Friday, July 11, 2008

Beagles, boxers ... and big bucks

From groomers to dog parks and boutiques, the pet industry is booming

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Tom Fedor⁄The Gazette
A canine client greets visitors to Dogs In Paradise, a dog day care center in Frederick that’s cashing in on the nation’s booming, and increasingly diverse, pet industry. Last year, Americans spent $41.2 billion on pet products and services, more than the gross domestic products of 114 nations.
Barking, sniffing, tugging and a bit of roughhousing are considered socially appropriate behavior at one increasingly popular Frederick day care center.

That’s because its clients are not toddlers and preschoolers, but terriers and poodles.

Through a glass window in the lobby at Dogs In Paradise, visitors on a recent afternoon could see a cocker spaniel trotting between toys, a boxer stretched out near colorful play equipment and two large mixed-breeds tugging at a cloth bone.

Like most pet-related businesses in Maryland — from groomers to trainers — Dogs In Paradise has seen its business boom since it opened in the fall. Owner Terry Kehne believes Dogs In Paradise is part of a growing national trend.

‘‘We’re finding quite a lot of people need [day care for their dogs] for various reasons,” Kehne said. ‘‘Every month we get more business. Pets are like people’s kids — that’s the single [biggest] reason why the pet industry is growing.”

While the broader national economy has been slumping — from the stalled housing market to sagging automobile sales — the pet industry has thrived with an expanding array of merchandise and services.

U.S. consumers spent more than $41.2 billion on pet products and services in 2007 — more than the gross domestic product of Serbia, Bulgaria, Lithuania and 111 other countries. Spending last year was more than double the $17 billion shelled out in 1994, according to Dillon Media, a pet industry consulting firm in Berkeley, Calif.

‘‘The growth has been impressive, even through hard economic times,” said Michael Dillon. ‘‘Innovation is the key in this industry. It’s really driven by startups and entrepreneurs — thousands of mom-and-pop shops.”

From retractable leashes to global positioning system collars, pet products are becoming even more specialized, with much more room for growth, according to Dillon’s Pet Industry 2008 Strategic Outlook report. ‘‘New products are coming on the market at the rate of hundreds per year,” Dillon said.

After searching for months for a location that would tolerate the noise, Kehne opened Dogs In Paradise in a 7,150-square-foot space in an East Street plaza. The warehouse-size room has separate quarters for an office, overnight lodging area for pets, a training section and a second play area that will open as more pet owners sign on.

The client list has grown from one red beagle named Rudy to up to 18 dogs per day, including Labrador retrievers, terriers, golden retrievers and poodle mixes.

Kehne said that although the business is not breaking even yet, she is optimistic. The center, now with three full-time and two part-time employees plus three volunteers, can accommodate up to 60 dogs per day, at $35 per day for pet sitting and socializing.

Pet owners spent more than $2.9 billion on services such as boarding and grooming in 2007, with 7 percent growth expected this year, according to the American Pet Products Manufacturers Association.

Vicky Creamer, owner of Belquest Kennel and Cattery in Mount Airy, said her 20-acre enclosed roaming kennels are in demand and the Labrador and golden retriever puppies she breeds sell quickly. The facility also provides grooming, offers handling courses and provides day care for $15 per day.

‘‘I have to say, everything’s on the upswing,” Creamer said. ‘‘People have to take care of their animal. You have to feed them and get them looking good.”

Various businessesjumping on pet wagon

Pet food giants such as Iams, which owns an 8.9 percent interest in Veterinary Pet Insurance, are now competing with companies such as paper product giant Kimberly Clark, which has expanded into the supermarket pet aisle.

Acquisitions are increasingly common in the pet industry, according to Laura Bennett, who writes annual trend reports to the American Pet Products Manufacturers Association.

In recent months, PetWatch Animal Hospitals Inc. of Urbana acquired Greenbriar Veterinary Hospital near Urbana, Peachtree Veterinary Clinic in Darnestown, Fox Chapel in Germantown and, most recently, Metropolitan Emergency Animal Clinic, an after-hours clinic in Rockville.

‘‘With these practices situated throughout the I-270 corridor, we are now realizing our goal of providing an unparalleled level of service to area pet owners,” said L. Peter Smith, CEO of PetWatch, which targets companies with more than $1 million in revenues.

PetWatch scouts for companies with an established staff, like Greenbriar, a 7,000-square-foot facility on 30 acres. The facility includes an open play area called Doggie Day Camp — available at $20 per day — and a separate Kitty Playtime exercise area for non-aggressive feline boarders. Executives expect permits soon for a pet crematorium. Overnight boarding kennel and day care ranges from $30 per day for a standard package to $100 per day for the luxury spa version, complete with heated floors.

‘‘Even I’m amazed at what pet owners are willing to do for their pets,” said John Kumnick, PetWatch’s chief development officer.

Pet ‘parents’ prioritize

Owners of specialty pet shops around the state — from Posh Pooch in Bethesda to Paws Pet Boutique in Annapolis — are optimistic, despite the nation’s economic doldrums.

Leslie Rosenthal, owner of Posh Pooch in Bethesda and two Yorkshire terriers, sells luxury items such as pearl necklaces, bowties and a range of little hats — graduation mortar boards, FBI baseball caps, fedoras and sun bonnets, all in the $20 range. The shop also offers lines of tiny backpacks and frilly ‘‘party collars.” Doggie pajamas, in either pink or blue, sell for $34.

Michelle Kownacki opened her little white Paws Pet Boutique in 1999 on State Circle in Annapolis, selling natural dog treats, hand-painted bowls and cat toys. She said her all-natural frozen yogurt, served to both humans and canines, has been a hit this summer.

‘‘We sell a fair number of life preservers and different collars for the new season,” Kownacki said. ‘‘It’s been a challenging year for all businesses. We’re really fortunate to have the support from town.”

In Baltimore, Christopher Woodside and Tom Berger opened Pretentious Pooch on Cathedral Street in 2005, billing it as a ‘‘full-service doggie boutique.” They said they’ve seen interest in specialty items drop, but believe consumers are still budgeting big for their non-human companions. The men recently renewed their lease with the plan to hold a clearance sale on luxury items and include more food, sturdy collars and basic apparel for weather conditions, according to their Web site.

And in Frederick, Two Paws Up on South Carroll Street, which opened in 2004, recently opened a kiosk location at Greenbriar in Urbana and is revamping its Web site to target online sales, said owner Allison Levitt. Natural dog treats and all-natural dog beds are among the shop’s top sellers, which owners are ‘‘absolutely” buying.

‘‘People’s lifestyles are changing — their dogs are going to take that route,” Levitt said. ‘‘Pets are a member of their family.”

U.S. pet industry

Number of dogs and cats: 162 million

Households with a pet in 2007: 63 percent, or 71.1 million homes

Households with more than one pet: 45 percent

Dog owners who consider their pets members of the family: 85 percent; cat owners: 78 percent

Pet owners buying holiday or birthday gifts for their pet: 80 percent

Anticipated growth in pet industry in 2008:5.3 percent

Spending on pets in 1994: $17 billion

Spending on pets in 2007: $41.2 billion

Pet food: $16.2 billion

Veterinary care:$10.1 billion

Supplies and medicine: $9.8 billion

Services (grooming, boarding): $2.9 billion

Animal purchases:$2.1 billion

Sources: Dillon Media LLC, Department of Labor, American Pet Products Manufacturers Association

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