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U.S. Pet Market Outlook, 2015-2016

The past year has no doubt solidified the pet industry as one of the most dynamic parts of the U.S. economy. Even when sales haven't kept up with the growth of recent years, the industry has managed to attract a slew of investment. Last year saw the biggest private equity deal of the year, when a group of investors bought PetSmart and took it private. And while one company focused on human products got out of the pet business (P&G), another got in (J. M. Smucker).

The industry has been a hotbed of innovation, with new products using the latest in technology and being promoted through social media and mobile apps. In fact, this year's Global Pet Expo saw a record number of new products, exhibit space and attendees.

With this latest edition of our Pet Market Outlook, Packaged Facts delivers all you need to know about the pet industry in one source. This year's edition includes the latest in market sizing and projections, hot new product trends, developments in marketing and packaging, as well as data from Packaged Facts proprietary Pet Owners Survey. The report has everything you need to know about mergers and acquisitions, retail channel trends, and pet owner demographics, psychographics, and spending habits.

Scope

Combining Packaged Facts' extensive monitoring of the pet market with a proprietary Pet Owner Survey hot off the presses-U.S. Pet Market Outlook 2015-2016 is the go-to source for a complete understanding of the U.S. pet industry. In its 7th edition, the report evaluates current trends and future directions for marketing and retailing, along with consumer patterns across the full spectrum of the market, including veterinary services, pet food, nonfood pet supplies, and non-medical pet services (grooming, boarding, training, etc.).

The report forecasts market size and growth for each category; examines new product activity; surveys retail channel trends including cross-channel shopping vs. shopper loyalty; and analyzes trends and shifts in the needs of today's pet parents. The report tabulates pet product sales channel by channel, using data from sources including IRI, whose Market Advantage service tracks sales in supermarkets, drugstores, mass merchandisers including Walmart, and select club stores, dollar stores and military commissaries; and SPINS, Inc., whose SPINSscan service tracks sales in the natural supermarket channel and in the specialty gourmet supermarket channel. Supplementing Packaged Facts' exclusive Pet Owner Survey is an extensive analysis of Simmons' Fall 2014 National Consumer Study, which is based on approximately 25,000 adult respondents surveyed from October 2013 through November 2014, as well as other years of Simmons surveys. The report contains dozens of numerical tables and charts, as well as numerous photographs of new products, advertising, screen shots and other images across key channels.

Table of Contents

Chapter 1: Executive Summary

  • Introduction
  • Scope and Methodology
  • Report Methodology
  • Market Performance
  • Pet Industry Sees Relatively Slow Growth
    • Table 1-1 U.S. Pet Market Retail Sales by Category, 2010-2014(in billions of dollars)
  • Market Share by Category and Animal Type
  • Some Consumers Still Spending Less
    • Table 1-2 Level of Agreement with Statement: "I am spending less on pet products because of the economy," 2010-2015 (percent)
  • Pets Are No Spring Chickens
  • Overweight Pets at Risk
  • Industry Banks on Higher-Income Households
  • Human/Animal Bond Still a Dominant Theme for Marketers
  • Industry Trends
  • Market Structure
  • M&A and Investment Activity
  • Premiumization Continues But Not All Rosy
  • Humanization Continues to Drive Market
  • Pet Businesses Attract Entrepreneurs
  • New Products Make Waves
  • Retail Trends
  • The Wide World of Pet Product Retail
  • Let's Make a Deal
    • Table 1-3 Level of Agreement with Statement: "I look out for lower prices, special offers, and sales on pet products," 2013-2015(percent)
  • Private Label Has Weak Showing, But National Brands Outpace Market
  • Petco and PetSmart Think Small
  • Pet Ownership Trends
  • Pet Ownership at Almost 54% of U.S. Households
    • Table 1-4 Household Penetration Rates for Selected Pet-Owning Classifications, 2010-2014 (percent and number in millions of U.S. households)
  • Dog and Cat Ownership Rates by Age
    • Table 1-5 Dog or Cat Ownership Rates by Age Bracket, 2008-2014 (percent of U.S. households)
  • Multiple Pet Ownership Trends
  • Oldest Boomers Nearing 70
  • The Gen X and Gen Y Pet Owners

