• by Nina Lentini , March 8, 2007

The American Pet Products Manufacturers Association (APPMA) Wednesday reported that health is driving the increase in spending on pets. This year, the group expects sales to reach $40 billion, up from $38.5 billion in 2006.

Store shelves are full of weight management foods, sports drinks, energy treats, treatments and supplements as well as organic and all-natural products. Pet insurance, veterinary care and pharmaceuticals are also strong, and continue to see healthy growth.

While the fast pace of new product introductions and innovation continues--especially health-related--pet services are growing just as quickly with a boom in pet hotels, doggie day cares, high-end groomers, trainers, yard cleaners, walkers, dieticians and massage therapists. And industry leaders such as PetSmart and Petco are reporting double-digit growth in services.

Other areas of note include continued growth of gift giving, continued consolidation of product manufacturers and retailers, and an increasing number of "human" product companies expanding their lines to include pet products.

In his report, "Pet Industry 2007 Strategic Outlook," Michael Dillon of Dillon Media LLC, an independent pet industry consulting firm, says that higher-wage earners--those making more than $70,000 a year--accounted for half of the $37.8 billion spent on pets in 2005. Just five years earlier, that demographic accounted for just 30% of purchases. Dillon explains that it shows a "strong trend toward the humanization of pets and owners' desire to pamper them"--themes he says will continue to drive the market.

"Pets are being used as surrogate children by two very different demographics," he says. "The aging baby boomers, experiencing the empty nest syndrome and having more disposable income, are one. And, at the other end, are busy, young professionals who are getting married later in life and having fewer children." In 2005, Dillon notes, 60% of entire pet industry was supported by consumers without children.

Another factor is that marketers are increasingly hitting the mark. "They know people treat their pets like children and that's where marketers go," says Dillon. "You see this in the pet food category, where premium foods approximate human trends in food. You have the Atkins diet, vegetarian, all-meat, and now organic pet food, which hit the mainstream last year.

"What's healthy and having a long-term, healthy relationship with a pet are used by marketers as a bit of a mantra."

The APPMA and Pet Industry Distributors Association annual trade show, held last month in Orlando, Fla., featured pet products from more than 760 companies around the world.

This year's Best In Show new-product winners included: Ramp4Paws, a vehicle ramp for dogs, Genie Side Walls for the CatGenie Self-Flushing Self-Washing Cat Box, the Magic Globe Aquarium, the Feathered Fun Wall Mount Bird Activity Center by Super Pet, Cool Pet Thirst Quenchers for horses, Animal Planet Pet Care Library (25 books) by TFH Publications, Doggy Knits, sweater knit kits by TFH Publications Inc., Laguna Pond Fountains, Zilla Combo Dome for reptiles, and the Premium Hexagon Hutch for small animals by Super Pet.