Slide 1 Presented by Louis McCann PIJAC Canada Executive Director 2011
Slide 2 Portrait of our industry New generation of pet owners Legislating the future Thank you for joining us. We have invited you here today to discuss coming changes in our industry. We have put together a presentation based on information we have gathered from various marketing research and government colleagues as well as intel gathered during our own 24 years experience as an association. We have watched the industry for over two decades and this presentation is about what we see happening in the future. We offer this to you as insight into what our industry, your business may encounter in the coming years. We will cover 3 areas, portrait of our industry, new generation of pet owners and legislative trends.
Slide 3 Watch dog? Lobbyist? Activist? Enforcer? To begin, PIJAC Canada has been referred to as many things. watch dog, enforcer lobbyist activist
Slide 4 In reality we are a trade association. Our role is to support Canadian pet industry businesses by offering , trade events, professional development, networking opportunities and representing the interests of your business at all levels of government, the media and the public. We also collect statistics and information on our industry through our connections and relationships with other organizations, which is why we are able to make this presentation to you today.
Slide 5 Can anadian Pet Industry Break akdown 2011 2011 Vets 25.3% Animal Protection/Shelter 2.2% Retail 31.7% Pet Services 14.5% Grooming 20.6% Manuf/Dist 5.7% Lets begin by taking a look at the current state of the industry. Based on our data, we were able to create this graph to illustrate a general breakdown of the Canadian pet businesses. Retail is estimated at 31.7% Manufacturing and Distribution is estimated at 5.7% And if you add up the pet services categories: pet sitting, grooming, consulting you will notice that they account for a significant section of the industry as well at an estimated 35.1%. The pet services sector is one that has seen significant growth in terms of new businesses appearing. As the trend toward the humanization of pets continues, entrepreneurs are finding new ways to cater to pet owners and compete for a piece of the pie. With competition from the grocery and mass market sector and with 32% of pet specialty retailers reporting an annual loss according to industry Canada, it has become a natural move for some retailers to diversify the services they offer to their clientele. You may note that breeders are not included in this. The reason is because we did not feel we had enough data on this segment to give a proper estimate. This is one of many projects we are working on.
Slide 6 Global Pet Car are Val alue Sh Shar are By Key Re Retai ail Format ats (1998/200 (1998/ 004/201 010) 0) 50% are 40% alue shar 30% 20% % val 10% 0% 1998 2004 2010 Euromonitor International Grocery and mass market sectors have been a main distribution channels for pet food because of convenience and being able to offer a wide selection of popular brands including some premium products. While specialized pet retailers hold 27% of the value share in cat and dog food their edge comes from specializing in a wide variety of pet products, accessories and expert advice as you can see by balance shift illustrated in this chart. This edge will be an ace in the hole with the next generation of pet owners.
Slide 7 Pet ownership Pet humanisation Premiumisation Luxury pet Health and Pet Travel pampering wellness Source - Euromonitor
Slide 8 Estimated over 3000 pet speciality retail stores in Canada Estimated 850 pet speciality retail stores in Quebec
Slide 9 National Average ◦ 48.5% of homes have a pet. ◦ Average of $890 spent per pet annually Lets flip the discussion now and compare pet ownership and the amount spent on pets Based on information from the 2009 Statistics Canada Household Spending Report: 48.5 of Canadian households reported pet expenses averaging $890 per pet per year Keeping in mind this includes all type of pets not just cats and dogs. This amount spent is probably higher as the survey relies on the best guess of pet owners.
Slide 10 The average rate of growth for our industry in this country has been 4.5% overall up until 2009 where there was a slight decrease in spending according to Stats Can. Despite this blip, in July Euromonitor International shared their 2011 pet report with us which indicates that spending on pet food and products is continuing to increase by about 4%. They do not include pet services such as grooming and veterinary care in their data. After checking with the CVMA there was indeed a 13% dip in veterinary visits in 2009 which may help account for the slight decrease indicated by Stats Can. The 2009 Petlynx Responsible Dog Ownership study also supports this theory. Based on our numbers form our contacts at Statistics Canada and Euromonitor we estimate the value of our industry to be about 6 billion dollars although other sources put it upwards of 8 billion. Having hosted 54 trade shows we have been tracking the growth and diversity of the products available. The sophistication and quality of products has been increasing over the years and will need to continue to meet the expectations of the new generation of pet owners which now brings us to our next section.
Slide 11 Who are these up and coming pet owners? Looking forward. Through our own events, participation in international shows and regular correspondence with our colleagues abroad, one things has been consistent everywhere, Our industry has successfully enjoyed catering to one of the most affluent groups of pet owners in history, baby boomers. Generation X has closely followed suit and Generation Y pet owners, as they come into their career stability, will continue to spend to maintain the wellbeing of their companions. Some shifts to watch for are as boomers age they may become more likely to have lower maintenance pets or none at all with X and Y moving into their place. With the increased pace of life, what will be interesting to watch is whether generation Y will continue to select cats and dogs at the same level as their predecessors, or also switch to lower maintenance pets to accommodate their busy life styles. Let’s have a look at this newest generation of pet owners.
Slide 12 BOOMER: 1946-1964 GENERATION X: 1965-1976 GENERATION Y: 1977-1994 Just to clarify this chart will illustrate the different generation classifications.
Slide 13 What do they value? What do they want? How can they be marketed to? What do they value? What do they want? How can they be marketed to?
Slide 14 Enjoy the highest standard of living ever experienced Time-stretched bunch Keep up with things using technology on which they are completely dependant on Love of instant gratification Value social connections, doing things in groups and being able to share things with their social circle Understanding what their priorities, stresses, enjoyments and ways they communicate play an integral part to knowing how to make a connection with them. Generation Y enjoys the highest standard of living ever experienced They are a time stretched bunch and use technology to keep up their lives They are dependant on technology and love instant gratification which is why everywhere you find this generation you also find social media. I will not get into giving lessons on social media as I am continuing to learn about it myself, but what I do know is that in order to connect with and stay in the forefront of the minds of this generation you need to use it. Like it or not, it is here to stay. Another point is that they value social connections, doing things in groups and being able to share things with their social circle. They develop social connections around pets which is a perfect business opportunity to tap into. Communicate with them in a way that they will hear you. Successfully become part of their community and you can reap the rewards of word of mouth advertising. Some of the most valuable P.R. you can ever hope to obtain.
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