The Independent Investor: Pet Care Remains Recession Proof
Titus joined Bill's family two years ago.
This year, we will spend approximately $48 billion on our pets, vaulting the pet-care sector to the seventh or eightth-largest retail sector in the U.S. That's an almost 5 percent increase versus last year's spending, and revenues are expected to top $56 billion by 2014. What's fueling this steady growth is the 62 percent of American households who now own one or more pets that squawk, bark, whinny, meow or otherwise make their wishes known to us.
It's not simply about food bowls, water dishes and rubber balls either. Spending has expanded into new areas. Pet services, from doggie day care and pet sitting to grooming and spa emporiums, have sprung up in every city in the nation. The purchase of over-the-counter medicines, nutritional products, insurance, veterinary and other services have also fueled the startup of countless small businesses while making the larger players even larger. Even pet cemeteries are on the rise.
Internet sites have also joined the pack with blogs and websites covering everything from pet health, adoptions, food, nonprofit charities to social networking sites like "Dogster," where owners of pets can bond, exchange information and post photos of their pets.
The pet-care phenomenon is not only confined to the U.S. The global pet food market, for example, is growing strongly this year with cat treats, premium dog and cat food, and dietary and health supplements leading the charge. Brazil is the largest food market for pets behind the U.S. while India and Russia are the fastest growing countries. Euro monitor, a respected research organization, is predicting that global pet shops and superstore outlets will grow 13 percent between this year and 2014.
So what is fueling this pet-centric spending mania? Despite a struggling economy, high unemployment and a consumer who is largely on a spending strike everywhere else in the landscape, our tendency to humanize our pets supersedes all these drawbacks.
"Humanization," according to scholars (and marketers) who study the human-animal bond, is the modern tendency to see our pets as junior members of the family rather than in their traditional role as animals or beasts of burden. These fur babies have become so important in our lives that we would no more consider a serious cutback on spending for them than we would for our human kids.
In many ways this phenomenon is more a comment on how we humans have changed. Although we have our cell phones, our e-mail, our Facebook pages and a hundred other electronic means of communication, the awful truth is that we are becoming less connected from our communities with every passing day. More of us live alone, get divorced, opt out of having children, move long distances from our family and spend more time at work and less in community involvement. For many of us, instead of hugging another person, we hug our cats, dogs or iguanas.
Over 83 percent of pet owners call themselves their animals "mommy" or "daddy" and 56 percent of dog owners buy their pets Christmas presents. The biggest boost in spending is coming from empty nesters, baby boomers, who have transferred their money and attention from grown-up children to their pets.
I confess to fitting that profile. We have a 2-year-old Lab named Titus who costs us a bundle each year. We both work and until recently we dropped him off at a day-care center five days a week. We are planning a week's vacation in Maine and you can bet he will go with us. Calling around for reservations, I've been surprised at the number of pet-friendly hotels we have found. Best Western, the world's largest hotel chain, for example, now offers more than 1,900 pet friendly hotels around the world.
Now that we live in Pittsfield during the week, we have hired another pet sitter, Renee DeRagon, the proprietor of Love Us and Leave Us, who got started as a canine sitter/walker in 2006.
"I've handled over 200 different dogs over that time," she said, "and I have a steady client base now of over 100."
Renee makes a pretty good living taking our Titus and other dogs on adventure hikes for a couple of hours a day.
For those who are unemployed or looking to start a new business, you might want to look at pet sitting. Pet sitters can earn between $12 and $22 a visit with the national average at $16 an hour. In many cases, dog sitting may only involve visiting a house, give the pet a bathroom break, feeding him and maybe throwing the ball a few times. That takes half an hour tops.
If you build your clientele until you are making 10 visits a day, that's $160 a day or $4,880 a month. That's not pocket change, especially if you are out of work. There are no expenses, nor certifications required and few barriers to entry. All you need do is love animals. So far Love Us and Leave Us has been good to Renee.
"I bought a house this year and I was shocked at what I'm making this year," she said.
"I feel like a rock star in the dog world," admits Renee, who was a restaurant cook before her new career, "the dogs love me, but it is the pet owners that you need to know how to handle. This career does require good customer skills."