Chapter 2 Highlights

Chapter 2: Market Trends

  • Market Performance
  • Pet Industry Sees Relatively Slow Growth
    • Table 2-1 U.S. Pet Market Retail Sales by Category, 2010-2014(in billions of dollars)
    • Table 2-2 U.S. Pet Market Retail Sales by Category, 2011-2014(percent change over previous year)
    • Table 2-3 Projected Total U.S. Retail Sales of Pet Products and Services, 2013-2019 (in billions of dollars)
    • Table 2-4 Projected U.S. Pet Market Retail Sales by Category, 2015-2019 (in billions of dollars)
    • Table 2-5 U.S. Pet Market Compound Annual Growth Rates by Category: 2009-2014 vs. 2014-2019 (percent)
  • Market Share by Category and Animal Type
    • Table 2-6 Percentage Share of U.S. Pet Market Retail Sales by Category: 2009, 2014, 2019
    • Table 2-7 Share of U.S. Pet Market Sales by Category and Animal
  • Type: Dog, Cat, Other, 2014 (percent)
  • Share of Pet Product Sales by Channel
    • Table 2-8 Share of U.S. Retail Channel Sales of Pet Products Market by Channel Classification, 2014 (percent)
  • IRI-Tracked Channels Up Marginally
    • Table 2-9 IRI-Tracked Sales of Pet Products: Total and by Food and Nonfood Category and Segment, December 2014 (in millions of dollars, units and pounds)
  • Natural Supermarket Sales Have Another Standout Year
    • Table 2-10 Retail Dollar Sales of Pet Products in the Natural Supermarket Channel by Category and Segment, 2013 vs. 2014 (in millions of dollars)
    • Table 2-11 Share of Retail Dollar Sales of Pet Products in the Natural Supermarket Channel by Category and Segment, 2013 vs. 2014 (percent)
  • Specialty/Gourmet Supermarket Sales Slip
    • Table 2-12 Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel by Category and Segment, 2013 vs. 2014(in millions of dollars)
    • Table 2-13 Share of Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel by Category and Segment, 2013 vs. 2014 (percent)
  • Market Drivers
  • Optimism in Economy Increases, But Consumers Still Wary
    • Table 2-14 Pet Owners: Overview by Change in Financial Situation Compared With 12 Months Ago, 2010-2014 (U.S. pet-owning households)
    • Table 2-15 Pet Owners: Overview by Expectations for Personal Financial Situation Over the Next 12 Months, 2010-2014 (U.S. pet-owning households)
  • Some Consumers Still Spending Less
    • Table 2-16 Level of Agreement with Statement: "I am spending less on pet products because of the economy," 2010-2015 (percent)
  • Consumers Noticing Those High Prices
    • Table 2-17 Level of Agreement with Statement: "Many pet products are becoming too expensive," 2011-2015
  • Pet Owners Keep Costs Down
    • Table 2-18 Amount Spent on Pet Products in Last 30 Days, January 2015 (percent)
    • Table 2-19 Pet Food Purchasing by Price Level: Dog vs. Cat Owners, 2014 vs. 2015 (percent)
  • Pet Ownership and Population Trends
    • Table 2-20 Household Penetration Rates for Selected Pet-Owning Classifications, 2010-2014 (percent and number in millions of U.S. households)
  • Shelter Adoption
  • PetPoint Report Tracks Shelter Channel
  • The Little Dog Laughed to See Such Trends
    • Table 2-21 Size in Pounds of Dogs, 2012-2015 (percent of pet
  • owners)
    • Table 2-22 Size in Pounds of Most Recently Acquired Dog,2014 vs. 2015 (percent of pet owners)
  • Pets Are No Spring Chickens
    • Table 2-23 Age Bracket of Dogs and Cats, 2015 (percent of pet owners)
  • Overweight Pets at Risk
    • Table 2-24 Agreement With Statement: "I have an overweight dog/cat," 2014 vs. 2015 (percent)
  • Industry Banks on Higher-Income Households
    • Table 2-25 Share of Total U.S. Pet Market Expenditures: $70K+ vs.Under $70K Income Households, 2001-2013 (percent)
    • Table 2-26 $70K+ Household Share of U.S. Pet Market Expenditures: By Category, 2008-2013 (percent)
  • Baby Boomers a Key to Industry Success
  • Human/Animal Bond Still a Dominant Theme for Marketers
  • Human/Animal Bond Has Health Benefits
    • Table 2-27 Level of Agreement with Statement: "I consider my dog(s) or cat(s) to be part of the family," 2014 (percent)
    • Table 2-28 Level of Agreement with Statement: "My dog or cat has a positive impact on my mental health," 2015 (percent)
    • Table 2-29 Level of Agreement with Statement: "My dog or cat has a positive impact on my physical health," 2015 (percent)
    • Table 2-30 Level of Agreement with Statement: "I enjoy purchasing pet products that pamper my dog or cat," 2015 (percent)
  • New Cat Cafes and Dog-Friendly Restaurants Unveiled
  • Kids and Pets
  • Marketers Create Buzz
  • Other Marketers Celebrate Human/Animal Bond
  • Marketers Lean on Cause Marketing
    • Table 2-31 Level of Agreement with Statement: "The participation by pet product retailers in pet welfare and rescue causes and events plays a significant role in where I buy pet products," 2014 vs. 2015(percent)
    • Table 2-32 Level of Agreement with Statement: "The participation by pet product brands in pet welfare and rescue causes and events plays a significant role in which brands I buy," 2014 vs. 2015(percent)
    • Table 2-33 Agreement With Statement: "I have contributed time or money to pet welfare or rescue causes," 2015 (percent)
  • Focus on Cats

