Building on Success
Bob Vetere, president and CEO of the American Pet Products Association, shares his perspective on the key issues facing the pet industry and what is necessary to continue its growth.
From your perspective, what is the state of the pet industry? What is your outlook for the short- and long-term future of the industry?
Bob Vetere: The overall state of the industry continues to be solid. The newest edition of the APPA National Pet Owners Survey, which is coming out here at Global Pet Expo, shows that pet ownership is still strong. Almost two thirds of U.S. households have at least one pet, and it looks like the number of pets per household is even going up a little bit.
I think we will continue to see overall growth as the Human Animal Bond Research Institute (HABRI) continues to uncover and promote the human health benefits associated with pet ownership and medical professionals continue to acknowledge the positive role that pets can play in keeping people healthy.
I think all of that is going to continue to be a positive force going forward. Over the long term, I don’t see any big roadblocks or drop-offs coming up. I do have some concerns about the supply of animals, which we’ll get into a little later, but I think everything else is so strong and getting stronger. As long as the supply of live animals continues, we should have a lot to be optimistic about.
Over the past year, the industry has seen some key mergers and acquisitions at the retail level. Has this consolidation been a positive or negative trend for the industry overall? Do you believe that this type of activity will continue to play an important role in reshaping the retail landscape moving forward?
Vetere: Whether this consolidation has been a positive or a negative trend in the industry really depends on who you are. For those retailers that are growing through acquisitions or being acquired, it’s obviously been a very positive trend. On the other hand, it could be a negative trend for some of the smaller retailers that are seeing their businesses threatened by the fact that, all of a sudden, there are two powerful competitors on either side of them and nobody’s noticing that they’re sitting in the middle.
It’s reaching a very interesting point right now. I know there are some chains that are reaching 50, 60, 70, 80 stores or more. For better or worse, this type of activity will continue to play an important role. It’s just the nature of business. It’s different than manufacturers and distributors merging. This one involves people and the public and it’s going to be interesting to see how it continues to play out.
How do you expect the dynamics between online and brick-and-mortar stores to play out over the next few years? Is there anything traditional retailers could be doing to compete more effectively with online competition?
Vetere: The brick-and-mortar stores with pets still have an advantage that a lot of other segments of the retail industry don’t have in competing with online outlets. Shoppers don’t necessarily walk into a clothing store to ask the people working there, “Do I look good in this?” But with the pets, customers do want to be able to talk to somebody knowledgeable. They want to be able to ask, “Is this going to be good for my pet?”
The ability to answer questions like this is the advantage that small pet shops also have over Walmart and Target, where the people working in the pet aisle could just as easily be doing the gardening section and have no idea how to answer pet owners’ questions.
With that said, I think the smart brick-and-mortar retailers are positioning themselves as more than just an outlet for pet products, and that’s what is going to distinguish the businesses that are going to make it from the business that aren’t going to make it.
Sure, customers can still go back and ultimately make the purchase online, but if they are going to journey all the way over to the store to ask a question, more often than not they’re going to make the purchase on site, even if they could save 50 cents online.
In addition to serving as the president and CEO of the American Pet Products Association, you are also the chairman of the Pet Leadership Council (PLC), an organization made up of pet industry leaders, animal welfare advocates, veterinarians and academics. What are some of the initiatives that PLC has been working on over the past year? Are you happy with the progress that the organization has made?
Vetere: I’m finally happy with the progress we’ve made with the Pet Leadership Council. It’s just been such a struggle because when things are going great, it can be tough to convince people that you really have to start anticipating future challenges and put things in place now that will help address those challenges.
However, we’ve finally done some meaningful things in the last several meetings we’ve had, and I think others around the industry are recognizing that this is actually the right way to make sure that the industry continues to be successful.
A couple of issues have been particularly challenging for us as an industry—breeder standards and the pet sale bans that have been popping up all over the place. For too long, we didn’t do much more than stand around watching as activist groups dictated the conversation about these issues—oftentimes using unreliable data. For example, there are activist groups coming up with numbers relating to how many dogs are euthanized and how many dogs are in shelters and using that to drive legislative and regulatory decisions in government. Unfortunately, the government officials have no idea if the numbers are correct; they just believe these activist groups because they seem like they must know what they are talking about.
