The Pet Economy

When I saw that Business Week had done a big piece on the pet economy, I knew I had to share some of it with all of you. After all, I have quite a list of posts devoted to pets and I KNOW how much you love to hear me talk about how expensive pets are. ;-)

Anyway, here are the highlights of the piece and my comments:

Americans now spend $41 billion a year on their pets—more than the gross domestic product of all but 64 countries in the world. That's double the amount shelled out on pets a decade ago, with annual spending expected to hit $52 billion in the next two years, according to Packaged Facts, a consumer research company based in Rockville, Md. That puts the yearly cost of buying, feeding, and caring for pets in excess of what Americans spend on the movies ($10.8 billion), playing video games ($11.6 billion), and listening to recorded music ($10.6 billion) combined.

How do we rack up this much? By going to extremes:

"People are no longer satisfied to reward their pet in pet terms," argues Bob Vetere, president of the American Pet Products Manufacturers Assn. (APPMA). "They want to reward their pet in human terms." That means hotels instead of kennels, braces to fix crooked teeth, and frilly canine ball gowns. Pet owners are becoming increasingly demanding consumers who won't put up with substandard products, unstimulating environments, or shoddy service for their animals.

And for the over-the-top pet spending idea of the day:

If there's still any doubt whether the pampering of pets is getting out of hand, the debate should be settled once and for all by Neuticles, a patented testicular implant that sells for up to $919 a pair. The idea, says inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness" after neutering, thereby allowing them to retain their natural look and self-esteem. "People thought I was crazy when I started 13 years ago," says the Oak Grove (Mo.) entrepreneur. But he has since sold more than 240,000 pairs (a few of which went on prairie dogs, water buffalo, and monkeys). "Neutering is creepy. But with Neuticles, it's like nothing has changed." Nothing, except there's a fake body part where a real one used to be.

Can it get and worse? I'm sure it will.

What happened to the days when a dog was simply a dog?

This piece contains one unbelievable quote/stat/finding after another. Since it's seven pages in length, I've selected several of their quotes that highlight the article in case you can't read it all:

• APPMA reports that 42% of dogs now sleep in the same bed as their owners, up from 34% in 1998.

• Half of all dog owners say they consider their pet's comfort when buying a car, and almost a third buy gifts for their dogs' birthdays.

• There are now $430 indoor potties, $30-an-ounce perfume, and $225 trench coats aimed solely at four-footed consumers and their wallet-toting companions.

• Even those who shun animal couture are increasingly willing to spend thousands on drugs for depression or anxiety in pets, as well as psychotherapy, high-tech cancer surgery, cosmetic procedures, and end-of-life care. About 77% of dogs and 52% of cats have been medicated in the past year, according to APPMA, an increase of about 20 percentage points from 1996.

• About 63% of U.S. households, or 71 million homes, now own at least one pet, up from 64 million just five years ago.

• After consumer electronics, pet care is the fastest-growing category in retail, expanding about 6% a year.

• "He's my best friend and my best-accessorized friend," says Gemoets, whose splurges for Bradford include a $1,200 Hermès collar and leash, as well as $500 Chanel pearls for parties.

• Most of the pet business world's attention is directed at the country's 88 million cats and 75 million dogs. The reason is simple. As Philip L. Francis, CEO of PetSmart Inc., the world's largest pet specialty retailer, explains: "You can't train a fish or groom a snake."

• Along with making his 928 retail locations homier and hosting pet parties, Francis is rolling out blue-shingled "pet hotels" (kennels) in his stores. They feature private suites with raised platform beds and TVs airing shows from Animal Planet for $31 a night, as well as "bone booths," where pets can take calls from their owners, and porous pebble floors where dogs can pee. Cats get live fish tanks to watch in their rooms and separate air filtration systems so their scents don't drive the dogs crazy.

• With annual growth nearing 50%, "the pooper scooper industry is now experiencing a lot of consolidation," says Jacob D'Aniello of DoodyCalls, which has 20 locations nationwide.

