Pet Industry Trends 2008

(from APPMA) Last year our single most popular trends article was about the pet industry.  So we invited the author, Laura Bennett, CEO of Embrace Pet Insurance (pictured left), back for this guest post to update us on pet industry trends for 2008. Perhaps this article will trigger ideas for businesses you can start or larger companies you can partner up with.

By Laura Bennett 

The 2008 economics for pet-related small businesses will be affected by a continuing increase in pet-related spending, higher awareness of pet health, continued trading up to quality for pet accessories and food, and an about turn on donations to pet-related charities. Trends include:

1. Pet parents continue to upgrade their purchases

Spending on pet supplies and over-the-counter medicines continues to increase with $9.9 billion projected to be spent in 2007, an increase of 6.5% over 2006, according to the American Pet Products Manufacturers’ Association (APPMA). Spending in 2008 will likely exceed $10.5 billion. People will continue to spend above and beyond on their pets as the population ages and pets take the place of children at home. Pet parents are upgrading necessities, such as food, leashes, and bedding, and some luxuries are not so unusual any more – how often do you see a dog dressed up to go out these days? High-end specialty pet stores continue to thrive despite competition from the big box stores as passionate pet owners look for selection, style, and a unique shopping experience.

2. Pet services for your pets grow in abundance

More than $2.9 billion dollars will be spent on pet services in 2007 according to the APPMA, which will likely continue to grow at around 7% for 2008. Again, pet parents are including their pets in their own lifestyles so visits to the spa, exercise regimes, and hotel-quality accommodations for day care are becoming more common place in urban areas. As we expected, we are seeing more services partnering together centered around pets, such as the Ritz-Carlton and the Barkley Pet Hotel and Day Spa providing pampering for your pet while you kick back in luxury. We also expect to see groomers, doggie daycares, pet hotels, pet insurance companies, lawyers providing pet trusts, and funeral homes providing services for pets also joining forces more and more in 2008.

3. Best friends in life and death

The year 2007 marked the death of Leona Helmsley and the $12 million trust fund she left for her dog, Trouble. New York is not the only state to allow money to be left to care for pets. In 2007, Ohio joined 37 other states plus the District of Columbia in passing a law allowing pet parents to set up pet trusts to take care of pets when they die. As the pet owning population ages, pet trusts will become more prominent. Greater awareness of how to provide for a pet after you are gone will lead to more and more elderly people keeping companion animals who might not have otherwise done so.4. Growing interest in pet health care

Pet parents are taking control of their pets’ health care as they do their own children. Online resources continue to improve in quantity and quality (Wikipedia is a good place to start) and educated pet owners are arming themselves to guide their pets’ care. Technology from the human world continues to make its way into the veterinary tool kit including non-invasive surgeries, human medical devices and services being applied to pets, super-premium foods aimed at specific ailments, and alternative therapies, such as acupuncture, massage, and behavioral therapies. High end diagnostics, such as MRIs, are becoming more widely available for pets. Online veterinary pharmaceuticals continue to grow but veterinarians are fighting back by dropping their own drug prices. Pet lovers want, and are demanding, the same treatment options for their pets as they can get for themselves.

(Note from happytails : to find out if you’re dog is healthy take this online quiz on

5. Pet insurance starts to go mainstream

We estimate the 2007 market size for pet insurance in the U.S. to be approximately $195 million in premium, up from $161 million in 2006, a 21% increase, and we expect 2008 growth to increase. We know of at least 2 more companies launching in 2008, adding to the current 9 pet insurance providers in the U.S. One of these companies is a mainstream pet food brand that has had an interest in pet insurance for many years. New entrants with money is good news for the industry as bigger marketing budgets means increasing awareness for pet insurance in general. Look for some of the largest big box retailers to jump on the pet insurance bandwagon later in 2008, which will start to push the mass awareness required to take pet insurance mainstream.

6. Hybrids take center stage

If you see a rather woolly Labrador playing at your local dog park, it is more likely to be a planned hybrid called a Labradoodle than from an accidental litter. Hybrid dogs are muscling in on the purebred scene, much to the chagrin of some and the delight of others, and they are garnering a lot of attention from pet parents looking for something that might be the best of two breeds. The year 2007 saw the popularity of hybrids enter the mainstream (Puggles, Maltipoos and Golden Doodles are some examples) but 2008 will see the rapid growth of the puppy farm hybrid to take advantage of the inflated prices people are paying for these dogs.

The business environment will start to become more challenging as a multitude of new players enter the market. Savvy small businesses will take advantage of change to successfully place themselves uniquely in the market. Trends here include:7. Increased competition from larger players

Larger companies are beginning to recognize the economic potential of the pet industry. Target and Walmart are both expanding their pet selection and using pets in their advertising. Big box pet specialty retailers, Petco and PetSmart, continue to grow. PetSmart is making a major push into pet hotels (with over 50 of a projected 435 open thus far). These companies continue to move into the full service arena to encourage one-stop shopping and customer loyalty.

