PetSmart Q1 2011

PetSmart Inc (PETM) reported strong first quarter 2011 results, booking net income of $71 million on $1.5 billion in revenues, with earnings up 33%. The company reported comparable store sales growth of 5%, services sales growth of 9%, and total sales up 6.8%.

Super premium pet food and services seem to be primary drivers of the customer to the store. The company believes it has captured 15% of the $3.6 billion annual market for grooming and boarding services. Further, the company notes strong sales in grooming supplies, and points to exclusive Martha Stewart and GNC branded product launches.

PetSmart has recently matured efforts to drive the customer into cross-selling and defined channel strategies, as well as adding higher margin private label brands into the mix. A good combination in the highly competitive pet industry.

Source: PetSmart Investor Relations

Pet Industry 2011 Strategic Outlook

A new market research report for pet industry business development is available for purchase online.

U.S. consumer spending continued to grow across all four segments of the pet industry, cementing its reputation as "recession resistant." But shifting demographics reveal changing patterns by core demographic groups. U.S. pet owner spending by age, income, higher income, household composition, and region are charted, with an Executive Summary by Dillon Media.

The Pet Industry 2011 Strategic Outlook analyzes nationwide spending, trends and business involvement in the industry, including how it fared during the recession and opportunities moving forward. The data aggregate consumer spending on all pets in four main segments: Pet Food, Veterinary Services, Pet Purchase Supplies & OTC Meds, and Pet Services.

The latest available data are from 2009, with forecasts through 2015. This report is valuable to participants in the nationwide pet retail market, for business plan citations, for product development strategy, for marketing and advertising plans, and for an overview of the pet industry landscape.
 

Pet Business Trade Shows

Attending a Pet Industry Tradeshow?
Dillon Media can help with booth design, web and print marketing material. Learn more...

Global Pet Expo 2009
Feb 12-14, Orlando, Florida
Presented by the top industry manufacturers and distributors' trade organizations, over 800 companies will launch dog, cat, bird, aquatic and small animal products at this show.

H.H. Backer Winter 2008 Trade Show
Oct 3-5, Rosemont (Chicago), Illinois
New this year is an expanded aquatics section and an All-Natural area of the tradeshow, featuring eco-friendly and green pet products.

Pet Fashion Week 2008
Aug 23-24, New York City.
A smaller trade show focusing on fashion, Pet Fashion Week has quickly grown in the last two years and now includes an annual show in Tokyo. The market in Japan remains strong for luxury dog collars, apparel and supplies.

Pet South America is an international trade show for the Latin American market
Sep 17-19, Sao Paulo, Brazil

Pet Fair Asia has grown steadily over the last couple of years, from 280 to 350 exhibitors. It seems international visitors are interested in the export market; that is, sourcing, manufacturing and shipping from China.
Sep 3-5, Shanghai, China
 

Pet Business News

VCA Antech, Inc. (NASDAQ:WOOF) reported a profitable first quarter of 2008 as it continues to acquire animal hospitals and grow its laboratory business. Although elective procedures tend to diminish when consumers cut back, this strength highlights the fact that the bar is moving; some services once considered elective are now being considered necessities. VCA seems to be on its way to becoming the managed care company for pets, primarily dogs and cats.

Utilizing the pet industry to differentiate a business in a crowded market has been a popular strategy the last few years. Check out Peninsula House Hound dog-friendly real estate website, with features like 'Search Homes Near Dog Parks'.

Anyone watch Nascar this weekend? Dog food marketing is big business in the U.S., and Mars, Inc.'s Pedigree brand is prominently featured on Kyle Busch's number 18 car. This sports sponsorship by Mars draws an average of about 6 million viewers per race, according to ACNielsen ratings for April and May of 2008. But the company didn't stop there; Mars' Nascar marketing campaign is directly tied to its adoption drive, illustrating the importance of the adoption channel for generating long-term brand loyalty in the pet sector.
 

Ralph Lauren Dog Accessories

More than four years after introducing a popular dog polo shirt and cashmere sweater, Ralph Lauren now boasts 16 different dog accessories, including a wider range of trendy shirts, a hoodie, a trench coat, and leather collars and leashes.

Catering to the broad swath of American consumers that own dogs, every retail store allows dogs. And the company's website has vastly improved since I last blogged about it three years ago.