Chapter 3 Highlights

Chapter 3: Industry Trends

  • Introduction
  • Market Structure
  • M&A and Investment Activity
  • PetSmart Goes Private
  • J.M. Smucker Buys Big Heart Pet Brands
  • AmerisourceBergen Snaps Up MWI Veterinary Supply
  • VCA Buys Camp Bow Wow; Best Friends Changes Hands Again
  • Mars Completes its Acquisition of P&G's Petcare Business
  • PetSmart Makes a Web Play
  • Petco Increases Pet Health Reach with Drs. Foster & Smith Purchase
  • Yet More Distributor Consolidation
  • Investors Continue to Look at Pet Meds
  • Ohio Pet Specialty Chains in Deals
  • Pet Insurance Moves
  • Veterinary Practice Businesses Change Owners
  • H.I.G. Capital Creates Community Veterinary Clinics, LLC
  • Shore Capital Jumps into Veterinary Market
  • Freshpet's IPO Anything But Cold
  • Seeking IPO, Blue Buffalo Also Faces Litigation
  • Spectrum Brands Buys Salix
  • Central Garden & Pet Rejects Unsolicited Offer from Harbinger
  • Group
  • Websites On the Block
  • Other Deals
  • Cross-Market Trends
  • Consolidation
  • Premiumization
  • Humanization
  • Pet Services
  • Retailers and Vets Continue to Add Services
  • Banfield and VCA Top Veterinary Services
  • Veterinary Visit Statistics
    • Table 3-1 Percent of Dog and Cat Owners Who Have Visited Vet in Past Year: Routine Checkup vs. Sick/Emergency Care, 2015 (percent)
  • Veterinary Prices Rising or Falling?
  • Industry Attempts to Reverse Trend
  • Updates on Bayer Veterinary Care Usage Study
  • Fairness to Pet Owners Act Still on the Table
  • Pet Insurance Making Strides
  • Figure 3-1 Projected North American Pet Insurance Market
  • Revenues: United States, Canada, and North America, 2013 vs. 2018(in millions of U.S. dollars)
  • Non-Medical Services Critical to Pet Specialty Chains
    • Table 3-2 PetSmart and Petco Sales of Pet Services, 2001-2014(separately and cumulative, in millions of dollars)
  • Interest in Doggie Daycare and Overnight Care
    • Table 3-3 Number of PetSmart PetsHotels in Operation, 2006-2014
  • PetSmart Promise Enters Third Year With More Locations
  • Pet Businesses Attract Entrepreneurs
  • Pet Products
  • New Products Make Waves
  • Pet Owners Believe in Pet Food's Preventive Health Benefits
    • Table 3-4 Level of Agreement With Statement: "High-quality dog foods/cat foods are effective for preventive health care," 2014 vs. 2015 (percent)
  • Product Safety A Concern, But Diminishing
  • Figure 3-2 Level of Agreement with Statement: "I consider natural and organic pet foods to be safer than regular pet foods": Pet Owners Overall vs. Natural Pet Product Purchasers, 2014 (percent)
