The New York Times
November 16, 2005


By Jonathan D. Glater

How hot is the pet market these days? Think dog purses, cat strollers,
"Cab-bone-net" wine-flavored dog treats and sitters hired to watch
television with Fido, and some sense of the lunatic growth becomes

So far, the boom has created lucrative opportunities for small-
business owners, but as more big companies take note, the market could
become more difficult for the niche firms that are now flourishing.

Large companies that dominate other sectors of the consumer economy --
like Wal-Mart and Target -- are adding more pet products to their
shelves, and the two big players already in pet supplies, Petco and
Petsmart, are expanding at a breakneck pace.

"We're concerned," said Tom Measday, a co-founder of NJ Pets, which
has three stores in New Jersey. He said he expected Petsmart to open a
retail operation in East Hanover, N.J., near one of his stores. "What
we've seen from the big companies, let's say Petco and Petsmart, is
they tend to look for the most successful store and that's where they
put their store."

Mr. Measday had to contend with one of the two big pet-supply
retailers once before, he said, but it closed. This time, he thinks
that a new competitor will put up more of a fight.

With about 75 employees, Mr. Measday has a solid midsize business. But
for much smaller companies, the pet boom presents more opportunity
than threat.

Pet Dreams, a small Manhattan company selling "cratewear" --
accessories for dog training crates -- was founded by Annette A.
Grignard, one of many entrepreneurs who are making a living selling
solutions to a problem that customers did not know existed. The kits
she sells include a mattress for the animal to sleep on, bumpers to
protect the animal from injury against the crate's metal bars and a
cover to make the crate more attractive.

The first such kit "was just for my personal use," said Ms. Grignard,
who used to work for a pharmaceutical company in Manhattan. "People
were coming over to my apartment and saying, 'Omigod." " She started
her business in 1999 and later received a loan from the Small Business
Administration for $250,000. Today she has manufacturers in China and
uses a warehouse in New Jersey to distribute the kits, which cost $30
to $70. Business has grown rapidly, and she is shipping thousands of
kits every month to a range of retailers -- including big stores like

Pet supplies now fuel a $37 billion industry. Retail sales of pet
supplies, not including food and services, amounted to $8.5 billion in
the United States in 2004, more than the $6.2 billion spent on baby-
care supplies, according to Packaged Facts, a division of And pet supply sales are growing at 7 percent
annually, as sales of baby supplies are decreasing.

Many of the companies in the business are small, said Bob Vetere,
chief operating officer of the American Pet Products Manufacturers
Association, a trade group in Greenwich, Conn. Over the last three
years the number of members in his organization has jumped to nearly
900 from just over 500.

"Maybe 60 to 70 percent of them are new or start-up companies," Mr.
Vetere added. "These numbers continue to grow."

Everyone has a theory about why so many people are spending more and
more money on their pets -- primarily cats and dogs, by the way; Mr.
Vetere said that in the 69 million households with a pet, there are 90
million cats and 77 million dogs. All the theories are difficult to

People who are single or whose children have moved away may become
more attached to their pets, treating them as members of the family
rather than as, well, pets. In a world that feels more uncertain, the
benefit of coming home to an enthusiastic welcome every day may be
deserving of a bigger reward.

"As a human, to just buy him a dirty old tennis ball is just not
enough, even though he doesn't care," Mr. Vetere said, referring to
his dog, Dakota. "I feel better because I've given him something more
than just a tennis ball."

He added: "Does it absolutely make sense? No."

But the feeling is clear. Many people refused to leave New Orleans
without their pets during Hurricane Katrina, and in light of that
devotion, several members of Congress have proposed legislation
requiring consideration of pets in future evacuation plans.

One sign of stronger human-animal attachments may be the increase in
the number of social activities that people engage in with their pets,
like dog runs where animals can run freely as their owners mingle.

That is new, Mr. Measday said. When he grew up, most people didn't
even walk their dogs, said Mr. Measday, who is 59. Instead, he said,
they let pets out of the house and trusted that the animals would find
their way home. Now, he said, "Dogs and cats really are an integral
part of the family."

But the main force pushing people to spend more on their pets may be
mundane: marketing. Several business owners cited Paris Hilton and her
famous Chihuahua as making the world safe for tiny dogs, clad in
fashionable sweater sets, carried in matching purses.

"Three years ago, we didn't sell the purses," Mr. Measday said. Now
his stores sell, besides purses, strollers for very small pets.

Businesses have tapped into a potent marketing tool by inciting a pet
owner's sense of loyalty, said David Lummis, a pet market analyst for
Packaged Facts. "This human-animal bond is just being fully exploited
by marketers," said Mr. Lummis, who owns two dogs and four cats, all
of which he took safely from his home in New Orleans.

There is excess in the pet market, though, Mr. Lummis said. "A lot of
it is trading people up to more expensive products, basically, and
making people feel like, 'Hey, it's O.K. for me to spend $20 on a bag
of dog treats instead of $2.99," " he said. "These dog treats are
going to be really good for my dog, and he's going to love them."

