Print this Page

Unit 4: Pet Needs/Economics

yellow fish

The pet industry is a huge economic force in the today's world. Steadily growing, it has shown itself to be remarkably recession proof. In 2014, an estimated 58.51 billion dollars (58,510,000,000) will be spent on pet-related goods and services in the US market. In 1994, (the first year that data was collected), that number was in the 17 billion dollar range. The amount of money spent on pets doubled in 10 years and has steadily increased every year since.

Product/Service Billions of Dollars
Food $22.62 billion
Vet Care $13.72 billion
Supplies/OTC Medicine $15.25 billion
Pet Services: Grooming and Boarding $4.73 billion
Live animal purchases $2.19 billion

Breakdown of estimated sales (2014) According to the American Pet Products Association.

If we look closely at the table of actual sales of pet supplies and services, we see that Americans spend the most on food for their pets, followed by veterinary care, supplies, and over the counter medications. Over three billion dollars are spent on pet services such as grooming, boarding and pet walking. Note that the least amount of money is spent on live animal purchases, or the cost of the pet itself.

Pet Economics

Press play button

The pet food industry is a huge industry and has a very competitive market. When you visit a grocery store, you’ll see that more space is devoted to pet foods than baby foods. (Of course a bag of dog food takes up a lot more space than a jar of baby food, too). The first commercial dog food was a baked biscuit of meat, vegetables, wheat flour and salt that was manufactured in the 1860’s and marketed through dog show sponsorship. Canned dog came along in the 1920’s following WWI.

Watch this video of a vintage Ken-L Ration dog food commerical.

Regulation of the Pet food Industry

Press play button

The pet food industry is regulated in several ways. First, it is overseen by the Food and Drug Administration, a federal government agency. The FDA is responsible for making sure that the food our pets eat isn’t tainted or improperly labeled. This is why the FDA was involved in the massive pet food recall in March and April 2007. They also oversee therapeutic claims that are made. Most pet food companies also meet AAFCO standards which are the trade standards set up by the industry itself but have government representatives on the board. AAFCO sets up protocols for determining nutritional evaluation of foods.

Pet Food Labeling

Press play button

By law, all pet food labels must include a number of things.

  • Guaranteed analysis
    (minimal amounts of crude protein, crude fat, maximal amounts of water and crude fiber). These are laboratory derived values and do not necessarily reflect the digestibility of the food.
  • Ingredient guarantee
    List of ingredients, as on all food with the ingredient that is first on the list being the one in the highest quantity in the food.
  • Name of productpet food label
  • Name and address of distributor
  • Statement of nutritional adequacy
    "Complete and balanced for all life stages” AAFCO feeding trial standards. Testing to make sure the food will support the animal at the designated stages of life. These labels are based on feeding trials of the food to animals at different life stages.

Visit the Pupculture Magazine site to get a better idea of how to read a pet food label.

Types of Diets

Press play button

Commercial pet food comes in many forms. Many small animal foods (mouse, guinea pig, rabbit, and bird foods) are pelleted. Each bite of the food is formulated to be identical and complete. Dog and cat foods are not generally made this way because they are not very palatable to these species. They tend to form a paste in dogs’ mouths and are difficult to eat.

Types of Pet Food

Press play button

bowl of raw, wet, and dry pet food

Canned Food
Canned food is commonly used to feed dogs and cats. Canned food has a high moisture content so tend to be more expensive. Much of what you are paying for with canned food is water, but it does tend to be higher in fat and protein.

Dry Food
Dry food is the most common type of food fed to pets today. It is manufactured using an extrusion process. The food is exposed to high heat and pressure which sterilizes the food and allows it to be made into different shapes and sizes. While some animals care about the “feel” of the food and may like eating small nuggets or large nuggets, most of the shapes and colors of the food are for the owners benefit. Foods aiming to please a “natural food conscious consumer will probably put more colors, including green, red, and orange into the food to at least give the appearance of variety. Dogs’ and cats’ vision probably doesn’t include enough color for the animal to tell any difference. Most of the flavor in the food actually comes from fat and flavor enhancers that are sprayed on the surface of the extruded food. This increases palatability and the caloric content of the food.

Pouch Food
There are also a variety of semi-moist and “pouch” foods which are manufactured which fall between the canned and dry as far as moisture content. Palatability is a very individual thing for specific animals and some pets will prefer one type of food over another. As long as they are being fed an adequate amount of a food that has been tested to be nutritionally complete, they should be fine.

Raw Food
The idea of a “BARF” or bones and raw food diet is gaining in popularity. It may be commercially prepared or one that owners prepare themselves. While many people swear that this is the best way to feed a dog, it must be remembered that dogs are not wolves and they have survived and evolved over thousands of years, by basically eating our leftovers. My biggest concern with raw food diets is that there are many bacteria, parasites and viruses that can be spread through raw meat. Salmonella, botulism, and E.Coli can affect pets, as well as their owners and can cause life-threatening disease to both.

Obviously other diets are used to feed other species. Carnivorous reptiles may be fed live or pre-killed food. Some snakes, in particular, will only eat live food, so it is important that reptile owners be prepared to provide a diet that their animal will actually eat.

A lot of people wonder about home cooked diets for their pets. This is the best way to insure what is actually going into the food but can be very difficult to accomplish. Dogs and cats have very different nutritional needs than we do. Cats in particular, have a number of essential amino acids and fatty acids that human bodies can make on their own, but which need to be provided directly into cat’s diets. If an owner is willing to put the time and effort into learning to make a good balanced diet for their pet, it can definitely be done, but the risks of malnutrition from throwing together a diet for a pet without doing the necessary research, far outweigh the risks of them becoming sick from a commercial food.

