Portrait of a young woman with her dog using mobile phone at home.
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This industry seems to defy gravity. Continual growth over the past 50 years and it shows no signs of slowing down. With people treating their pets more and more like family members, the pet industry continues to see a rise in niche and premium products and services. The one thread tying almost all these trends together is: pet health and wellness. Pet owners are more eager than ever to give their pets everything they need to keep them healthy and happy. This still creates yet more room for entrepreneurs and small business owners.
The pet industry in the USA reached a milestone in 2020, with total sales of $103.6 billion, a historic high, according to the American Pet Products Association (APPA) State of the Industry Report. This compares to sales of $48 billion in 2010. That is more than a 100% increase in revenue in just ten years in what you might consider to be a relatively boring industry!
Here are five insights for entrepreneurs into which products and trends will continue to drive the pet industry.
Pet supplements on the rise: The pet supplement industry has been growing rapidly as pet owners treat their dogs like a member of the family, almost mirroring human behavior. Supplements, vitamins, probiotics and now CBD. Amazingly, there is a variety of CBD products emerging for dogs. Pay attention to what human trends for health might be as it might crossover to their pets.
New product innovation: If you thought product innovation was limited to humans, you would be wrong. We are starting to see significant amounts of innovation in pet product research and development. Specifically, entrepreneurs aren’t simply launching variations of existing products. They’re creating entirely new pet care product categories. For example: pet wipes. Pet wipes are essentially moist towelettes used on pets after going to the bathroom. Another relatively new pet product category is pet toothpaste.
High-end products on the rise: Pet owners are an interesting breed. If it will make their pets happier, there’s a group of owners who will buy it. And that includes relatively expensive luxury products. For example, there is a startup that makes frozen yogurt for dogs that’s sold in Whole Foods stores nationwide. A new brand of kitty litter changes color based on a cat’s urine pH levels and the company claims that the product helps cat owners detect illnesses in their cats.
Pet niches are emerging: In any mature industry, you either take share from the competitors or innovate. So, pet food brands are innovating into niches like new types of pet food. One rapidly growing product food niche is freeze dried dog food. Freeze dried dog food is just like it sounds; it’s dog food that’s frozen to extend its shelf life. These products tend to have fresh or raw ingredients, hence the need to freeze them. With the rise in human consumption of protein, keep your eye on “keto” dog food.
Insure that pet: It seems that anything humans need, pets need. So, perhaps it’s not surprising that pet insurance is on the rise. The global pet insurance market size was estimated at $3.8 billion in 2019 and is expected to reach $4.4 billion in 2020 according to Grand View Research. Even Lemonade, the AI-powered insurer recently launched its own pet insurance coverage.
While pets have been around forever, they have steadily grown into becoming a family member. Combine that trend with Millennials and now Gen-Z perhaps waiting longer to get married and have children. However, both populations have embraced the notion that pets can be like little children. Notwithstanding Covid, pet sales and adoption have continued to grow and show no signs of slowing down. If you like large industries that show consistent steady growth with a built-in marketplace and niche innovation is rewarded, then you might more closely examine the pet industry for a possible startup opportunity.
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