Profiting From the Pet Boom

Humans may not be acquiring pets at a pandemic-induced pace anymore, but they still are spending plenty on food, supplies, and services to take care of the furry members of their families.

Australia, Canada, and parts of Europe are leading the pet-market conversion to “non-traditional, more premium food and nutrition,” says Scott Ehlen, a director in Baird’s global consumer investment banking group. For the U.S., it’s a question of “how quickly, not if,” the trend will take hold, Ehlen says.

As people spent more time at home with their pets during the pandemic, they also realized their furry companions have a lot of downtime. Humans that have returned to the office want to make sure their pets stay happy and active, so many are putting their dogs in daycare facilities with cameras that allow them to check in to see how their pup is doing.

Pet grooming is another area that’s prime for investment. Ehlen says he takes his own dog to a groomer who keeps track of appointments on a paper calendar. “It’s impossible to get a hold of her, impossible to schedule,” he says. While bigger companies have grabbed more market share, independent, private companies are “still the birthplace of new brands, new innovation, and that could be coming from either new companies or new product lines,” he says. “When the category validates itself or the scale hits, then you may see one of the bigger players jump in through an acquisition.”

Before the stock market became more volatile last year, there was a “big queue of folks circling the wagons,” DePree says. Considering that the large consumer products companies are still trying to figure out how to grow this market, “over the next 18, 24 months, you’ll see some more stories become public.” For now, he says, “the demand for ways to play ‘pet’ outstrips the supply.”Pets aren’t exempt from humans’ obsession with tech, either.

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