Growth industries are of constant interest to Australian entrepreneurs — there’s money to be made and those willing to take risks betting on new ideas are more likely to be rewarded.
When it comes to growth, few industries are more promising than Australia’s booming pet care and services market, which is enjoying a spectacular rise on the back of the much talked about fur baby phenomenon.
More than 60% of Australian households own pets, according to the Pet Industry Association, driving over $12 billion in annual spending on pet products and services in 2016.
That figure increased by 42% between 2013 and 2016, according to Animal Medicines Australia, and has continued to soar upwards since then.
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There are plenty of people already cashing in. Anneke Van den Broek is the founder of Rufus & Coco, a pet care brand which has grown into one of the biggest businesses in the market over the last 10 years.
“People are thinking of pets like children”
Van den Broek, who started her company during the global financial crisis, says she’s found the industry remarkably resilient to broader economic headwinds and is primed for growth.
After inking deals with Coles, Woolworths, IGA and stockists in nine other countries, Rufus & Coco now sells 2.5 products every minute.
“People are thinking of pets like children, they’re thinking of them being lonely or bored, so there’s services or products popping up all over the place for anything that keeps them entertained,” Van den Broek tells SmartCompany.
Rufus & Coco has recently launched its first standalone bricks-and-mortar venture called The Fur Salon, which is hoping to lean in on the $600 million Australian pet grooming market by offering a bespoke service for owners willing to pay for a premium experience.
“We humanise the way they think, so we certainly apply that to what they need,” Van den Broek says.
While Van den Broek was an early mover, there are plenty of emerging brands in the pet care and services space carving out their own niches.
E-commerce grabs the spotlight
Elyssia Nelson launched her pet accessory business Wolf & I Co. last year and hasn’t looked back, launching a steadily expanding selection of high-quality dog leashes and collars.
As Nelson explains, she saw the need for a different type of collar and leash offer after getting her own dog.
“We just fell into the industry,” she tells SmartCompany.
“We weren’t finding what we wanted in pet stores.”
The online pet food and pet supply industry is now valued at $196.5 million in Australia, having grown at an annualised 15.7% over the last five years, according to IBISWorld.
Market leader Pet Circle holds 44% of the online market after growing over 866% since 2013, IBISWorld reveals.
Growth is set to slow somewhat to an annualised 7.8% through to 2023, as the rush of new players establish themselves in the market, but there’s still plenty of opportunities to be had.
Nelson’s business is primarily online, but she has set up a few wholesale relationships and believes business is only going to get better as demand for high-quality pet accessories rises.
“People are willing to spend as much on pets as they would on themselves. They want them to be looking good and have the new treats,” Nelson says.
People are spending more on their pets
University of Tasmania retail expert Louise Grimmer agrees, saying the pet care and services industry is increasingly mirroring what’s already available for humans.
This includes everything from DOGTV to pet cremation services.
“There are more households with pets than there are with children,” Grimmer tells SmartCompany.
“The sky is the limit, but it’s really using technology and applying it to the pet supplies industry … just thinking about what we like as humans and applying it to our pets as well.”
Grimmer says businesses targeting a higher price point are also finding success as owners increasingly look for better quality accessories, food and services for their animals.
The trend towards higher-quality pet food has been particularly disruptive for the major supermarkets, who are facing challenger brands selling homemade and organic dog and cat food options.
From TV to funerals: Humanisation drives opportunity
When Tom Jorgensen founded South East Queensland-based Pet Angel Funerals, there weren’t many businesses in Australia trading in the pet funeral space.
But five years later, Jorgensen tells SmartCompany he has his mind on expansion amid a boom in business driven by changing consumer attitudes towards pets.
“There’s no sign of it slowing. We did our research, originally planning on grabbing a slice of the pie, but since we started the pie has probably tripled in size,” he says.
Jorgensen has been growing at an average of 5-6% each month since starting up in 2015 and has just secured the first-ever development approval in Brisbane for a pet crematorium.
“It comes down to that one word: the humanisation of pets,” he says.
As one of the first Australian businesses investing in purpose-built pet crematoriums, Jorgensen intends to build three or four more sites across the eastern seaboard by the end of next year.
He charges $199 for a funeral service on pets lighter than a kilo, moving up to $379 for larger animals. So far he says he’s helped owners of goats, alpacas and tortoises send off their loved ones.
“We also get a lot of guinea pigs,” he adds.