• Americans now spend $9.8 billion a year on vet services. That doesn't include the over-the-counter drugs and other supplies, which add $9.9 billion in costs.

• "Pocket pets and animals who wouldn't even have been taken to vets now go for regular visits." Suzanne Kramer of Chicago spent close to $380 on vet visits and drugs to treat a tumor in her hamster, Biffy, before he died last year.

• Not only is state-of-the-art technology such as magnetic resonance imaging, with costs that range around $1,500 a scan, now available in small-town labs, but consumers' expectations of medical care have been transformed. They want the same best-in-class care for their pets that they want for themselves.

• Jamie Ward invested in a $25.77-a-month plan with Veterinary Pet Insurance for her American Staffordshire terrier, Loki, only to discover that it didn't cover any of the $2,000 in expenses for a kneecap injury.

• The ever-expanding roster of drugs and treatment can run into tens of thousands of dollars in expenses, creating a dilemma for owners. Steve Zane of Hoboken, N.J., choked slightly when a veterinarian presented him and his wife, Lily, an estimate of $3,700 to help cure liver failure in their cat, Koogle, over Christmas. "We looked at each other and said: Well, he's family,'" recalls Zane, a graphic designer who's still paying off the final bill for the recovered cat. "If it had been $15,000, I think we would almost have had to say no."

• Americans are expected to spend 52% more on medicines to treat their pets this year than they spent five years ago.

• As many as 40% of dogs are estimated to be overweight or obese, with similarly high rates among cats, thanks to the indulgent habits of their owners. Being plied with carob bonbons all day while getting rolled around in an all-terrain stroller (retail price: about $210) is not an ideal lifestyle for any animal.

• And for some pet lovers, no medical procedure is too extreme. Plastic surgeons offer rhinoplasty, eye lifts, and other cosmetic procedures to help tone down certain doggy features, from droopy eyes to puggish noses. Root canals, braces, and even crowns for chipped teeth are also becoming more popular.

The article also details where all the spending on pets goes. Here's the breakdown:

• Food: $16.1 billion
• Supplies/OTC Medicine: $9.9 billion
• Vet Care: $9.8 billion
• Grooming and Boarding: $2.9 billion
• Live Animal Purchases: $2.1 billion

You can see a cute chart with these numbers featured here.

Business Week also has an interesting piece on when to let go of a sick pet.

I'm not saying anything -- the facts speak for themselves here. But I will leave you with this quote:

"I call him my 401(k) with paws," he says, "because that's where all my money goes."

Comments

[Scott Kustes]

Obviously what people want to do with their money is their business, but I find this ludicrous. My dog gets food and monthly heart-worm medicine and flea repellent, that's it. I can't see spending oodles of money for pet braces, plastic surgery, or other ridiculousness. I do make my dog's food myself, but it's probably cheaper than premade food from Nutro (Purina, etc) and she's much healthier and livelier on it...it's just raw chicken backs (2 per day) with some vegetable/fruit slop (chopped/blended veggies and fruit). She loves her meals and is a beautiful 50lbs of muscular puppy and it only takes me an hour or less a couple times a month.

Scott Kustes

[Chris]

I love animals, especially cats. But I just don't see the point in all of that. I probably wouldn't spend more than a few hundred dollars on life saving surgery for my pets. All an animal wants is not to be abused and to have a full food dish and water, and in the case of dogs - room to run. My dog is probably happier with a not-to-frequent snack of real meat and a pat on the head than those dogs sitting on a tiny hotel bed watching Animal Planet all day.

But to each their own! We all have hobbies that eat into our budget. There's nothing wrong with making your hobby a spoiled pet!

[Anitra]

I have two cats, and our monthly expenses for them are primarily food, litter, and flea treatment. Maybe $5 on toys every other month. These other expenses are ridiculous - all your pet wants is to spend time with you.

