Is Pet Products A Good Business?

The pet industry in the United States is a rapidly growing industry, having more than doubled in the past decade. This incredible growth is directly related to the emotional connection pet lovers have with the dogs, cats, and other animals in their care. The American Pet Products Association (APPA) reports that pet ownership is at its highest level on record, with nearly 67% of U.S. households owning at least one pet.

45% of pet owners spend the same amount or more on their pet’s health care than they spend on themselves.

The annual cost of owning a dog is approximately $1,641, while the cost of owning a cat is $1,125

Fish are the most affordable pets, costing about $360 per year

For home improvement retailers, running a pet department can be a thriving niche business. It gives owners the option to sell a variety of pet foods, treats and innovative toys that can appeal to different target audiences – everyone from Gen Z to Baby Boomers. However, it's a particularly effective way to attract millennial pet owners—50 percent of whom purchase pet gifts every month.

Category Recession-proofing

Unlike other industries, the economic impact on the pet category has been minimal. Even during the pandemic, pet parents continue to feed their pets and take them to the vet. Statistics show that 60% of cats and 56% of dogs in the United States are overweight. Sales of high-quality, premium pet foods continue to generate substantial profits for retailers.

good profit margin

Margins on organic and premium pet food can be as high as 40%. Popular chew toys and bones are even higher, at around 70 percent. Pet food accounts for 75% of total pet industry sales. While the category is dominated by large companies like Mars Petcare and Purina, smaller companies like Blue Buffalo have a significant impact on consumers' purchasing decisions.

Demand regardless of season

Pet food, treats and accessories are always in season. No need to limit cash flow for a few weeks each year or estimate future needs. Although the pet industry reaches its peak around the December holidays, demand is relatively stable throughout the year. This makes it easier to manage inventory and incorporate long-term planning.

New products are easy to sell

Pet owners are eager to try new products that will benefit their beloved family members. Most new products introduced in the pet industry are self-explanatory and don't require a hard sell to close the deal. Owners are actively involved in learning more about programs that promote health, recreation and training. When most people visit a store, they already have all the information they need to make an informed purchase.

The market continues to grow

The good news for retailers selling pet products is that the market is growing. Pet owners purchase in-store and online. In March 2020, e-commerce pet sales grew 51%. By the end of the year, sales were estimated at $13.5 billion. The three reasons people shop online are price, selection and convenience. Retailers that operate brick-and-mortar stores and have an online presence will have more opportunities to sell products and attract customers.

Retailers that do not currently sell pet products but plan to enter the industry should start small and identify the best products to sell in their specific market. Offer shoppers products they typically can’t find in grocery stores or big-box retailers. Remember, owners love their pets and are willing to spend more on quality products.