It seems to be a solid strategy to appeal to certain pet parents, with dog products and marketing co-ordinated at the retail level and online. This picture, for instance, is for a human tote bag sold on a Mother's Day page.
 

Pet Vacuum Cleaners

Browsing Williams-Sonoma's website, I noticed a $799 Miele Dog & Cat vacuum cleaner, made specifically to handle pet hair.

It seems the response to pet owner demographics, or at least Consumer Reports testing in 2006, has been swift, with pet-specific lines now available from Bissell, Eureka and Dyson, all retailing for under $200.



Two-thirds of American households own a pet of some sort. Forty percent of U.S. households own a dog. That's a large market, with lots of pet hair, suitable for an expensive dog & cat vac. Eight hundred bucks is a lot for a vacuum cleaner, but they are really nice. Even the lowest-end Miele model (the one I own) is fantastic.
 

Pet Owner Spending Trends in the U.S.

A new report has just been published on nationwide pet owner spending trends.

The aging population, childless consumers and the ascendancy of high-income baby boomers are analyzed by their pet spending habits. Charts and tables are included using data from the Department of Labor, Bureau of Labor Statistics that highlight core trends in U.S. consumer spending by income, age, general region, and family composition.

The Pet Industry 2008 Strategic Outlook is our annual report, written for businesses marketing to pet owners.
 

PR Strategy Needs a Recall

Menu Foods, one of the largest pet food manufacturers in North America, announced a recall this morning but failed to name affected brands, saying they will be available tomorrow morning on their website that currently doesn't function. Since they make pet food for Wal-Mart (WMT), Safeway (SWY), Kroger (KR), and many more, people were left understandably confused.

So far, Proctor & Gamble Pet Care (PG) and Safeway have taken the proactive move of recalling their labels possibly affected by their manufacturer, possibly compelled by Menu Foods vague press release that resulted in Friday night newscasts in major cities across the nation asking questions but getting no answers.

[update]
Purina (Nestle), Hills (CL), Petco and PetSmart (PETM) also made proactive moves before the affected brands were announced.

Coach pet accessories in 2006

New for the 2006 holiday season from Coach is a private label pet carrier costing $398. This continues a relatively slow expansion into pet supplies for the company.

Related Posts:
Aug 2007 Paco Collars - Handmade Leather Dog Collars
Sep 2005: Coach dog collars and leashes online
Jun 2005: Coach pet accessories in 2005

Luxury Pet Products

Retailers continue to appeal to pet owners. Whether looking for broader customer reach or attracted by high profit margins, this trend is evident across the range of retailers, from dollar stores to luxury boutiques. Even Target and Wal-Mart are moving upmarket, but what's at the top?

Neiman Marcus just released the new Christmas Book, featuring a much larger selection of luxury pet accessories than last year, including a $185 dog leash that matches personal accessories and an Italian-designed dog house for $8,000. Notably, there's also a Neiman Marcus-branded pet throw costing from $485 to $800.

Macy's launched it's second pet department in Philadelphia last month. The first 'Pet on the Woof' boutique opened in NYC last year.

Harrod's in the UK holds an annual pet fashion show called Pet-a-Porter.

And one of my favorite online luxury retailers, Pampered Puppy, recently wrote about brand extensions from the likes of Kate Spade, Von Dutch and Burberry.

Read More:
Neiman Marcus
Marco Morosini
Pampered Puppy

Disney Expands into Pet Market

Reuters reports that The Walt Disney Company (NYSE:DIS) plans to expand its range of pet products globally, producing collars, clothing and bedding for pets by licensing its valuable portfolio of characters.

Current lines include a Pirates of the Caribbean aquarium and an Old Yeller private label dog food. Details on the expansion plans were not provided.

Licensing arrangements generate about 70% margins for Disney, and consumers worldwide bought $21 billion of products branded by Disney last year ("Disney barking up a new tree with pet products," by Jeffrey Goldfarb, Reuters, June 7, 2006).

Organic Pet Food by Wal-Mart Stores, Inc.

The pet food industry continues to evolve at a fast pace. Just two months after Target Corp. (NYSE:TGT) introduced a private label premium pet food, Wal-Mart Stores Inc. (NYSE:WMT) launched a private label, all natural, organic pet food called Natural Life.

Moving further upscale, Wal-Mart is also stepping up competition in the $14 billion market for pet food. It already sells Ol' Roy dog food in the non-premium dry segment, and has now entered the organic pet food market, which is growing at high double digit rates annually.

