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.
 

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.
 

Barking at Google

Sometimes being independent sucks. Having no investments in any of the pet industry companies I write about gives my company legitimacy and allows me to maintain a truly independent market research firm.

But watching companies like VCA Antech Inc. (NASDAQ:WOOF) grow over the last four years sometimes makes me jealous. VCA Antech outperformed Google Inc. (NASDAQ:GOOG) over the last 12 months.

Note the interesting inverse relationship between these two very different companies as they rise. Click on the chart to enlarge.

Interested in the Pet Industry?
Check out the Pet Industry 2008 Strategic Outlook for an independent overview of emerging pet owner demographic and spending trends.
 

PetSmart, Inc. Nears All-Time High

PetSmart, Inc. (NASDAQ:PETM) celebrated its 20th anniversary this month by announcing a three cent dividend, payable on May 11, 2007, to shareholders of record at the close of business on April 27, 2007.

The stock is quickly approaching its highest point in 140 years. Dog years, that is.

Another company well-positioned after two decades in the pet business is VCA Antech, which also celebrated its 20th this year, as noted in an earlier post.
 

VCA Antech Gets an Optimistic Diagnosis

What better way to celebrate a twentieth anniversary than by watching the share price hit an all-time high? VCA Antech, Inc. (Nasdaq:WOOF) did just that, beating 2006 estimates and providing upbeat 2007 guidance, citing increases in just about everything from margins to revenues to average order size.

The company bought it's first animal hospital in 1986, and now owns 379 veterinary hospitals in 37 states, operates 33 laboratories that serve all 50 states, has about 10,000 employees and over a billion dollars in annual revenue.

Actively consolidating the veterinary channel, VCA Antech noted in its 4Q and Full Year 2006 conference call very strong growth in digital radiography (high-resolution digital x-ray images) equipment. Recent market penetration has established the company as a leader in this growing area.

Management attributes the company's 2006 growth to "the great market that we're in" and to the core execution of business processes and strategic plans

Source: VCA Antech
Video: WOOF Report

Marketing Veterinary Services?
Check out the Pet Industry Strategic Outlook by Dillon Media.
 

Looking toward 2006

The large pet specialty retailers took a hit in consumer traffic this summer due to a shift in consumer shopping behavior. High gas prices forced people to consolidate trips around a central shopping destination like the grocery store or home supplies store, resulting in fewer trips to PetSmart, Inc. (NASDAQ:PETM) and Petco Animal Supplies, Inc. (NASDAQ:PETC) and fewer purchases of high margin goods.

No kidding. Over the summer I found a coupon in the mail to visit the new PetSmart across town. It was for $3 off a large sack of premium food. Considering it would cost nearly that much in gasoline to drive there ($3.17 a gallon at the time), this hardly seemed worth an extra trip.

But pet services proved resilient to these changes, growing at over 20% all year. Petco announced in its 3rd Quarter conference call on Nov 22 that services customers also return to the store more often, and spend more per trip, than the average customer. Grooming is the major driver of this trend, according to Bruce Hall, president and COO of Petco.

The industry remains healthy and I believe will see 2005 overall growth above 4 percent. Central Garden and Pet Co. (NASDAQ:CENT), a major creator and supplier of pet supplies, forecasts net sales growth of 5-6 percent for 2006. While Petco and PetSmart's stock prices have declined over the last year, significant gains were seen in health-related pet companies like PetMed Express, Inc. (NASDAQ:PETS), VCA Antech, Inc. (NASDAQ:WOOF) and MWI Veterinary Supply, Inc. (NASDAQ:MWIV) during 2005.

Segments like premium food and health care saw a huge boost in consumer awareness and acceptance in 2005 due to mass-marketing and are poised to continue strong growth next year in a more competitive environment.

For businesses selling pet products and services, check out The Pet Industry Strategic Outlook Report by Dillon Media LLC.