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With the onset of COVID-19, the past few months have been some of the most economically challenging in recent memory. The retail sector, in particular, has been one of the hardest hit, with many businesses shuttered indefinitely and some not knowing if they will ever recover.
The pet industry is large, forecasted to reach $281 billion by 2023, according to market research firm Edge by Ascential. Moreover, it has followed a steady trajectory of growth over the past 30 years. With pets increasingly viewed as members of the family (even often taking the place of children as millennials wait longer to get married and have kids), spending on pet-care has consistently grown. For example, annual household spending on pet food among pet owners rose 36 percent between 2007 and 2017, according to Nielsen.
In addition, the pet industry has long been recognized as a recession-resistant category. In the past two recessionary dips of 2001 and 2008, pet spending actually grew unabated each year by 7 percent and 5 percent respectively. But it’s important to recognize that the current recession is a different animal (pun intended) due to the stay-at-home orders instituted across the country.
For the first time, half of the people employed pre-COVID-19 have been working from home, trading long commutes for quarantined conference calls, clearing social calendars, and yearning for emotional connection, which for many, has been filled by their pets.
2. Pets offer comfort.
As pet owners know, there’s no better source of an emotional connection than cohabitating with a dog or cat. Not only do pets provide companionship, comfort, and support, they also fulfill our human need for physical touch. According to scientific research, interacting with a dog or cat lowers your blood pressure and cortisol levels, while stimulating oxytocin, serotonin, and dopamine, chemicals that help our bodies relax.
Stay-at-home orders created a perfect environment for pet ownership. Long hours spent in the office that once discouraged potential parents from adopting were replaced by the possibility of being present while working remotely. Consequently, animal adoption rates skyrocketed more than 110 percent and fostering grew 197 percemt comparatively year-over-year, according to Pethealth Inc.. Many New York City shelters and rescue organizations saw application rates increase by 1,000 percent. For existing pet parents, the stay-at-home rules offered a chance to spend more meaningful time and invest more deeply in their pets.
3. Pets need care.
As the popularity of pet ownership has increased so has demand for pet care products, such as extra toys, treats, health care, and other assorted pet accessories. Add to this the growing availability of pet supplies online (the sector saw 11.3% percent growth for online sales in 2019 alone) plus the opportunity to connect with veterinarians and other professionals remotely via telehealth and other online options; the industry was well-positioned to take advantage of the COVID-19-induced circumstances.
All of this has meant a breakout start to 2020 for the pet industry. At Small Door Veterinary, from February to May, we’ve seen a 78 percent increase in membership, alongside a 174% uptick in telemedicine usage and a 1,053% increase in web traffic to our online Learning Center, as isolated pet owners look for trusted resources and remote care.
4. Pets are a good investment.
For those looking to enter the pet industry, there are many factors to consider. With pet ownership and consumer spending on a rapid ascent, investment in this sector will continue to keep pace. Venture investors are actively seeking counter-cyclical categories in the age of coronavirus. Sound business plans should incorporate a clear value proposition, unique delivery mechanism, and competitive pricing structure and be sure to consider integrating subject matter experts such as trained pet professionals into your advisory board to validate medical claims, product concepts, and generally lend credibility if you’re new to the sector.
Over the past decade, pet food, toys, accessories, health offerings, and training tools have also greatly advanced to meet consumer demand for products that not only offer added health or psychological benefits to pets but also come with an aspirational lens fit for Instagram. Disruptive pet care brands such as Maev, Wild One, Sundays for Dogs, and West + Willow are just a few examples.
New entrants to the pet category should rethink traditional models by looking at how physical products and food formulations can improve cognitive function, behavioral development, and more. Today’s pet toys double as brain games and have shown to improve attention span and memory. Retail spaces and veterinary offices such as Small Door are following a pet-first, “fear free” model, which aims to prevent or reduce fear, anxiety, and stress in pets as well as their caregivers through thoughtful design.
While it may seem surprising that an industry could benefit from a recession and pandemic, the pet industry is set to have a breakout year. With more people owning pets, owners spending more time with those pets, and taking more opportunities to enhance their pets’ lifestyle and well-being, we can expect to see unprecedented growth during this recessionary period.