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Andrea Weiss calls Desi, her 10-year-old Chihuahua, "my everything." Weiss, a Los Angeles radio agent, takes her pint-sized pooch everywhere -- on vacation, on dates, even on visits to the dentist and gynecologist. She patronizes only dog-friendly restaurants and bars, and boycotts establishments that are not. A veteran traveler, Weiss has crisscrossed the globe with Desi. During a vacation in Cabo San Lucas, Mexico, last year, Desi enjoyed an in-room massage, side by side with Weiss. "Everyone knows me as Desi's mom," she says proudly.
And like increasing numbers of pet owners these days, Weiss loves to shower Desi with gifts. She shops at Wagging the Tail, a Los Angeles pet boutique that sells $225 vintage mink coats for dogs and $125 pet strollers.
Recently, she bought him a sterling silver charm in the shape of a bone. Price tag: $150. Desi has a collection of fancy collars and an enviable wardrobe of raincoats, angora sweaters, and a fluffy robe. One year, Weiss recalls spending $10,000 on her baby. "It's tapered off a bit, because he has a lot of stuff already," she explains. "But if I see something really cute, I have to get it."
NEW CATEGORIES. Weiss is hardly alone in her desire to pamper her pooch. It's a growing phenomenon: an increasing number of people now consider pets members of their immediate families. And that has spawned to a booming industry.
According to the American Pet Product Manufacturers Assn. (APPMA), consumer spending on pets continues to climb, expected to reach $35.9 billion this year, up from $17 billion a decade ago. No longer just Alpo and chew toys, the category of pet products has expanded to include everything from crystal-studded collars and organic kibble to upscale pet spas and vacation packages.
Excluding the equine category, veterinary services, and catalog and e-commerce sales, the association projects a compounded annual growth rate of 6% through the end of the decade, which Standard & Poor's Equity Research recently labeled a "strong base of growth" for pet-supplies retailers such as PetsMart (see BW Online, 5/3/05, "PetsMart's Animal Attractions").
FAR FROM SATURATED. Close to two-thirds of all U.S. households now own a pet, up from 56% in 1988, when the APPMA first started collecting statistics. That represents 69.1 million homes. With the growth in Baby Boomer and empty-nester populations, and more people delaying marriage and children, many pet owners have elevated the place that their animals have in their lives. "The biggest trend in the industry is the humanization of pet products, from food to even medical care," says Bob Vetere, APPMA's chief operating officer and co-managing director.
Although large corporations like PetsMart (PETM) and Petco (PETC) have certainly ridden this wave, small businesses continue to make their mark in the traditionally entrepreneurial industry.
At March's APPMA Global Expo in Orlando, sellers introduced more than 600 new toys, treats, and other products. "It finally dawned on marketers that when I shop for my dog, I am making the buying decision," Vetere says. "They no longer have to appeal to what is practical and what makes senses and have begun to attract a human frame of reference that is desirable for pets."
In response, many businesses are taking luxury items and high-tech gadgets from the human world and putting an animal kingdom spin on them: $900 sterling silver Gucci dog bowls and computerized smart-aquariums among them. Petsmobility, based in Scottsdale, Ariz., sells the Petcell -- a bone-shaped mobile phone that hangs around an animal's neck and allows owners to talk to their beloveds when they are away from home. "If there is a saturation point," Vetere says, "it's several years away."
TAKING NOTICE. Many of these entrepreneurs are pet owners themselves -- folks who needed personal solutions, devised them, and discovered a business in the process.
Four years ago, Brandon Hochman, a former professional snowboarder, came home to find one too many accidents on his carpet. So, he designed the Pet-a-Potty, a portable plastic tray with reusable, absorbent synthetic grass or real sod. "I decided to make it a commercial product after I saw the reaction people had to it," he says. "People train their pets on it and take it traveling. It's good in hotels, boats, or when people can't get home to walk their dogs."
Sales of Pet-a-Potty -- available online and at Target (TGT) and 50 other retailers for $169 to $259 -- totaled $230,000 in 2004. This year, he expects to triple that. And his Los Angeles-based outfit is planning to introduce an odor eliminator and extend its services to home-cleaning and sanitizing of the Pet-a-Potties. "I see this as a growth business," Hochman says.
Pet chains are taking notice. Once the go-to place for value-priced flea collars and puppy chow, the big names have greatly expanded their product selections to reflect the current boom. For instance, San Diego-based Petco sells pet insurance and offers grooming services on-site. And Phoenix-based PetsMart operates pet hotels, where animals lounge on hypoallergenic lambskin beds and watch pet-themed TV in their rooms.
Perman is a staff writer for BusinessWeek Online in New York
Edited by Rod Kurtz
BW MALL
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