I can partially understand the expensive vet procedures, though. My favorite cat was hit by a car as a child, and we paid hundreds of dollars for emergency vet bills and reconstructive surgery (her jaw was broken). There was no question in my parents' minds that it was the right thing to do, even though it was expensive. I think the same thing happens with serious diseases like cancer - if there's a good chance of the animal being "cured", most pet owners will go through with it, to avoid losing Sparky.

[Cruz]

My live-in fiance and I own a 1 year-old Japanese Chin dog. He is probably the most obedient, trainable animal I have ever owned and we love him dearly. We keep him active daily, and are amazed at the joy he brings us. It is because of this that I keep pet insurance that will cover any unforeseen injury. (When one can spend anywhere from 300-3000 on potential accidents, the insurance just gives us the peace of mind). We never have him off-leash when he's outside our apartment building, unless we take him to the yard which we always make sure the fence is closed. We were considering getting another one, but in all honesty, I am fighting it as I feel Gizmo is enough...the initial vet bills I spent on him (required shots, physical, etc) tempers me on that though. The only frills I spend on him, really, are chew toys. The rest is just heart-worm medicine, flea shampoo, and food. If I had to spend money on him to make sure he was with us for 2-3 years longer (as opposed to months), I would in a heartbeat.

[G]

The really sad thing about all of this is that these same people piss and moan about their copays at the doctor and for medications for themselves and their children, but will drop close to 20 billion per year on the same costs for an animal.

[Livingalmostlarge]

Hmm..well pets bring love and affection and over destress a person. I honestly say I consider my two dogs when buying our couch this weekend. I said do I want my gorgeous italian leather sofa???? Yes. But I can't buy it because my two dogs will sleep on it all day and ruin it in a few months.

Second, I'm considering my future car. I think I will have children and our two maybe three dogs. So I need space for our doggies and kids. And the car has to be able to take a beating.

Third, when I vacation, I consider what will it cost to board my pet and is it feasible?

So yes I do care a lot about my dog. I do spend time considering my choices because of them. They are part of my family. And yes I would spend a lot on a medical procedure as long as they are not in pain and can enjoy their life. If not then I would be humane.

I made a commitment to my dog to treat it humanely when we got them. That does not mean putting them down because surgery cost $1k. That does not mean it is spoiling a dog.

We feed them expensive dog food, it used to prescription for allergies. But I did not get two puppies, no I got two abandoned dogs from a rescue group and SPCA. So to the posters above who won't spend money on their pets, I hope you didn't buy them and only adopted them for not more than $50-100 on their purchase from the SPCA.

I have spent a fortune on rehabilitating one of them. He was an aggressive dog, but now I think if he were sent back he could be adopted by a family. Our other dog we also adopted who was "older" and had no hair from anxiety problems. So instead of paying $500-1000 for a puppy we just paid that to help an older dog already in need of a family.

[Notdumb]

This just proves that American values are really in the trash when we rather treat dogs/hamsters like children than doing God's purpose in life and having real kids!!!

[Matt]

As long as I can remember we've had pets and now I've got one of my own and about the only expenses that I will splash out on are: food, vet bills, and the occasional package of treats (which last a long time). I understand a pet is a companion but seeing all these people dressing their dogs up in little jackets and dresses is beyond me. If they have that much spare money why don't they give me some - I've got a couple business ventures that could use some funding.

[kitty]

My cat is part of my family. I'll spend for her food, health, treats, scratching post; I paid $2500 for complex surgery to remove a polyp from her inner ear when she was a kitten, I paid around $900 twice for dental cleaning and extractions (lousy teeth...) in my cat's 5th and 7th year.

Having said that some of the things mentioned are ridiculous and borderline abusive. Putting a pet through the pain of a cosmetic surgery or braces just to please the owner's views of "good looks" is close to animal cruelty, IMHO. We need to keep in mind which expenses are for our pets benefit and which are for ours.

This just proves that American values are really in the trash when we rather treat dogs/hamsters like children than doing God's purpose in life and having real kids!!!
Some people cannot have children and making comments like this is downright cruel.