Ol' Roy is a Wal-Mart private label manufactured by Doane Pet Care Co., a leading supplier of private label food to many companies. Doane announced today that it is being acquired by privately held Mars, Inc., owner of Pedigree, Sheba and Whiskas pet foods.

So Mars now owns the company that makes Wal-Mart's top-selling dry dog food. Mars launched a $200 million advertising campaign for Pedigree in '05, which is not sold at Wal-Mart and does not directly compete with Ol' Roy, but Wal-Mart's new entry into the premium space should be interesting to watch. I would assume (but don't really know), that Doane's also manufactures brands that compete directly with Pedigree.

Del Monte Foods Co. (NYSE:DLM) recently bought the Meow Mix and Milk-Bone brands for over $1 billion.

The Proctor & Gamble Company (NYSE:PG) bought Iams in 1999 and brought it out of veterinarian offices and into 25,000 retail outlets, developed a tartar control coating using processes from Crest toothpaste, and turned Iams into the nations top pet food brand by dollar sales according to AC Neilsen with 10% of retail sales in Sep 2005. In 2006 P&G will debut a tartar control pet treat and possibly pet shampoos and odor removers as well ('Pets are People Too, You Know,' Businessweek Online, Nov 28 2005).

Colgate-Palmolive Company (NYSE:CL) owns Hill's Science Diet, which was sold primarily in the vet channel until last year when it became available in PetSmart, Inc. (NASDAQ:PETM) retailers with in-store Banfield hospitals. Similar to Procter & Gamble, it seems Colgate-Palmolive is well positioned to use existing processes and technologies to produce odor control products from pet shampoos to fabric cleaners.

Colgate today announced first quarter 2006 results. Sales rose 5 percent to $2.87 billion from $2.74 billion, with the oral, personal and home care segment up 4.3 percent to $2.49 billion and the pet nutrition segment up 7 percent to $385.3 million. Hill's sales accounted for 13 percent of the company's total sales.

Nestle Purina PetCare owns many brands including Alpo, Beneful, Pro Plan, Purina One, Puppy Chow, Fancy Feast, and Friskies. Headquartered in St. Louis, Missouri, where Ralston Purina Company was founded more than a century ago, the company is part of the Swiss-based Nestle S.A. - the world's largest food company.

Marketing to Pet Owners?
Check out the Pet Industry Strategic Outlook by Dillon Media.

Target Launches Premium Pet Food Label

Target Corporation (NYSE:TGT) announced today the launch of a 'super-premium' private label pet food, firmly placing itself as a competitor to PetSmart and Petco in the pet food and supplies category.

According to the company press release, 'The LIFELong line of pet food features five scientific formulas, each offering high-quality protein such as real lamb and chicken; antioxidants such as vitamins E and C and selenium; omega fatty acids such as linoleic acid, and other premium ingredients. Designed to provide unconditional pet nutrition, LIFELong pet foods help to support healthy immune systems and cardiovascular health, promote strong muscles, bones and teeth, freshen breath and maintain visibly healthy coats' (source: target.com).

Related posts:
Jun 2005: Target Pets TV Ad Campaign
Apr 2005: Target Unleashes Pet Website

SpongeBob and his pet snail

SpongeBob SquarePants, the popular children's tv show on Nickelodeon, is showing a special 30 minute episode tonight with a pet-related theme.

SpongeBob's pet snail, Gary, runs away when his owner becomes distracted, only to be reunited when SpongeBob realizes he cannot take his pet for granted. Pretty simple, and looks funny. Read more here.

Being the top show in the 2-11 age range, and with over 12 million adults also watching, I wonder if pet snail sales are booming.

Some snail resources:

Apple Snails - a common aquarium pet.

Wikipedia on Snails - general snail info.

Man and Mollusc - some info on pet snails.

Snails for Kids - snail facts for children and teachers.

Halloween Dog Costumes

The American Kennel Club (AKC) reported that 10% of owners will dress their dogs in costumes for Halloween, 49% like the idea, and that women are 6% more likely than men to do so.

The survey, conducted for the AKC by Kelton Research, sampled 1,000 adults in the U.S., 500 dog owners and 500 non-dog owners.

Separately, a survey of shoppers conducted by August Partners for The Macerich Co. reported that 21% of 4,300 respondents will dress up their pets for Halloween ("Trick or Treat. Arf!" Retail Traffic Magazine, Oct 1, 2005).

