(By Jason Simpkins) During a recession, investors typically look to consumer staples, such as food, medical care and utilities. But one of the most overlooked, recession-resistant industries is the pet care industry, where sales of food and medication have helped a handful of companies turn a sizable profit.
About 63% of U.S. households own a pet, according to the American Pet Products Manufacturers Association (APPA). That equates to more than 69 million households, up from 64 million in 2002 and 51 million in 1988 when APPA began tracking data.
About 75% of dog owners and more than 50% of cat owners consider their pet a member of family, and about 80% of dog owners and 63% of cat owners buy gifts for their pet.
“It’s a substantial market,” says Eugene Fram, a globally known market expert and a retired Rochester Institute of Technology College of Business marketing professor. “The numbers bear that out with more than 60% of households having a pet. It’s a good business and a great target market” to pursue.
Americans will spend $45.4 billion on pets in 2009, according to the APPA. That’s a 5.1% increase from 2008, and nearly double pet spending a decade ago.
Sales of pet products at supermarkets, drug chains and mass-market retailers, were up 11% percent for the 52 weeks ended April 18, according to Nielsen Co. data. But the big winners continue to be specialty shops.
PetSmart Inc. (Nasdaq: PETM), PetMed Express Inc. (Nasdaq: PETS) and VCA Antech Inc.