Treats
Treats are a rapidly growing segment of the pet industry. These vary from chew treats, such as rawhide or other animal by-products to lactose free ice cream. While many treats are balanced nutritionally for pets, they do tend to be quite high in calories and can quickly add to obesity in pets.

Prescription Diets

Press play button

hill's company logo

Prescription diets are a special segment of the pet food industry and are specially formulated diets that are sold for therapeutic value through veterinary offices only. A veterinarian, Mark Morris, designed the first prescription diet in the 1930’s for his patient, “Buddy”, a seeing eye dog that suffered from kidney disease. It was found that dogs with kidney disease improved if they ate diets low in salt and protein. Because of Buddy and other’s success, Dr. Morris contracted with the Hill Packing Company and began producing Hill’s K/D diet in 1943. Hill’s has gone on to become one of the leading producers of prescription diets and has been joined by a number of other companies. These foods all make health claims that must be documented in order to be sold as therapeutic food. There are pet diets now for joint health, heart disease, kidney disease, intestinal disorders, allergies, and even enhanced cognition.

Veterinary Industry

Press play button

Veterinary care is also a significant expense for pet owners. This chart shows the average yearly expenditures for the major species.

Species Dogs Cats Birds Horses
Vet expenditure per household per year (mean) $378.00 $191.00 $33.00 $373.00
Vet expenditure per animal (mean) $227.00 $90.00 $14.00 $133.00

2012 AVMA U.S. Pet Ownership and Demopraphic Sourcebook

Basic Veterinary Needs

Press play button

veterinatian looking at dog with man

All animals require some basic Veterinary care. Preventive Health Care includes things like vaccinations, which prevent disease in dogs, cats and ferrets, as well as control of internal parasites like worms and external parasites like fleas and ticks are also important. Routine checkups to check the health of your pet are also a good time to get information from your veterinarian about any other health care concerns you may have.

Spaying and neutering of animals that are not going to be bred is very important, both for keeping the population of unwanted animals at a minimum, as well as for promoting the long-term health of the pet. If an owner plans to breed their pet, they need to keep in mind that things sometimes go wrong during pregnancy and birthing (known as whelping in the dog and queening in the cat) and Caesarian sections are sometimes necessary for the survival of the mother and or the litter.

Despite our best efforts, pets do get sick sometimes, so treatment of illness should be budgeted in. And, while we hope that our pet won’t be the one to become injured or to get in an accident, these things happen quite frequently.

Veterinary Services

Press play button

Just as there are many types of physicians, there are also many types of veterinarians. All veterinarians are required to have a doctorate degree (4 years beyond undergraduate training) and to pass national veterinary board exams. They are then licensed by the individual state in which they practice. State license requirements vary but usually include further testing, as well as yearly continuing education requirements. Veterinarians may work out of their home, a truck or mobile hospital, or a small or large veterinary hospital. Licensed veterinarians can see patients, make diagnoses, prescribe medication and perform surgery. Most states require that licensed veterinarians provide emergency care for their patients, either on-call or through an emergency facility.

Just as human physicians can specialize in a particular field, veterinarians can also specialize in a particular type of medicine or surgery. To become “board-certified” in a specialty, veterinarians usually complete a 2-3 year residency program and have to pass another strenuous exam. While any veterinarian can perform surgery, an experienced board certified surgeon will be able to perform more delicate or uncommon surgeries (and charge a correspondingly higher fee).

Pet Insurance

Press play button

Since basically any medical or surgical procedure that is performed on humans can be performed on pets, you can imagine that the expenses can be quite high. Although health insurance in humans is actively under debate, it does provide a way for most people to obtain quality care. Since 1982, there has also been pet insurance, which many people take advantage of. The veterinary insurance policies vary greatly from company to company and how much an owner wants to pay in premiums and deductibles will affect what the insurance covers. Most policies cover catastrophic illness or injury, while some will also cover routine vaccinations and check-ups. Interestingly, many large corporations are starting to offer pet insurance as one of the benefits to their employees, just as they offer human health care, vision and dental insurance.

Pet Products

Press play button

dog wearing a yoda outfit

Another huge segment of the pet industry is pet product sales. This can include everything from “needs” such as leashes and collars to extras such as jewelry and clothes.

A number of companies still control the majority of pet product sales, including Hartz Mountain, Petco and PetsMart, but many specialty stores and boutiques fill niche markets, particularly in larger cities. Catalog and internet sales are becoming the largest players in the pet product industry.

Commercial licensing of pet products is also growing. People view their pets as an extension of their family, personality and style. Licensed products such as SpongeBob fish tanks, Omaha Steak dog treats and Eddie Bauer pet beds are becoming very popular.

Pet Services

Press play button

cat gravestone

Another place where Americans spend their pet dollars is on pet services. This is also a growing segment as busy people spend more money to have people take care of their pets for them. Doggy Day Care centers for dogs whose owners work long hours are growing in popularity. In addition, boarding kennels or pet resorts or spas provide a home-like atmosphere while we are traveling. Are these types of service excessive? I think it can be argued both ways. One of the social needs that we identified for dogs and cats is companionship. Is it fair to leave a young dog home all day alone? If they get lots of exercise and attention when the owner is home, and have adequate toys to play with while the owner is away, many dogs will sleep most of the day. For some dogs with behavioral issues like separation anxiety, however, being left home alone cause them to literally panic. A pet sitter or doggy day care may be an absolute necessity for them.

Publishing

Press play button

A less recognized element of the pet industry is the publishing field. One just needs to stroll through a book store to see the number of books and magazines that relate to pets and animals. Internet sites specifically targeted towards pet owners are also rampant. If one is interested in writing or publishing, this is certainly a career opportunity that may be available.

CONTINUE TO NEXT PAGE

Top of page