The PLC finally decided to go out and find a reputable, objective organization to take a look at the real numbers. We went to Mississippi State University’s veterinary school and economic school, which put together a very detailed evaluation of shelters, including the number of dogs they take in, the numbers of dogs they adopt out, the number of dogs euthanized and so on.
It turns out that last year almost 800,000 dogs were euthanized. Of course, that is a heartbreaking number. Still, it is much better than what was going on in the 1970s, when up to 20 million dogs were being euthanized. So kudos to ASPCA and all the other groups that have promoted spay and neuter programs and implemented programs to facilitate pet adoptions.
Thankfully, the numbers uncovered by Mississippi State are starting to get some traction. So far nobody has questioned the science behind it or the integrity of the Mississippi State researchers who conducted it.
That brings us to another issue the pet industry is facing—the looming shortage of pet dogs. The demand for dogs is so high that when you count all of the dogs available through shelters, rescue groups, hobby breeders and even neighbors and friends who accidentally found themselves with a litter of puppies, the U.S. will still be left with a shortfall of about 2.3 million dogs. Those pets are going to have to come from quality commercial breeders, or else they’re going to come from very disreputable sources, such as puppy mills or overseas suppliers.
Clearly we do need quality breeders out there, and that’s where the Purdue University’s Center for Animal Welfare Science and its Canine Care Certified program come into play. They are perfectly positioned to ensure that people have access to healthy, well-bred puppies by educating breeders, retailers and consumers on what it means to be a good breeder and identifying those breeders that meet high-quality standards.
In my opinion, that is going to be the best way to ensure that the supply of quality, healthy dogs continues to rise to meet the increasing demand. So PLC is really embracing that, and we’re putting together a whole strategic plan around the program.
This is just one of the really meaty issues that PLC is finally dealing with. We’ve also dealt with concerns related to invasive species of fish and things like that, and we’ve gotten some accolades for those efforts. I think we’re finally starting to be recognized as a speaking voice for the industry. We’re proactively putting out correct information and positioning ourselves as an industry that cares about animals and is not just in it for the money.
How is the health of the American Pet Products Association? How is the organization improving the value that it provides to its membership?
Vetere: It amazes me the way our association continues to grow. We surpassed last year’s membership figures weeks ago, and we’re quite a bit ahead of our all-time high membership numbers. Global Pet Expo has exceeded last year’s all-time highs in both number of exhibitors and number of booths, and we still had people beating down the door to exhibit at the show after we sold out all of the booth space.
Both the organization and the show have just been incredibly successful. I’ve got a tremendous staff, led by Andy Darmohraj, and they are the reason we continue to thrive and grow.
A key element to our growth is that we never get complacent. For example, we’ve just hired a third party to look at all of our member benefit programs beyond Global Pet Expo. What reasons are we giving people to be members of APPA? This outside contractor is going to give us an objective view of what we offer currently, what we should be offering, what makes no sense and what makes more sense. Ultimately, the goal is to provide more value to our membership.
We are committed to continuing to invest even more money into not only member benefits but also programs like HABRI, the Pets Add Life campaign, the Pet Leadership Council, the Pet Care Trust and Pets in the Classroom. We’ve put over $2.5 million dollars back into the industry this year alone, so we feel like we’re fair and a plus to the industry.
How is the work of the Human-Animal Bond Research Institute (HABRI) going? Are there any new developments from HABRI to report? What are your expectations for the initiative over the short and long term?
Vetere: The biggest pride that I’ll take with me when I finally leave here is HABRI and the fact that I was a part of getting this program together, because it is everything good about the industry, about pets and about helping people recognize just what pets really mean to everybody.
The fact that we’re getting so much more recognition now from the human health industry and from the government makes me smile. Steve Feldman is doing a great job with this kind of outreach. We’re on the Centers for Disease Control and Prevention website and the National Institutes of Health website as expert resources, including the surveys we’re doing with physicians and the American Medical Association.
We’re getting more involved now with service dogs and with veterans who aren’t allowed to bring their service dogs home with them. We’re working a whole big effort on that. We’re working on an effort to have low-cost housing be more pet friendly instead of discouraging people from having pets there.
HABRI is really a tool that the Pet Leadership Council is going to start taking more and more advantage of and that the industry itself should be proud of. We’ve really done something that’s meaningful, that’s good, that’s positive, that’s thriving.