But describing some of the pet snacks and services available does not
begin to capture the range of goodies that are out there.

At Fideaux, a pet supply boutique in Healdsburg, Calif., just a few of
the offerings include leather collars imported from Switzerland for
$60 to $100 each; "Cab-bone-net" and "Char-dog-nay" wine-flavored
treats for $9.95 a bag; and brightly striped beds for summertime, and
red and green beds for the holidays that cost $60 to $150.

"It's done very seasonally," said Erin E. Morris, a co-owner of
Fideaux. Business at the store's two locations is booming, she said,
mostly because tourists visiting the wine country nearby miss their
pets and buy things to take back to them.

One of Fideaux's suppliers is Up Country Inc., a Rumford, R.I.,
company that makes collars, toys, beds and other products. Alice M.
Nichols started the business in 1984 to have more flexible hours and
to be able to spend more time with her children. She had been a

"When I researched different industries, the pet industry was the most
interesting, because it was growing very fast" and was considered
recession-proof, Ms. Nichols said. "It wasn't that I really had an
idea about the dog collars," she added, but she quickly focused on
collars as a product with great demand, because every dog needs one.

She started by designing the collars and then delivering raw materials
and the designs to a belt maker in Marblehead, Mass., not too far from
her home. Now she has 22 "stitchers" who make collars. Last year the
company sold more than 500,000 collars and leashes through retailers

But the market may be growing most quickly in services. Reba Jackson
of Austin, Tex., a part-time entrepreneur and an independent
contractor to cellular telephone companies, opened up a business with
her husband, Nelson, last year, offering to pet-sit while owners are
on vacation.

"Business picked up pretty quickly right after we opened," Ms. Jackson
said. Now their two-person company, Ruff Around the Edges, has
contracts with several apartment buildings, so that if tenants need
pet care, the building managers call her.

"We check their food and water, but basically it's just some playtime
with them," Ms. Jackson said. "We're the most reasonable in the area
and we charge $15 a visit."

Pet-sitting costs more, about $35 a night. Over all, in a slow month,
Ms. Jackson said, she and her husband take in about $3,000, and during
the holidays she thinks that amount will double as more people go
away. Her husband quit his job as an insurance claims adjuster to
cater to pet clients full time.

Then there are the special services, like watching television with a
client's dog. Usually, Ms. Jackson said, it's a dog-friendly movie
like "All Dogs Go to Heaven."

Asked whether she had expected such demand for pet services, Ms.
Jackson paused, then said, "It is crazy."

She researched the business carefully beforehand, spending almost a
year reading about dog massages and other services and the people who
pay for them. "People will do crazy things for their pets," she said.
"We do, my husband and I, so why not think that there are lots of
other people like us?"

The number of pet owners with similar attitudes, along with the
near-100 percent markups on many types of pet supplies other than
food, have led to steadily increasing sales at the industry's two
giants, Petco and Petsmart. Both chains are opening stores around the
country at a rapid pace and are expanding their service offerings,

Petco, for example, which has about 765 stores and 17,000 employees,
will have opened 90 new stores by the end of the year, said Kevin
Wayland, a company spokesman. Petsmart, the larger company in terms of
sales, has more than 750 stores and is opening more at the rate of
nearly 20 each quarter.

Wal-Mart is also paying more attention to pets, said Karen Burk, a
company spokeswoman. "You may have noticed a few more offerings of
some items as we become more in tune with what our customers are
looking for with their pet needs," she wrote in an e-mail message. "We
understand that pets are members of the families and people want to
pamper them and have fun with them. It could be a fun new pet bowl, a
stylish jeweled collar or even a costume for this past Halloween."

While statements like that are worrisome to midlevel retailers like
Mr. Measday, he expects that the big stores will have a hard time
matching his staff's expertise and familiarity with customers and
their pets.

His stores also offer more specialized equipment -- high-end purses,
sophisticated saltwater fish tanks or expensive bird cages, for
example -- than larger competitors. He also said that his employees
spend more time making sure that items are properly fitted or set up.

"We have greater variety," in prices and range of items, Mr. Measday
said. "That's why when you see the Petcos and Petsmarts coming, you
still see the small stores."

Years ago, after all, pet supplies were sold in big variety stores
like Woolworths, and that business plan fell apart, as increased
specialization led to smaller stores and the more focused chains of
today. It is unlikely, he said, that the world will revert to an all-
in-one store.

"When we started, it was the time in the States that people were going
to specialty stores," Mr. Measday said. By opening a specialty pet
store, he said, "We guessed right."

And whatever its size, not every pet industry business is destined to
succeed, many of the store owners said. Ms. Nichols of Up Country
recalled attending a trade show for pet suppliers and talking to a
fellow would-be entrepreneur who had a bold vision.