  • Figure 3-3 Level of Agreement With Statement: "I am concerned about the safety of the dog food, dog treat, and dog chew products(or cat food and treat products) that I buy," 2012 vs. 2014 (percent)
  • Figure 3-4 Level of Agreement With Statement: "Fear of pet food contamination/ product safety is a key consideration in the dog foods/cat foods I buy," 2015 (percent of cat and dog product purchasers)
  • Figure 3-5 Level of Agreement with Statement: "I prefer to purchase pet products made by smaller companies I trust," 2014 (percent of pet product purchasers)
  • Marketers Emphasize Made in the USA Claims
  • Figure 3-6 Pet Owners Who Agree a Lot or Agree a Little That They Seek Out Pet Food/Supplies Made in the U.S.A., 2014 (percent of pet product purchasers)
  • Natural Drives Premium
  • Figure 3-7 Level of Agreement with Statement: "Natural/organic brand pet products are often better than standard national brand products," 2011 vs. 2014 (percent)
  • The Nuances of Natural
  • Pet Food Leaders
  • Hill's Talks Metabolic Technology; Expands into Wet Food
  • Natural Players Lead Product Innovation
  • Grain-Free Has Staying Power
  • Gluten-Free Continues to Show Strength
  • Ancestral Lines Take Pets into the Wild
  • The Loyalty of Cat Owners
  • Gourmet Cat Food
  • Making the Grade on Human-Grade
  • Personalized Pet Food
  • Pet Companies Hop on Yogurt Bandwagon
  • Niche Diets
  • Limited Ingredient Diets
  • Weight-Related Diets
  • High Performance Diets
  • Glycemic Index
  • Aging Pets
  • Novel Product Forms for Cats
  • Refrigerated/Frozen Category Continues Strong Growth
  • Treat Segment Reflects the Industry's Trends
  • Play with Your Food
  • Supplement Sales Affected by Nutraceutical Treats
  • Small Pet Food Mirrors Natural Trends
  • The Pet Medications Market
  • Multi-Tier Market: Veterinary, Pet Specialty, and Mass
  • Figure 3-8 Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2013 (percent)
  • Producers in Two Tiers: Pharmaceutical and OTC
  • Seasonal/Holiday Pet Product Purchasing
    • Table 3-5 Level of Agreement with Statements: "I will buy Christmas/Winter Holiday treats and gifts for my pets," 2014 (percent)
    • Table 3-6 Agreement With Statement: "Over the recent Christmas/Winter Holiday season, my dog(s)/cat(s) got special gifts or treats,"2015 (percent)
  • The Nonfood Pet Supplies Market
  • Multiple Trends Seen in Pet Supplies
  • Innovators Target Cat Litter Category
  • Pet Toys Get Nostalgic
  • More Pet Toys
  • Pet Beds and Habitats
  • Other Pet Supplies