8. Large companies buying smaller players or interacting with small businesses behind the scenes, via monetary investment and/or marketing alliances

Not only are the more obvious pet-related giants, such as Purina, Hills, and Iams engaged in this activity (for example, Iams owns an 8.9% interest in Veterinary Pet Insurance and Purina launched a pet insurance product in Canada in 2007), but also other more surprising companies such as paper product giant Kimberly Clark, which is very interested in expanding its revenue stream into the supermarket pet aisle.

9. Increased online sophistication from new pet-related businesses in ecommerce, design, and usability

Traditionally, small business websites have been set up by pet lovers with little thought on design, target audience, and content. Newer players, such as Pawspot noted last year, and DogCars new in 2007 (and we continue to love Urbanhound), are beginning to be more sophisticated in design and ecommerce, reaching their target audience via website usability, SEO, paid search, and word of mouth. These websites are still in the vast minority of a fragmented pet marketplace but gives a savvy small business an opportunity to stand out from the crowd.

10. Pet-related blogs continue to grow their influence.

If you ever doubted the power of blogs in the pet world, you only need look at the impact of blogs during the pet food recall in the middle of 2007. Blogs such as Itchmo, Pet Connection, and Pet Sit USA were deluged by literally millions of people looking for information on the recall. The bloggers responded with up to the minute information and constant pressure on the authorities as the situation unfolded. While the web hits have died down, these bloggers have been stepped up a notch in the eyes of pet parents looking for quality information.And one final bonus trend that indicates the sentiment of the pet-related customer …

11. More people traveling with their petsFrom day trips with the dogs in the back of the car, to trips abroad with your pets, more and more people are including their cats and dogs in their travels. As a result, more hotels, such as the Comfort Inn all the way up to the Westin are accommodating pets beyond just allowing them on the premises. This gives small businesses the opportunity to provide services to local hotels for pets or for accessories to make traveling even easier.

(Note from happytails: check out happytails’ Travel Dog Collection & Sleepytime Tonic– perfect for traveling with your pet)

* * * * *About the author: Laura Bennett is the CEO of Embrace Pet Insurance. Over her career working in the insurance industry in Dublin, Ireland, and Toronto, Canada, she eventually landed in the United States where along with Alex Krooglik, the two of them founded Embrace Pet Insurance to combine their love of pets, the desire for entrepreneurship, and Laura’s expertise in the insurance industry. Laura also writes a blog on pet-related issues, the Embrace Pet Insurance blog


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  1. Acupuncture can also relieve the physical discomforts that accompany eating disorders!


  2. In terms of alternative therapies, let’s not forget animal chiropractic. The woman I use for my pooch is so booked up that we have to book weeks ahead – otherwise we have to hope that we can get in on a cancellation. I know of another animal chiro locally who is also extremely busy.

    My dog injured her shoulder play-wrestling with her best friend as an ‘adolescent’ and the chiropractic treatments had her back at the local leash-free park in no time … so I can vouch from 1st-hand experience that it really does help!


  3. In addition, pet owners are looking for a simple, efficient and affordable way to keep fido clean as often as once a week or even after every visit to the local dog park. Coin-operated self serve dog washes are popping up all over Florida. For about $10, you get everything you need to wash and dry the dog in about 12-15 minutes without the clean-up and most of them are outside open 24×7. I see this as a trend in all kinds of market segments throughout the U.S. It really helps me out with my 100 lbs lab. Be on the lookout for them.


  4. Talking about pet statistics and trends…the dog boarding industry is undergoing major changes. The facilities are becoming more like real hotels for people offering dog massages, dog spas, dog facials and dog fitness…

    One hotel in particular that is above and beyond any limits or anything yet seen by the pet industry and with the new type of dog hotel and level of service other dog boarding facilities will have to compete or become obsolete.

    Check out

    or the youtube video that shows this dog hotel at

    you’ll see a 5 star dog hotel & spa for dogs…. that costs nearly 3 million to complete…. if that doesn’t say what people are spending on luxury and making dogs happy then I wouldn’t know what does…. Being able to watch your dog 24hrs a day on your iphone/internet is another neat feature and selecting your dogs TV programs is a bit eccentric but none-the less people do say their dogs like to watch animal planet lol! The personal concierge they offer only adds another over the top amenity.
    When people miss their dogs they even have a Bone Booth to talk to their dog on the phone in real-time….
    It is going to be interesting to see how this dog boarding facility impacts the market.


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