Marcel Bens is Managing Partner and COO at Emil Capital Partners .
Pet ownership in America has experienced unprecedented growth, with one survey showing 70% of households—or about 90. 5 million—now own a pet . Data shows the $100 billion pet industry is now poised to nearly triple to $275 billion by 2030 , thanks in order to a surge in new owners, favorable demographics and, most importantly, increased per-pet spending.
If you’re an investor, you might be seeing dollar signs already, but with this growth has come improved competition for consumer dollars. More startups are entering the market with innovative offerings to disrupt incumbent industry leaders, and not every startup offers what it takes. So where does a smart investor put their money?
At Emil Capital Companions, we’ve spent years identifying, investing in plus supporting the next great consumer brands, and here’s what we are seeing as the next frontiers with regard to growth in pet: better-for-you (BFY) dog food and treats, disruptive healthcare models such as telehealth and over-the-counter (OTC) medications, and overall pet wellness and more contemporary needs like gut health, anxiety or supplemental nutrition.
Humanization Of Pets
First, BFY isn’t just for humans anymore. Accustomed to investing hours online looking regarding the best quality products for themselves as consumers, digital natives of every generation—especially millennials—tend in order to spend more time searching on the internet to find better solutions intended for their pets. They’re increasingly voting with their dollars to get customized solutions that understand their pets’ needs, too: More than 50% of pet owners surveyed are willing to pay more pertaining to eco-friendly family pet care items , up to plus including food, where the particular global natural pet meals market has a value associated with $22. 8 billion . In the U. S., 60% of dog and cat owners surveyed are concerned about their pets’ nutrition . In 2020, 41% of dog owners surveyed bought premium pet foods and 39% of kitty owners purchased premium pet food.
Case in point: the growing popularity associated with gourmet fresh artisan dog food. Companies like Ollie prepare new recipes using whole food ingredients, cooked for nourishment and flavor and frozen for freshness. (Disclosure: Ollie has received investment from Emil Capital Partners. ) A service like this allows customers to tailor recipes for their pets, making use of technology alongside veterinarian expertise to ensure pets get the right portion of meals based on their own weight, breed, age, activity level and more.
Disruptive Healthcare Models
High vet bills have long been the bane of family pet owners everywhere, and owners spent more than $32 billion annually on vet care and product sales in 2021. New comprehensive and lifelong insurance plans, though, are unlocking the long-latent demand for more options to keep furry family members inside good health. We also see a broader selection of clinical diagnostic tools plus more extensive plans meant for veterinary treatment. In North America alone, private health insurance was bought for nearly 3. 5 million animals in 2020 , exceeding $2 billion in premiums.
As with BFY, telehealth and DTC is currently no longer only for people. Top retailers in the space are wading into the healthcare side of things, clearly indicating that this is a good area along with high potential and upside.
But startups are also making a play for dedicated pet parents who take health seriously and are usually finding quick success. Get Joy has already expanded beyond food and into on-demand vet services after raising a seed round within January 2022. PetFriendly, meanwhile, promises “human-proof” customized subscription boxes designed for flea plus tick medication and supplements with personalized packaging featuring pets’ photos. (Disclosure: PetFriendly has obtained investment through Emil Funds Partners. ) Seek out startups who are thinking beyond the first steps in to the market here—a great introductory product will be a good start, but building stickiness among customers takes multiple product offerings alongside value-add services, information or customization.
New Age Associated with Pet Wellness
Human trends for example gut health, mental health, immunity, oral care, skin care and anti-aging through supplements plus other products have also spread in order to their animals. Grooming parlors are now pet spas with animal-friendly versions associated with mani-pedis, bodywork such as massage and much more, and they’re a $5 billion dollars business all on their own —but just for investors leery of capital-intensive retail expansion, there is a potentially more lucrative option in pet wellness.
Let’s talk about dietary supplements. Zesty Paws, which was acquired for $610 million last year , is the leader inside pet supplements, boasting treat-like products such as hemp-infused chew sticks plus salmon oil to help with skin, stress and allergy issues, as well as probiotics to support gut health. It’s the top-selling “multi-condition dog supplement brand” in the particular United States, and its two-year CAGR is usually a whopping 62% since 2020. Research is projecting the doubling within the size of the pet supplement market.
Other brands are instead focusing on putting a pet’s best face forward with toothbrush wipes or even other tooth-cleaning alternatives, ways to clear upward tear stains, and naturally derived ear cleaning items. Witch hazel, for example , offers been the staple in human skin care for decades thanks in order to its skin-clearing properties; right now it features as an ingredient in cleaning wipes for the purpose of pets’ sensitive skin around their eyes and ears . This not only appeals to family pet parents concerned with health, but also to those whose domestic pets regularly feature on social media and need to look their particular very best, showing the ability of products want this in order to appeal to different segments from the pet market.
In today’s current macroeconomic environment, it is important more than ever to offer unique products or services that work to add true value and solve real-life problems for consumers. The growing pet marketplace, from foods to wellness to wellbeing, has made it clear that customers now need the same for their household pets as they would with regard to themselves or other family members. The millennial generation , in particular, is a lot more willing to pay a premium price as it is considered necessary spending for the entire family members versus discretionary or an add-on. The particular trends we’ve invested in regarding years in consumer brands are transforming the dog industry at an even faster clip. Investors prepared to allocate capital to new pet styles and products could very well find they have some brand new best friends within their portfolios.
The information provided here is not investment, tax or even financial advice. You should consult with a licensed professional for guidance concerning your specific situation.