Chapter 4 Highlights

Chapter 4: Retail Trends

  • The Wide World of Pet Product Retail
  • Let's Make a Deal
    • Table 4-1 Level of Agreement with Statement: "I look out for lower prices, special offers, and sales on pet products," 2013-2015(percent)
  • Figure 4-1 Level of Agreement with Statement: "I shop for pet products at a variety of stores," 2011 vs. 2014 (percent)
  • Premium Growth Threatened?
    • Table 4-2 Level of Agreement with Statement: "I am willing to spend extra to ensure the wellness of my pet," 2013 vs. 2014 (percent)
  • Consumer Loyalty Levels Off
    • Table 4-3 Channel Loyalty in Pet Product Purchasing: All Channels, 2008-2014 (percent and number)
    • Table 4-4 Share of Customer Base Who Are Channel-Loyal by Leading Retail Channels or Pet Superstore Chains, 2009-2014 (percent)
    • Table 4-5 Channel-Loyal Customer Base for Pet Products by Leading Retail Channel or Pet Superstore Chain, 2009-2014 (number in thousands)
  • Coupon Use Goes Down
  • Figure 4-2 Percent Who Use Pet Food Coupons: Dog Owners vs. Cat Owners, 2009- 2014 (percent)
  • Pet Product Purchasing Rates by Channel
    • Table 4-6 Household Purchasing Overview for Pet Products by Retail Classification: U.S. Households Overall vs. Dog or Cat Owners, Fall 2014 (number and percent)
  • Most Channels Retreat in 2014
    • Table 4-7a Purchasing Rates for Pet Products by Selected Retail Channels and Pet Superstore Chains, 2009-2014 (percent)
    • Table 4-7b Purchasing Base for Pet Products by Selected Retail Channels or Pet Superstore Chains, 2009-2014(U.S. dog or cat owners in thousands)
  • Top Channel is Walmart
    • Table 4-8 Channel Choices for Pet Product Shopping, Last Three Months: Pet Food, Pet Medications, Other Pet Supplies, January 2015 (percent of pet product buyers)
  • Private Label Has Weak Showing
    • Table 4-9 IRI-Tracked Private-Label Sales of Pet Products: Total and by Food and Nonfood Category and Segment, December 2014 (in millions of dollars, units and pounds)
    • Table 4-10 Private-Label Share of IRI-Tracked Sales of Pet Products:Total and by Food and Nonfood Category and Segment, 2013 vs. 2014 (percent)
  • National Brands Outpace Market
    • Table 4-11 IRI-Tracked Sales of Branded Pet Products: Total and by Food and Nonfood Category and Segment, December 2014(in millions of dollars, units and pounds)
  • The Mass-Market
  • Walmart's Pet Focus
  • Target Also Building Its Pet Department
  • Pet Specialty Chains
  • PetSmart and Petco's Sales Surpass $11 Billion
    • Table 4-12 PetSmart and Petco Sales and Number of Stores, 2001-2013 (cumulative, in units and millions of dollars)
  • PetSmart and Petco Seek out Exclusivity
  • Petco and PetSmart Think Small
  • Other Pet Specialty Players
  • Wholesale Clubs
  • Drugstores/Convenience Stores
  • One-Hour Delivery Becomes Latest Retail Trend
  • Online Sales
    • Table 4-13 Level of Agreement with Statement: "I am buying pet products online more than I used to," 2011-2015 (percent)
    • Table 4-14 Time Frame for Most Recent Online Purchase of Pet Products, 2012-2015 (percent of pet owners)
  • Other Retail Markets
  • The Pet Professionals
  • Natural Supermarkets
  • Dollar Stores
  • Agricultural/Feed-Seed Stores
  • Home Improvement Stores
  • Closeout Stores: T.J. Maxx and Marshall's
  • Apparel Retailers
  • Luxury Retailers
  • Food Co-ops

