In the United States, we LOVE our pets! To most of us, they are a big part of the family. In fact, 68% of US households currently have a pet, a figure that has jumped from 56% in 1988. Today more of our furry friends are moving out of the backyard and into the bedroom. This increased love for our pets has led to record pet related spending. That’s why we created a Spector™, Pampering Our Pets, that attempts to capitalize on this recently developing trend.
Last year, Cramer named “humanization of pets” as one of the top themes of 2017, mentioning increasing pet ownership and the lack of large scale players in the sector as reasons why he liked the space. He also likes that they are predominantly cash businesses that don’t rely on significant reimbursement from the government.
Last year, the average pet owner spent almost $130 per month on their animals according to a survey of pet owners. Whether through vet visits, medicine, food, treats, learning tools or other offerings, many companies are competing to fill the ever-changing demands of this industry. New high-end, organic dog foods and healthier dog treats are popping up daily, as well as new types of shampoos and medicines. Even fish owners, which are the least expensive pet to care for, spent over $60 per month. This is clearly an industry with plenty of room for growth.
In addition, possibly the greatest quality about this space as an investor, is people will spend money on their pets through ups and downs. In fact, during the great recession of 2009, pet-related companies actually made money. American Pet Products Association figures showed pet spending in 2009 grew 5.4% to $45.5 billion, even as the rest of the retail world was cratering. Some even felt the recession was a blessing, citing that the worse we feel, the more we would cherish and spend on our animals. This shows that consumers will cut back on a lot of things before their furry companions.
It’s clear that pets are becoming more like humans every day. The more we treat them like humans, the more money we are likely to spend on them, like humans. Each day as you look around and see more retail stores, restaurants and offices becoming pet-friendly, realize these are conscious business decisions acknowledging pets’ impact on our lives. As our pets become more intertwined in our daily activities, businesses which are positioned to capitalize should make lots of money.
For a variety of investment reasons, this area should continue to be very appealing. Whether though lifesaving medicines or the latest new gadget, consumers will continue to find ways to spend more and more money on their pets.
The pet-related companies which we determine to be the leaders are the ones that will be represented in “Pampering our Pets.”
So, the next time you’re thinking to yourself, “wow, I’ve spend a lot on my pet today,” don’t forget that you could be investing in those companies who are collecting your money. If you’re already interested, contact DreamWork Financial Group to learn if the “Pampering our Pets” Spector™ is a fit for your portfolio, or if we have another Spector™ that is even better.