By Thomas Kostigen
Must love pets. That could be an interesting requirement for investors looking to match with like-minded financial advisors. Or it could be an interesting investment requirement for companies to live up to.
The pet products and services business sectors have exploded in recent years, with myriad foods, grooming, and even walking and/or daycare options. Pet hotels are a thing now. Rachael Ray and Ellen DeGeneres have gotten in on the pet game with their own product lines. Of course, Cesar Millan the pet whisperer, has his own pet television show and menu of goods to purchase. And while there are numerous businesses that have carved out nice niches —from the Honest Kitchen to other organic and healthy minded companies — there are relatively few publicly traded corporations in the space. Petco, for instance, is one of the largest and most well-known pet stores in the country. But it is privately held.
To get publicly traded stock in the pet space, investors have to turn to conglomerates such as Mars PetCare and Nestle Purina. They manufacture loads of pet wares and they are worth having a look.
According to American Pet Products, the pet market in the United States last year tallied $95.7 billion in sales. That amounted to $36.9 billion on pet food and treats; $19.2 billion on supplies, live animals and over the counter medicines; $29.3 billion on veterinary care and product sales; and $10.3 billion on other services. This year the organization projects sales will increase to $99 billion, with $38.4 billion spent on pet food and treats; $19.8 billion spent on supplies, live animals and over the counter medicines; $30.2 billion spent on veterinary care and product sales; and $10.7 billion spent on other services.
Grand View Research expects the global pet market to surpass $200 billion in sales by 2025.
During these stay-at-home times, delivery services such as Chewy.com and Dog.com have also increased their profiles with the consuming public as more people take advantage of home deliveries and auto-fill orders. If there is anything pet owners know about their pets it’s that their diets pretty much remain the same (except for all of those treats!), so auto-fill orders are easy to schedule. Pet insurance, too, is taking off. For example, Petplan, a leading pet health insurance provider in North America, was recently acquired by Warburg Pincus, a global private equity firm focused on growth investing. That is strong testimony to the pet business as a whole.
To be sure, there is a whole community built around pets. And people who share in that community may want to seek out others in it for investment advice, or to buy what they know: the brand names of their pet’s favorite kibble and bits, or that grooming service Fido just loves.
Pet owners who love their pets may want to invest in the sector with the same passion. What they’ll get in return may not be some old tennis ball or stick, but a nice percent.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.