Chapter 5 Highlights

Chapter 5: Pet Ownership Trends

  • Pet Ownership at Almost 54% of U.S. Households
    • Table 5-1 Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2008-2014 (percent of U.S. households)
    • Table 5-2 Household Populations for Selected Dog- or Cat-Owning Classifications, 2008-2014 (thousands of U.S. households)
    • Table 5-3 Household Penetration Rates for Selected Pet-Owning Classifications, 2010-2014 (percent and number in millionsn of U.S. households)
  • Changes in Pet Households by Income Level
    • Table 5-4 Change in Pet Market Consumer Base: Households Earning $100,000 or More vs. Households Earning Under $100,000, 2010 vs. 2014 (number of U.S. dog- or cat-owning households)
  • Dog and Cat Ownership Rates by Age
    • Table 5-5 Dog or Cat Ownership Rates by Age Bracket, 2008-2014(percent of U.S. households)
  • Multiple Pet Ownership Trends
  • 32% of Pet Households Keep Multiple Types
    • Table 5-6 Multiple Pet Ownership by Animal Type, 2010 vs. 2014(percent of pet-owning households)
    • Table 5-7 Ownership of Multiple Pets of a Single Type, 2010 vs. 2014(percent of U.S. households who own a given type of pet)
  • Oldest Boomers Nearing 70
  • The Gen X and Gen Y Pet Owners
    • Table 5-8 Household Penetration Rates for Selected Pet-Owning Classifications: By Generational Cohort, 2014 (percent of U.S.households)
    • Table 5-9 Household Populations for Selected Pet-OwningnClassifications: By Generational Cohort, 2014 (numberof U.S. households in thousands)
    • Table 5-10 Indexes for Selected Pet-Owning Classifications:By Generational Cohort, 2014 (U.S. households)
    • Table 5-11 Indexes for Dog or Cat Ownership: By Age Cohort,2010 vs. 2014 (U.S. households)
    • Table 5-12 Indexes for Dog or Cat Ownership: Younger vs. Older Boomers, 2010 vs. 2014 (U.S. households)
    • Table 5-13 Number of Total U.S. Population Growth for Selected Age Brackets, 2015-2060 (in thousands)
    • Table 5-14 Share of Total U.S. Population Growth for Selected Age Brackets, 2015-2060 (in percent)
  • Full House
    • Table 5-15 Dog/Cat Ownership Rates by Household Composition,2008-2014 (percent)
    • Table 5-16 Share of Total Dog/Cat Owners by Household Composition, 2008-2014 (percent)
  • Dog vs. Cat Households
    • Table 5-17 Dog Ownership Rates by Household Composition,2008-2014 (percent)
    • Table 5-18 Share of Total Dog Owners by Household Composition,2008-2014 (percent)
    • Table 5-19 Cat Ownership Rates by Household Composition,2008-2014 (percent)
    • Table 5-20 Share of Total Cat Owners by Household Composition,2008-2014 (percent)
  • Pet Ownership Grows Among Minorities
    • Table 5-21 Change in Pet Market Consumer Base: White Non-Hispanics vs. Minorities, 2010 vs. 2014(number and percent of U.S. dog- or cat-owning households)
    • Table 5-22 Dog and Cat Ownership Trends by Race/Ethnicity, 2008-2014 (percent and number of U.S. dog- or cat-owning households)
    • Table 5-23 Dog vs. Cat Ownership Trends by Race/Ethnicity, 2010 vs.2014 (percent and number of U.S. dog- or cat-owning households)
    • Table 5-24 Demographic Snapshot of the U.S. Population, 2014
    • Table 5-25 Projected Population Growth of Hispanics, 2015-2060 (in thousands)
  • Pet Owner Psychographics
  • Health and Medical Related Sentiments and Practices
    • Table 5-26 Selected Health & Medical Psychographics:
  • Dog Owners vs. Cat Owners vs. Other Pet Owners, 2014(percent and index)
    • Table 5-27 Selected Health & Medical Psychographics:Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2014 (percent and index)
  • "Green" Sentiments and Practices
    • Table 5-28 Selected Sustainability Related Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2014(percent and index)
    • Table 5-29 Selected Sustainability Related Psychographics:Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2014 (percent and index)
  • Media, Marketing and Channel Related Sentiments and Practices
    • Table 5-30 Selected Media and Marketing Related Psychographics:Dog Owners vs. Cat Owners vs. Other Pet Owners, 2014(percent and index)
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