Pet ownership among Americans increased drastically during COVID-19 which created an increase in product demand, but those leading the pack weren’t who you might expect.
Startups Rise to the Top
Pet humanization and wellness concerns have driven steady growth for pet businesses over the past decade. Services — particularly those providing boarding, daycare and walking — thrived pre-pandemic, but as shutdowns became a reality, outdated business models created hardships for these businesses. Consumers turned to innovation and convenience to replace some of the more traditional pet service providers.Driven by millennials, the largest pet-owning population in the United States1, product sales skyrocketed to over $100 billion2 in 2020 and the biggest benefactor of these rising sales were startups. Eager to pounce on this demand, these smaller, more agile companies are turning out modern pet care solutions to secure their place in the market.
“Changes to customer preferences and the way we do business caused by the pandemic are already evident,” said Vic Mason, president, World Pet Association. “With disruption often comes progress, and the increased focus on innovation in the pet community will guarantee continued market growth and success post-COVID-19.”
Tech Proves to be Best in Show
To the untrained, non-animal owner eye, pet products may seem fairly simple, but a fresh wave of gadgets and apps have propelled pet care into the digital age.
In the United States, one startup raised $30 million in Series B financing to create a smart dog collar that tracks when a furry friend has traveled outside an AI-determined geofenced area. Another group is following up the release of their successful automatic kitty litter box with the introduction of AI-powered, intelligent water fountains and feeders that will adjust based on the cat’s intake.
But the turn to tech isn’t limited to smart collars and self-cleaning litter boxes. Mobile apps connecting owners to service offerings – including pet food delivery, telemedicine and caretakers – are flocking to the forefront.
One developer secured $65 million in Series B to design a platform providing access to instant, affordable veterinary care. A U.K.-based group received over $26 million in funding to create nutritious, homemade dog food tailored to a dog’s specific needs.
Judging by the rise of private investors interested in the pet industry and the use of crowdfunding, the rate of growth can only be outpaced by the number of new ideas.
Finding the Perfect Fit
One of the biggest challenges the pet retail community has faced during the pandemic is the inability for many early-stage pet startups to connect with retailers and financial backers, an obstacle the World Pet Association hopes to overcome in 2021.“Unfortunately, the pandemic kept innovators, retailers and investors from coming together for meaningful face-to-face collaboration,” says Mason. “Connecting with the right people is always at the heart of a successful product launch. Retailers and investors benefit from a first glimpse at products that enable them to diversify their customer base, while entrepreneurs need visibility to stake their claim in a competitive ecosystem. We look forward to reconnecting the trade community in-person at SuperZoo this August to capitalize on new trends and advancements that benefit pets and their owners.”
1Data from the U.S. Chamber of Commerce
2Pet Trends, March 23, 2021. Small Business Labs. Emergent Research. https://www.smallbizlabs.com/pet-trends/