The Pet Industry

The Future of the Pet Industry: Profiting from our Changing Demographic Trends

 

GOLogoweb

 

A Preview of APPA’s June 27th Webcast

On June 27th, I’m excited to moderate THE FUTURE OF THE PET INDUSTRY: PROFITING FROM OUR CHANGING DEMOGRAPHIC TRENDS. Our presenter will be Michael Johnson, Vice President of Marketing & Information at Chuck Latham Associates. Michael specializes in CPG / FMCG Marketing, Analysis & Research across the Food, Drug, Mass and Pet Specialty Channels.

Michael gave a terrific presentation at PIJAC’s Top-To-Top conference in April. He revealed fascinating data about the changing demographics in this country and how it will affect the pet industry. I thought it would be a perfect opportunity to follow up with an educational webcast that addresses the question: “So as a pet product manufacturer, how can I benefit from this demographical information? Given that there are some significant changes coming our way, what shall my strategy be to make sure I don’t get left behind?”

So on June 27th, Michael will present an overview of the demographical changes, and then will offer suggestions and solutions to take advantage of these changes. To whet your appetite to attend our webcast, I asked Michael to put together some highlights from his Top-To-Top presentation:

The pet industry has grown to be one of the U.S’s most viable business segments, posting solid year-over-year gains for the past 20 years; with several of those gains happening during a recession. Pet has shown this strength and resiliency because it has become a very emotion-driven sector. Pets are no longer just animals – they are members of the family, and consumers have shown little willingness to cut back spending on these family members.

Today’s pet industry, like much of the U.S. economy itself, was built largely on the earning and spending of the Baby Boomers, that ambitious and product-hungry generation of nearly 80 million Americans born between 1945 and 1965. This group created more disposable income than had ever before been seen and also greatly elevated personal consumption spending.
But this segment is now aging. In fact, nearly 10,000 boomers turn 65 every day, and will continue to for the next 18 years. While retirees continue to be a great pet market, studies show that once a person reaches their early 70s their affinity and ability to interact with a pet significantly decreases. To that end, this key pet segment will be dropping out of the market over the next twenty years, which means we need to be looking at the next key consumers now. Who might they be?

Today, other generations (Gen X, Gen Y, and Gen Z) do not control nearly as much wealth, and are living in tough economic times. Gen X, the smaller generation born between 1966 and 1984 and the children of the boomers, is the first cohort in U.S. history to not do as well as their parents did. Gen Y, born between 1984 and 2002, is a very large and ethnically diverse segment, however, they are growing up with a lot of economic uncertainty, in a tough job market, and have more student loan debt than the nation has even seen. Gen Z, children born after 2002, are digital natives, and this cohort will be fully multicultural. However, recent studies indicate that kids today, with so many demands on their time (piano, soccer, gymnastics, t-ball, and hours of video gaming) are showing less interest in pets than previous generations.

In addition, white population growth has slowed, while minority population growth is booming. This is noteworthy as over 90% of the pet owning households in our country are white.

With the country changing as it is – economically, demographically, and technologically – who will be the next great marketplace? Twenty years from now, will we be able to say we made the moves necessary to attract new consumers and to market to new, untapped demographics to ensure the pet market remains viable? Join us on June 27th to find out more!

Carol Frank of Boulder, CO, is the founder of four companies in the pet industry. As a Managing Director at SDR Ventures Investment Bank, she is a registered Investment Banker and leads the team in executing pet industry transactions including M&A, capital formation and strategic advisory services. She is also the owner of BirdsEye Consulting, the consummate source for pet sector consulting expertise in licensing, executive recruiting, market research, and sales channel strategy. She can be reached at birdseye@carolfrank.com.

 

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2013 Pet Industry Valuation and Deal Activity

The first four months of 2013 saw increased transaction activity in the pet industry, resulting in 10 announced transactions: 8 M&A deals and 2 private placements. Pet Transactions are on pace to exceed the total of 29 announced transactions in 2012. The pet industry continues to experience premium valuations compared to consumer products; strong, growing brands tend to sell for 1.0x to 2.0x revenue or 6.0x to 12.0x EBITDA.

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The State of the Pet Bird Segment

The first twenty years of my career in the pet industry were focused on the pet bird segment.  When I opened my pet store in Dallas in 1987, the bird craze was in its infancy.  Many of the birds I sold in my store were wild caught.  Thankfully, the Wild Bird Conservation Act passed in 1992, outlawing the sale of wild-caught birds and opening the flood-gates for the multitudes of hand fed baby parrots that were being bred throughout the United States.  The bird segment soared throughout the 90’s and has been in a steady decline ever since.  According to the APPA Pet Owner’s Survey, there has been an almost 30% drop in pet bird ownership from 2002 to 2012.

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Are You Curious How to Grow your Business in 2013?

Ask A Pet Industry Financial Specialist!

 – What is my company worth today and how can I make it more valuable tomorrow?

 – Pet Industry Mergers & Acquisitions Activity and why NOW is the time to take action if you are thinking of buying or selling.

 – How do I access capital to grow my business?   

 – How will the new tax laws affect me?  

 – Should I consider licensing my patented product(s)?

 – What is the hiring market like for C-Level Pet Executives?

 

Carol Frank
Sign Up NOW!
Only 8 slots available.
(Including several the afternoon of the 19th)
To schedule your 30 minute private one-on-one session with Carol Frank please call or email Mindy Headrick:
(720) 221-9220
mheadrick@sdrventures.com
 Meeting Room: 202B

 

The utmost of confidence is assured. Non-Disclosure Agreements will be available on site.

Carol Frank, MBA of Boulder, CO, is a former CPA and the founder of four companies in the pet industry. As a Managing Director at SDR Ventures Investment Bank, she is a registered Investment Banker and leads the team in executing pet industry transactions including M&A, capital formation and strategic advisory services.  She is also the owner of BirdsEye Consulting, the consummate source for pet sector consulting expertise in licensing, executive recruiting, market research, and sales channel strategy. She can be reached at cfrank@sdrventures.com.

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The New Pet Industry Sustainability Coalition

AN INTERVIEW WITH FOUNDER CHRIS BENTLEY

As a fellow Boulder resident, I know Chris Bentley through his many community activities, including serving with me on the University of Colorado Deming Center for Entrepreneurship Board of Directors. Chris heads up Deming’s Sustainability Council, a topic that is also near and dear to my heart. Chris has been working on increasing the focus on sustainability in the pet industry for several years, so I was very encouraged when he invited me to the inaugural meeting of the Pet Industry Sustainability Council (PISC) during Global Pet Expo. I was impressed with the turnout for a first-ever meeting and even more excited when I heard details about their mission and vision.

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