Food Sales in the U.S. in 2014, by Distribution Channel Mass Merchandisers/Club 35% Pet Specialty Chains 25% Food Stores 18% Independent Pet Stores 11% Other 11% Source: Statista
Urban and Suburban pet owners prefer purchasing pet food at Petsmart 20 while rural pet owners are more likely to shop at Walmart. Rural Pet Owners Suburban Pet Owners Urban Pet Owners Walmart 46% 30% 30% Petsmart 17% 33% 38% Supermarkets 27% 28% 23% Petco 12% 24% 27% Supercenters/Discount stores other than Walmart 22% 21% 22% Source: Packaged Facts April/May 2014 Pet Owner Survey
21 Do you typically buy name-brand or store brand pet food? 12% 44% 44% Pet humanization spurs demand for premium foods and upscale products. Name Brand Something Else/I don't buy this. Store Brand/House Brand/Private Label Source: Statista-Harris Interactive
Pet taste preferences & price are leading purchase factors. 22 Pet owners say flavor/taste that appeals to their pet is most important. Other food aspects that rank high: price and made in the U.S. Purchase Decision Factors for Pet Food Top Five, February 2015 My pet/s would like the taste 45% Overall price 42% Made in the USA 36% Natural 32% Real meat is the first ingredient 27% Source: Lightspeed GMI/Mintel
23 Pet owners associate treats with love. 45% of pet owners buy/use pet treats to show affection for their pets; however, pet owners buy different brands because they hold treats and food to different standards: food has to provide nutrition while pet treats are for fun; an indulgence. Pet Treat Behaviors Top Five, February 2015 I look for unique flavors or ingredients in pet treats 22% I use pet treats as a reward (eg good behavior, tricks) 41% I give my pet(s) treats daily 41% Pet treats are my way of showing I love my pet 45% I give treats to my pet(s) just because 46% Source: Lightspeed GMI/Mintel
The humanization of pet food and vitamins brings new opportunities for retailers and CPG manufacturers. 24 In recent years, pet food trends have increasingly mimicked those of human food, such as "natural" ingredients and free-from ranges (e.g. gluten-free). In fact, about 30% of all global pet food introductions in 2010, as reported by Mintel s Global New Products Database, carried a no additives/preservatives claim, while about 17% were labeled all natural. PetSmart now sells energy bars from Purina, and supplements from GNC Wexford Farms Pet Food has released a new chicken and brown rice meal for dogs, which is designed to be eaten warm Rachael Ray now offers Nutrish Just 6 dog food and dog treats made with only six main ingredients (plus vitamins and minerals) Big Heart Pet Brands created the package for its Treats to Go product line, which includes Milk-Bone, Pup-Peroni and Nature s Recipe brand treats. Source: Datamonitor
25 New technology helps consumers watch, entertain, and track their pets. Wearables are becoming a popular way for owners to track and record their pets activities GPS Used to monitor a pet s location, GPS enabled devices such as the Motorola Scout 5000 allow owners to geo-fence their pets into a particular location. Cameras Devices such as the Petcube function like baby monitors for pets when consumers are away from home. Petcube also features an integrated laser that an owner can control from his or her phone, giving a cat something to chase around the house while its owner is away. 37% % of adults aged 25-34 that are interested in using technology to aid their pet s fitness or entertain their pets, compared to less than 20% of adults aged 55+. Activity Trackers Similar to fitness trackers like FitBit, the FitBark monitors the health of a pet by tracking its activity via an accelerometer sensor. Source: Mintel
26 Pet parents are finding their perfect pet online. Similar to eharmony and Match, companies such as AllPaws, a pet adoption site, is using the web to play matchmaker for humans and pets Source: Iconoculture
Conclusions & Implications
Conclusions & Implications 28 Conclusion Pet owners are expected to spend more than $61 billion dollars on their pets care and feeding in 2015. About half of pet owners are as concerned with the health and well-being of their pet as they are with that of their family The world is now fully digital and the rise of Pet & Parent Matching is upon us Many Hispanic households have a pet; however, they are less likely than other adults to place their pets on a pedestal to the degree that other adults do (or are perceived to do) Implication Marketers should create affordable products or services that reduce the burdens of ownership while increasing the convenience, satisfaction or joys of pet ownership To build brand awareness and loyalty, marketers need to leverage the use of online sites such as All Paws and Dognition Advertising and promotional efforts need to be inclusive of Hispanics/Hispanic culture. This may encourage more sales as this community tend to support advertisers who connect with them exclusively
Case Studies
Case Study 30 The Shelter Pet Project- ARF Ogilvy Awards: Gold, Government & nonprofit, 2015 USA Problem Solution Results Despite high rates of pet ownership in the US, relatively few pets are adopted from shelters, with the consequence that millions of potential pets are euthanized every year: this campaign aimed to improve adoption rates. 1. Consumer neuroscience methods were used to help guide a new campaign. 2. Research insights were used to find an optimum balance between high emotional engagement with the pets depicted in the creative and effective communication of brand and key messages. Since the Shelter Pet Project was implemented, national reporting has found a significant increase in adoption from shelters and rescues and a corresponding decrease in euthanasia. In addition, over 25% of visitors to the website were converted to key campaign goals such as searching for a pet in the online database, searching for a shelter, or learning more about pet adoption and the campaign. Source: Warc
Case Study Petplan: Return of The Top Dog IPA Effectiveness Awards, 2014 31 Problem Solution Results Following three decades of strong growth that had cemented Petplan Insurance as market leader, the brand was facing a series of new challengeseconomic factors including a decline in disposable income, an explosion in competition, the commoditization of the category and the rise of comparison sites. A 6-point brand pre-launch that included a new identity, a fresh focus online and new salience driving advertising (online advertising, contextual and behavioral targeting) Brand share leapt 5% in one year and the campaign generated a ROI of 1.94. Source: Warc
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