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The pet industrial complex
Our animal friends are a thriving industry.
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The big idea
As our animals have transformed from our property to our de facto children, a massive and lucrative industry has developed to feed and care for them.
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By the digits
Pet care and pet food offer investors the size and stability of a mature industry. Yet the changing nature of the relationship between humans and their animals means it has the characteristics of a new, fast-growing sector.
85: Percentage of US dog owners who consider their pets members of their family (it’s 76% for cats)
22: Number of US cities where the term “pet owner” has been replaced with “guardian” in municipal codes
$1.6 billion: Size of the pet insurance market, which is growing at about 17% a year.
$100 billion: Amount Americans spent on pets and pet care, according to the American Pet Products Association, including veterinary care and care services like grooming).
$143 billion: Amount pet owners spent on pet food and supplies globally in 2020, according to Euromonitor (excludes vet care and services.)
$3.35 billion: Amount PetSmart paid to purchase online retailer Chewy in 2017.
25%: Contribution of pet products to the annual revenue of Populum, an Arizona company specializing in cannabidiol (CBD) products.
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Humans have lived with dogs and cats since the last Ice Age, and there is evidence of tight bonds between humans and pets from the ancient world. But for most of that history those pets were working animals. The real shift, however, came during the industrial revolution that began about 300 years ago, said Andrea Laurent-Simpson, a sociologist at Southern Methodist University in Dallas, and author of the forthcoming book Just Like Family: How Companion Animals Joined the Household.
With advances in health and economic productivity, families grew smaller and had more time for recreation. Pets became objects of amusement and entertainment, and children were encouraged to look after them to develop responsibility.
Perhaps the biggest single development in human-pet relations came with the invention of a seemingly innocuous product in the 1880s: flea and tick shampoo. As Grimm explains, prior to its sale, dogs and cats lived outside, in large part to protect their owners from the pests that lived in their fur. Once dogs came indoors—cats had to wait until 1947 and the invention of kitty litter—they became part of the household.
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One big number
127 million: The number of bags of pet food shipped by Amazon across the US in 2020.
In the last year, pet food companies were three of the top five performers in terms of online revenue in the US. In total, online sales for pet food rose roughly 32% over the course of the year, a rise of $6.4 billion, with Amazon and Chewy leading the charge.
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“We’re very inspired by how Disney really merged storytelling with content and toys and experience design.”Henrik Werdelin, a Bark cofounder who leads design and product development.
Bark has more than 400 employees and was most recently valued at $1.6 billion. The key to that success? Creating toys that will amuse and entertain both dogs and their owners. “It’s a little bit like Pixar,” says Henrik Werdelin, a Bark cofounder who leads design and product development. “When you watch those movies, they have both adult jokes and jokes for the kids.”
The company believes that Bark toys have to work on both levels, with materials, sounds, scents, and shapes that will satisfy and stimulate the canine audience, and designs that their besotted humans will enjoy showing off. “We wanted to kind of bring character design and narrative to the toys,” Werdelin says. “And that is something that hadn’t been done before in the dog-toy business.”
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Charting pet insurance
The rising cost of pet care has created another fast-growing industry: pet insurance. Now a $1.6 billion segment of the US insurance market, pet insurance is growing at about 17% a year, according to a report from IBISWorld.
A big chunk of pet insurance plans are sold through companies that make it available as a benefit to their employees, with about half the companies in the Fortune 500 now offering it, said Heidi Sirota, who heads pet insurance for Nationwide (the first pet the company insured was Lassie, the TV star, in 1982). Despite its rapid growth, only about 2.5 million US pets are insured (about 80% of those are dogs), less than 3% of all total, according to the North American Pet Health Insurance Association. Given that 30% of pets in Sweden and 23% in the UK are insured, the industry is optimistic about its potential for US growth.
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DIY: How to find a pet trainer
Over the last few decades, the field of animal behaviorists has also grown. Their overarching goal: to help create optimal conditions to breed human-pet relationships. But the burgeoning field remains an unregulated sector, governed only by independent organizations that dole out voluntary certifications.
Here are some tips on finding the right pet behaviorist:
- Start at the vet. A large percentage of pet problems have an underlying health cause, which a vet should rule out before training begins.
- Look for a professional with “alphabetty spaghetti after their name—somebody with valid training qualifications, who’s passed the more rigorous training exams,” advises Nicholas Dodman, a veterinary behaviorist and founder of the nonprofit Center for Canine Behavior Studies (websites like this one and the others listed above are a good place to start.).
- Avoid trainers who suggest “aversive” techniques such as punishment to get a dog to comply, says Higgs. “A good behaviorist works to understand why a dog wants to do something, and provides an outlet for that motivation,” she says, “so that they still get to do what they want to do, but not in a way that is problematic for the owner.”
- Be patient, and approach the training in an “inclusionary way”—that is, as a partnership, suggests Dodman. “You’re the dog’s friend, and you’re there to help it to learn from people who know how to teach,” he said.
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The billion-dollar question
What happens when we increasingly consider our pets as we do humans?
The more pet owners treat pets like people, the more they are willing to spend on food, services, and health care. But when society starts to regard dogs and cats as humans, with human and civil rights, it would mean profound and destabilizing shifts for the industry. The pet industry is based on the premise that pets are property, like livestock, and thus can be bought, sold, and euthanized. “Personhood,” as it’s called, could upend that dynamic.
For the pet industry, a growing demand for dogs is a good problem to have, and there’s little reason to think the industry won’t continue to grow. The specter of personhood, and the idea that pet ownership may one day be banned, is a very distant threat, said David Grimm, a science journalist and author of Citizen Canine: Our Revolving relationships with Cats and Dogs. “These animals have been in our lives for 10,000 to 15,000 years,” he said. “I don’t think they are going anywhere.”
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- America’s love for its dogs and cats built the pet industrial complex. As our animals have transformed from our property to our de facto children, a massive industry has developed to feed and care for them.
- Why Barkbox hires people from Disney and Lego to design toys for dogs. Bark has emerged as a winner in the booming pet industry, as companies tap into the market of adoring pet owners who are willing to spend on them accordingly.
- The pet food industry, charted. Like other industries, pet food has become increasingly specialized with more variety and marketing strategies similar to those of human food.
- Why more people are hiring “pet shrinks.” From trainers to counselors, animal behaviorists promise to help pet owners create optimal conditions to breed human-pet relationships.
- India’s anxious new pet parents are dreading a return to the office. From pet boarding to dog walkers, solutions for providing animals maximum comfort will help anxious pet parents set their minds at ease as they return to the office.
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