Earlier in August, Leona Hemsley, ex wife of hotel mogul Harold Hemsley, left $12 million to her white Maltese, Trouble. The dog is now quite the rich bitch, while Hemsley's grandchildren have been left high and dry. Now the question on everyone's mind is: what in the world is this dog going to buy? She can't possibly spend all that cash on kibble, bones and her yearly trip to the vet. In the present pet market, Trouble can splurge on plenty of things: fine pearl and Swarovski crystal pet jewelry, luxury food, designer duds and trips to the local doggy spa. Though Trouble's name is linked to much more money than most dogs-or most humans-a lot of other pet owners with no five star hotels to their names are supporting a new industry of high end pet products. In fact, in the US, pet owners are spending $41 billion on their
pets annually. In Canada, pet expenses add up to $4 billion each year. Additionally, the pet sector is the second fastest growing sector in retail-just behind consumer electronics-and is growing at a rate of six per cent a year. The pet spending rates are expected to keep increasing due to a combination of social change and entrepreneurial prowess.
When the kids leave home...
Fluffy gets their room
Though there is a general trend toward spending more money on pets that penetrates both the low and high end markets, there remain two distinct types of pet owners.
Laura Bennett, CEO and co-founder of Embrace Pet Insurance, divides these groups into "pet owners" and "pet parents."
"I think that more and more pet parents-and I call them pet parents specifically because out of all pet owners in the US, there is a subset of 'pet parents' who treat their pets like children-are looking for the higher end products and services," she explains.
Pet parents are a product of what Bennett refers to as "the humanization of pets," which she claims is also a result of changing demographics.
"As people age, of course their children leave home [and] they have more disposable income…The baby boomers are beginning this year, I believe, to retire. That means a whole bunch have gotten into that age group where their children have left home, basically the pets become the children."
Bennett also maintains that it has become more socially acceptable to drop the big bucks on pets. The moral of the story? You shouldn't be surprised when you return home and find your room has been turned into a haven for your mom's new Pekinese dog, Princess Maria.
Who's cashing the cheques?
There's no question about it; entrepreneurs who have broken into the pet sector with luxury pet goods and services are making money. According to Bennett, pet hotels, like the Barkley Pet Hotel and Spa in Cleveland, are booked solid. Even Wal-Mart has started filling its shelves with products that pets will love.
"If you look at Wal-Mart stores, they have way more space for pets. The low end is expanding, but the high end is there, too. People want an experience. They want to feel like they're buying something exclusive for their pets," Bennet explains.
Luxury pet retail is no longer only associated with little boutiques in L.A. where Paris Hilton buys tutus and the like for her personal bundle of joy-a Chihuahua, Tinkerbell. There are stores in Montreal where you, too, can dote upon on your pooch: Bark and Fitz , for example, is located at 4868 Sherbrooke West. Pat Egger, one of the store owners, explains his reasons for opening the store. "It's a franchise from Ontario. It seemed like a good opportunity, there was nothing exactly like this in Montreal at the time. It is a market that needs to be exploited."
Contrary to popular belief, pet boutiques are not just for heiress dogs. "We have a range of [people] just buying a ten dollar collar to people buying a $500 bag," Egger explains. Bark and Fitz specializes in dog products and carries "human grade foods" as well as chew toys made of organic unbleached fabrics. The boutique has become a high traffic store, serving 100 to 150 customers a day, and there are ten other locations of the Ontario-born franchise across Canada.
Online pet boutiques are also becoming a big part of the market. For example, the Silver Spoon Luxury Pet Boutique is now advertising "must have" fall clothing and carriers, including a $125 striped cashmere sweater and hat set. Clothes, accessories and jewelry aren't the only places where the market is growing. Doggy delis have become a popular place to get dog food as many pet parents have become just as worried about their dog's diets as their own.
Let them eat caviar
Gourmet food is another pocket of the pet market that is expanding at an astonishing rate. High end pet food has always been an option disregarded by the average consumer. However, this spring the FDA received upwards of 12,000 complaints during the biggest pet food recall in history. Foods were also recalled in both America and Canada. As a result, high end pet food sales have taken off.
"[Pet owners] realize they want to buy pet food that they feel comfortable with… even though it says 'Made in America', that doesn't mean the ingredients are made in America," Bennet explains.
Egger agrees, suggesting that the pet food recall may have played a part in his store's popularity. "People have realized it's important what you're feeding your dog," he says.
