Vets get their claws into growth
Thursday, 10 July 2008
Last Updated: Thursday, 10 July 2008
By Robert Bryant
Australians love their pets and are prepared to spend up big to make sure they are healthy and happy.
Everyone knows a pampered pooch or a mollycoddled moggy, but you probably have no idea how this love of pets has created a multi-billion dollar industry.
According to a recent survey by Sensis, Australians spend an average of $1083 per year taking care of their pets, with half of pet owners spending more than $500 per year and 20% of them spending more than $1000 every year on their pets.
One of the biggest beneficiaries of this boom has been the veterinary industry, which IBISWorld estimates grew at an average annual rate of 8.3% over the five years to 2007-08.
This extremely strong growth rate was driven by a sharp increase in the volume of services rendered to companion animals (pets) and an increase in the average price per service.
While cat and dog ownership in Australia declined during this period, an increase in the ownership of other animals (such as birds) has had some offsetting effect.
There has also been an increase in demand for veterinary services by the horse racing industry due to an increase in the sale of yearlings by horse breeders, an increase in the range of services and products offered by equine veterinarians, and the outbreak of equine influenza in Australia (which boosted revenue in the 2007-08 year).
As in the medical sector, new technologies and pharmaceuticals are likely to increase the range of services that can be performed by veterinarians, which will help to increase demand for veterinary services. These developments will also make it easier to provide services, increasing throughput and, potentially, reducing costs per service in some cases.
Products and service segmentation
Major market segments
IBISWorld forecasts that this industry will grow at an average annual rate of 5.5% over the five years to 2012-13. During this period, the demand for veterinary services from farms is expected to be positively affected by a return to more normal seasonal conditions, which would promote growth in livestock numbers and farm production.
There may also be increased focus on the quality of breeding stock, due to demands for higher-quality products. Liberalisation of agricultural trade could potentially have a positive effect on the Australian livestock farming sector, by promoting higher prices and an increase in production volumes (and herd numbers); and this could promote demand for veterinary services.
Cat and dog ownership is predicted to decline over the outlook period. This may have a dampening effect on industry growth, as most of the industry’s revenue is derived from the care and treatment of companion animals.
Emerging opportunities for veterinarians to diversify or add to services provided to clients include acupuncture, chiropractics and canine dentistry.
Areas of growth in the small animal area include MRI scans, hip replacements, oncology, lens replacement for cataracts, and cardiovascular surgery.
IBISWorld supplies business information databases, including industry reports, company reports and business indicator reports. www.ibisworld.com.au
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