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NONFOODS: Pet Care: Furry forecast

Every year the American Pet Products Manufacturers Association (APPMA), a not-for-profit trade association made up of nearly 850 pet product manufacturers and their representatives, importers, and livestock suppliers, develops a trends report based on its industry research.

Called APPMA's Top 6 for '06, the report this year lays out the following six trends pet category buyers and merchandisers will find useful in planning their merchandising for the year:

1. New pet services: Pet owners are willing to provide their pets with top-notch treatments for health care and even beauty. Increasingly willing to treat their pet as an important part of the family, many pet lovers are considering the mental, physical, and behavioral issues facing their companions.

2. Medical advancements in pet care: Nutritional supplements and medications for pets are also becoming more widely purchased by consumers. APPMA's 2005-2006 National Pet Owners Survey notes that 52 percent of dogs, 24 percent of cats, 36 percent of saltwater fish, 15 percent of freshwater fish, 5 percent of birds, 11 percent of small animals, and 8 percent of reptiles are given medications and/or drugs.

According to the survey, pet insurance is also gaining in popularity, with 3 percent of dogs and 1 percent of cats having pet insurance (up from 2002, when 2 percent of dogs and less than 1 percent of cats were insured). As a side note, Sainsbury's Bank, a subsidiary of the United Kingdom-based Sainsbury's supermarket chain and the Halifax Bank of Scotland, lists pet insurance as one of its most popular online products.

Thus, grocers offering banking services may do well to consider adding this service to their product mixes here.

3. Animal-assisted therapy: While most pet owners are well aware that pets make them feel better, the scientific community is taking note as well, with dozens of studies showing pets can help with learning and education, reducing stress, lowering blood pressure, and reducing the risk of heart attacks. This has spurred increases in the use of companion animals to assist with everything from detecting cancer in humans to comforting those suffering from Alzheimer's disease.

4. Licensed pet products: The licensing of popular American icons has crossed over into the world of pets. Popular characters on pet products include SpongeBob SquarePants aquariums and accessories, Blue's Clues Puppy Teethers, Clifford The Big Red Dog Tummy Teasers, Peanuts costumes and goggles for dogs, Dr. Seuss toys, and Jeep, Coleman, American Kennel Club, and Barbie pet clothing and products.

5. Private label: Retailers are finding innovative ways to introduce their own brands within the pet care and product space. Store brands now account for 11 percent of cat food, 12 percent of dog food, 13 percent of pet supplies, and 21 percent of cat litter, according to the Private Label Manufacturers Association. In an example of smaller store brands, Planet Dog offers custom Orbee-Tuff balls that stores can customize with their own company colors, names, logos, and artwork.

6. Mergers and acquisitions: Growth and innovation in the industry are driving an increase in merger and acquisition activity, a sign that business is booming.

"We anticipate there will be significant growth in these types of acquisitions over the next year," says APPMA managing director and c.o.o. Bob Vetere. "This trend demonstrates the industry is maturing, while an influx of smaller startup companies also indicates healthy growth."
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