Pet-food industry enjoys strong sales in weak economy
The Denver Post
Despite rising unemployment, credit-card debt and thinning discretionary spending, American pet owners remain loyal customers of an industry that is enjoying consistent growth.
The pet-food industry is fueled by consumers who won’t back away from spending on food and necessities for their animals, though they’re likely to pare down the family vacation.
The strong spending comes amid price increases in nearly every pet-food category, the result of rising costs of fuel, ingredients and transportation for manufacturers.
Dogs and cats, though, still feel the pinch in other ways, owners said. Fewer treats, new toys or accessories such as collars and leashes, even fewer trips to the groomer are all part of the cost savings.
“We’ve cut back for us all,” said Kathy Schmidt of Lone Tree, whose miniature schnauzer, Archie, has had to wait longer between clippings.
Though the family has trimmed back, Archie still eats pretty well because “he needs to eat what he’s accustomed to,” Schmidt said.
That’s one reason spending on pets remains robust, with total sales of all pet products topping $45 billion this year, a 5 percent increase, according to the American Pet Products Association. And retail sales of pet food are up 4.5 percent in 2009 at about $18 billion. Future pet-food sales are projected to top $21 billion by 2013.
It’s showing up at local stores, where boutique owners are enjoying growth as many of their counterparts catering solely to humans struggle.
“We’ve seen double-digit growth this year. The recession hasn’t really touched us,” said Deb Dempsey, owner of Mouthfuls in Denver’s Highland neighborhood. “We’re not selling tons of bedding and clothing, and treats and durable goods, the foofy stuff, has stayed down.”
Dedication to their pet’s health apparently has much to do with how owners spend.
“We have so many customers who say they’d eat macaroni and cheese before they’d cut back on their dogs,” she said.
The pet-food recalls of 2007 didn’t leave the industry unscathed but did reinforce owners’ focus on quality, not price.
“I’ll go to McDonald’s and eat lunch from the dollar menu, but a can of food isn’t something I want to skimp on,” money manager Pat Janssen said of his dog-food buying. “But there are fewer toys and chews in the bag these days.”
Prices are stabilizing, but consumers shouldn’t expect too big a drop any time soon. Much is because of long-term supply contracts producers locked into when prices were already high, analysts say.
“We’re trying to cut back, though we’re not real good at it,” Mark Niederhauser said of his two chow-chows and papillon during a recent trip to PetSmart near Park Meadows shopping center.
“I just can’t deny the dogs.”