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The Big Business Of Dogs and Dog Food

The Big Business Of Dogs and Dog Food
The Big Business Of Dogs and Dog Food

Dogs, canines, pooches – call them what you like, you have to admit we’re a nation of dog lovers!

If you doubt this, just take a look at the latest statistics from the American Pet Products Association (APPA).

According to the 2011-2012 APPA National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 72.9 million homes. Specifically for dogs, it is estimated that 46.3 million households own a dog or dogs and that in all there are 78.2 million dogs in the U.S.

That’s a lot of dogs and pet parents! And it translates into big business. The estimate for the pet industry in 2012 is a whopping $52.87 Billion! Of this total, food accounts for about $20.5 Billion. Little wonder there are 4 major brand companies competing for a slice of this lucrative pie.

The estimated average basic cost of food for dog owners is $254 a year with an extra $70 a year in treats. Another $94 a year is spent, on average, on vitamins.

Now that’s a lot of dog chow…

But the trend of sales is not only up, it’s changing from being dominated by the “Big 4” branded manufacturers (Mars Inc., Nestle S.A., Colgate-Palmolive and Procter & Gamble) and progressively, smaller makers and marketers are taking share from the “big dogs” (pun intended).

Smaller companies can formulate with different performance requirements, putting the pet first and profits a close second. Production can be in smaller batches so that product is never more than 6 weeks or so old, rather than being over-preserved to allow for the months, even years that some pet foods may be stored in national and local warehouse distribution.

Now there’s an even more revolutionary trend that’s been over 10 years in the making. Namely pet parents becoming personal ambassadors for pet health and using word of mouth marketing to educate friends, family members and the wider public about better formulated pet foods. Independent dog food companies have been steadily growing.

There’s an interesting confluence of two different trends happening. First dog owners are becoming increasingly discriminating as a result of the countless pet product recalls suffered in the past several years. When dogs and cats die as a result of poor product formulation – expect people to take notice.

Second, given the poor state of the economy, there’s a growing wave of entrepreneurship with more and more people starting their own business from home, often starting part-time. What better industry to target than pets?

We started this article showcasing how B-I-G the market is, so there’s plenty of scope to compete here and get some market share! Pet owners love their pooches so there’s literally a hungry market waiting for the next big thing in dog food. Plus, with food and treats the product is literally consumed, so there’s a repeat business opportunity for long -term customer lifetime value to be cultivated.

We see the trend to more holistic dog food product formulations continuing as more and more people learn what’s really in their pet food and become sufficiently outraged that they make a decision to switch brands to smaller, more caring, emerging brands they can relate to and trust.