Pet owners aren't just looking for ingredients that are toxin-free or made in safe factories, they also seem to be looking for ingredients that will provide optimal nutrition for their pets. Recent studies done by Purina Pro Plan Selects have found that 90 per cent of those surveyed look for the healthiest foods for themselves and 82 per cent of those surveyed look for the same qualities in foods for their pets. The study also demonstrated the consumer concern for adequate protein, omega-3 fatty acids, antioxidants and vitamin A in pet foods, all of which are also important components of a healthy human diet.
Pet owners want their pets to have exactly the same nutrition and quality of life as they do, which is why pet health care has become a billion-dollar industry.
Universal pet health care
Not many people have heard of pet insurance. A decade ago, even fewer people were willing to spend a chunk of their monthly income on Buddy's shots or Spot's antibiotics. Now, there are some pet owners who want MRI's for their dog. Some are even demanding liposuction and rhinoplasty. According to the American Pet Products Manufacturers Association, Americans are spending $9.8 billion dollars on veterinary care and $9.9 billion dollars on over-the-counter medicine and supplies. Many pet owners experience financial turmoil when their cat needs surgery to remove kidney stones and the vet bill can run up to thousands of dollars. Pet insurance, explains Bennett, will not really save you money, but allows owners to avoid financial spikes and drops, which, in turn, allows them to pick the treatment that makes most medical sense, rather than the one that is cheapest. With pets becoming more humanized, pet insurance may soon become a common purchase.
"In Canada, Purina has just launched Purina pet insurance. It is actually incredibly expensive because they include everything in it, even routine care, which is why it's expensive," says Bennet.
Purina pet insurance for a four year old dog can cost up to $60 a month. However, Bennett feels the presence of bigger brand names in the market will make pet insurance more desirable.
"When you get the big brands coming in to a small niche product like that you know that they're going to spend a lot of money on making people aware of it because that's what their specialty is, using their name to imply credibility about the product. Pet insurance in the past has grown at about 25 per cent per year but I do think it's going to [grow more]," she says. Bennett's insurance company, Embrace Pet Insurance, insures just fewer than 5000 pets.
In Canada, only one per cent of pets are insured, while the US lags behind with less than one half per cent insured. Bennett goes on to explain that recent mentions of pet insurance on NPR, The Today Show and In Parade Magazine have made the existence of pet insurance better known and have increased the number of visits to her company's website.
'Bone-booths'
Petsmart has recently introduced a brand new meaning to the concept of kennels. They call it: "The Pet Hotel". The Pet Hotel features all day socialization (so your dog won't even remember you've left), as well as atrium rooms and personal suites. Atrium rooms are smaller and contain hypoallergenic lambskin blankets, while personal suites feature a cozy cot as well as a personal TV tuned to pet-themed channels like Animal Planet. Dogs can also talk to their owners at the "Bone-Booths," which are phone booths for dogs. Cats, on the other hand, are kept far away from the dogs so as not to get stressed out, and reside in 'Kitty Cottages' with lots of fixtures to climb on. They also boast 24-hour vet care.
Surprisingly, The Pet Hotel is not the only luxury pet hotel. In fact, they seem to be popping up everywhere. Bennett even suggests that pet hotels, spas and grooming salons are the best places for an entrepreneur to start in the market, because of their versatility in location. The advent of The Pet Hotel by Petsmart increased its service revenues by $450-million since 2007; it took up ten per cent of sales this year. Maybe the Ritz should put its hand in the mix.
Woof woof
Of course, there is always the fear that these dogs may turn into miniature humans with furry ears, and will start to buy into status symbols and demographic conflicts. Recently, on an episode of Ellen, there was a segment entitled "Pick the Rich Bitch." During this clip, Ellen brought three white dogs onto the stage walked by three different people. The object of the game was to pick out the "Rich Bitch." The dogs were given different tasks throughout the piece. The first one presented three bowls of food: regular kibble, high-end dog food and perfectly cooked pecan encrusted salmon. Not surprisingly, each dog reacted exactly the same way-they surveyed, sniffed and enjoyed a bit of each dish. In the next test, the dogs were presented three beds: a normal dog bed, a dog bed with 1000 count Egyptian Cotton sheets and a pile of cash. Unfortunately, the dogs were altogether too excited about seeing each other and sniffing out the room to pay any attention to the beds at all, which makes it clear: dogs aren't too caught up in appearance or luxury to turn up their noses at us just yet.
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Shaun Gereghty
posted 9/25/07 @ 4:57 PM EST
I am sure glad to be part of this growing industry. As a Pet training instructor for PetSmart I am excited of the 2009 slated date of Windsor Ontario's PetsHotel!
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