This implies an interesting marketing experiment: selling pet products to non-pet owners. For example, amongst the ubiquitous Halloween-branded packages of candy at every grocery store in the nation could be similarly packaged dog treats targeted at people who do not own pets, but may find some at their door on Halloween. Also, "Trick or Treat" from a dog's point of view could have devastating effects on your flower garden or lawn.

My question is, has this been attempted in any pet product category, and if not, is it only a matter of time?

Halloween tips for pet owners by the American Kennel Club.

Some dog costumes on the web:

Pampered Puppy is always a source of great dog accessories.

Petco's website has been heavily Halloween'd

PetSmart has a small image on the lower right of the page for dog costumes.

Target has dog costumes but they are difficult to find on their site.
 

Coach dog collars and leashes online

Well in advance of the holiday season, Coach, Inc. (NYSE:COH) has begun selling a new line of dog collars and leashes on its website.

Costing between $42 to $68 may seem expensive for dog collars, but these high-end pet accessories should appeal to the existing Coach customer, who might be used to paying the same amount for a keyring.

Related Posts:
Paco Collars - Handmade Leather Dog Collars
Coach dog carrier for 2006
Coach pet accessories in 2005
Polo Ralph Lauren dog apparel
Isaac Mizrahi and Michael Graves at Target.

Organic pet food industry

The USDA reversed an earlier decision and will continue to certify 'USDA Organic' labels for pet food. Although organic food - made without pesticides, chemicals or hormones - represents only $14 million out of the $14 billion pet food segment, sales increased 63 percent last year, according to the Organic Trade Association.

PetSmart to rebrand with new logo

PetSmart, the nations largest pet retailer, will reposition its brand in the marketplace, introducing a new logo and nationwide advertising campaign on September 7.

"Mart to Smart" represents the culmination of over a year of planning, according to the company, and the new marketing strategy aims to develop brand awareness and bring in new customers in target markets.

Nationwide television, magazine and radio advertisements will emphasize pet food and low prices, introducing the new brand in the company's largest ad campaign in the last few years.

The retailer will emphasize 'Smart' over 'Mart' and has released previews of the new PetSmart TV commercials.

Related Posts:
Target Pet TV Commercials
Pets in Advertising
Pets in Catalogs

Dreyers dog treats

The Los Angeles Times reported today that Dreyer's, the nations largest ice cream company, is expanding further into the dog treat market by offering a second flavor of ice cream for dogs.

The first flavor of Frosty Paws Frozen Treats for Dogs has been around for years and, according to the newspaper, has become a $10 million product line generating the highest profit margins of all Dreyer's products.

The article discusses how the new flavor addresses an interesting marketing issue: how to sell dog food and human food in the same aisle, even the same freezer. Since both Purina dog food and Dreyer's ice cream are controlled by Nestle, the result is a peanut butter flavored, Purina branded dog treat.

("Dreyer's Scoops Up a Share of Doggie Treats Market," by Jerry Hirsch, Times Staff Writer, Los Angeles Times, Aug 18, 2005)

The founders of Dreyer's Grand Ice Cream, sold as Edy's east of the Rockies, invented Rocky Road ice cream during the depression from their headquarters on Grand Avenue in Oakland, California.

There's a handy store locator on the website: frostypawstreats.com.

And the San Francisco Chronicle just published (Aug 23) a comprehensive history of Frosty Paws here.

Coach pet accessories in 2005

Coach, Inc. (NYSE:COH) is gearing up for another holiday season full of innovative marketing strategies by once again taking advantage of the $35 billion pet industry. While not currently available, Coach pet accessories will be re-introduced during the critical holiday shopping season in 2005.

"For the holiday period, Coach's popular core assortment of collars and leashes will be back again, both online and in-store through the company's Coach by Special Request gift guide," said Andrea Shaw Resnick, vice president of investor relations at Coach, in an interview with Dillon Media.

Visitors to the website and the store will have 24 hour shipping options available, no doubt in order to quickly raise their pet up to their own fashion standards.

Related Posts:
Paco Collars - Handmade Leather Dog Collars
Coach dog carrier for 2006
Coach dog collars and leashes available online
Polo Ralph Lauren Dog Apparel
Isaac Mizrahi and Michael Graves at Target