Pet-related investor dollars and consumer spending keep rising steadily. Why?
In November, Long Lake company Dog Threads, which makes matching shirts for canines and their owners, went on the popular ABC show Shark Tank and walked away with $250,000 in investor capital from angel investor Mark Cuban—the same man who, in 2015, famously said on the show that “kids and animals are the worst.”
Since he’s obviously unaffected by cuteness, the experienced lender and billionaire owner of the Dallas Mavericks must have seen something else compelling about a little-known Minnesota brand that makes button-up shirts for dogs.
He’s not the only one financing such ventures. In 2018, Kisaco Research, a UK-based company that hosts B2B conferences and exhibitions worldwide across various industries, launched an annual summit for the pet industry called Pets & Money. The exclusive one-day conference held in Austin, Texas, in December works to connect businesses in the pet industry with investors.
“From momentous transactions such as General Mills’ acquisition of Blue Buffalo and J.M. Smucker’s acquisition of Ainsworth Pet Nutrition, to a flurry of minority investments, it is clear that strategic buyers, venture capital, and private equity alike continue to have a strong and growing appetite for the pet industry,” Kisaco Research states on the summit website.
Increased spending on pets is driving investor interest. In 2006, Americans spent $38.5 billion on their pets. By 2018, they’d nearly doubled that number, to a whopping $72.6 billion. But what’s driving the increased spending and overall industry growth?
Growing trends in lifestyle and education, says Ali Jarvis, who has built a business on knowing what people want for their dogs. Following a career in accounting and business development at Target Corp. and MSP Communications, plus a stint as a Pilates instructor, Jarvis launched Sidewalk Dog Media in 2008. The company aims to “help people spend more time with their dogs … and help dogs spend more time with their people.” It keeps tabs on dog-friendly places, events, businesses, and activities, as well as other pup-related news in the Twin Cities and beyond.
The biggest cultural shift that points to the increase in dog spending: Millennials are waiting longer to have kids. According to the Centers for Disease Control and Prevention, the average age of first-time mothers in 1972 was 21; for fathers, it was 27. As of 2018, those ages rose to 26 and 31, respectively. In the interim, Jarvis says, many are getting dogs. The American Veterinary Medical Association found that these millennials are the primary pet-owning demographic in the United States—the “dog mom” and “dog dad” generation, if you will.
Jarvis says many of these millennials are “caring for their pets just like they were their own kiddos.” As a result, she says, they’re spending more money and going to greater lengths to take special care of their animals. By default, dogs are becoming their stand-in kids.
And just as people want the very best for their kids, these dog parents want the very best for their dogs. The result is an abundance of products and services for dogs that had been unheard of.
Pooch Products Aplenty
Dog hotels like Minneapolis-based City Paws Pet Club have opened for when humans need an overnight sitter, offering “luxury suites” for dogs, boasting “chandeliers in every room, an over-the-top comfortable bed with luxury bedding, and a flat screen with the DogTV channel (cable television made specifically for dogs) in each room.” Starting at $64 per night, it’s not even the priciest option in the Twin Cities metro.
Doggy day cares, which offer care for your pet while you’re at work and can cost several hundred dollars per week, are also increasingly common, with hundreds of options available in Minnesota alone.
Then there’s the apparel. Dog Threads co-founder Gina Davis was in search of quality clothing for her dog in 2014. “Everything we found was kind of cheap and tacky,” Davis says. “We wanted more human-like apparel.”
When she couldn’t find the quality clothing she felt that Thomas, her Pomeranian-poodle mix, deserved, she made it herself and found that other people wanted it too. “Every time our dog wore the clothing out in public, people would stop us and ask where they could get them,” Davis says. She and her husband decided to start it as a small side business, “and it’s just organically grown really quickly”—so much so they felt it was time to step up their game. Cue the brand’s appearance on Shark Tank.
Pet tech is likewise thriving, Sidewalk Dog’s Jarvis says. According to CB Insights, between 2012 and 2016, $486 million was invested globally in pet cameras, Fitbit-type monitors, and more. Burnsville-based PetChatz is on the cutting edge with its “full multi-sensory interaction” device, which enables treat dispensing, aromatherapy, motion and sound detection, games, DogTV, and more. Your dog can even initiate a video chat.
Read the full article from Twin Cities Business here.
