Have you ever heard of a “fur baby?” Until recently, I hadn’t either. But apparently it’s a thing. Millennials are opting out of having babies. Instead, they’re buying dogs… or “fur babies,” as they like to call them.
But as ridiculous as the whole thing sounds, it’s opening up big business opportunities. Just like any normal parent only wants the best for their human baby, “fur mommies” only want the best for their canine companion. The generic, industrial chow you used to give to Fido won’t do no more. Oh no. Now it’s only premium, high-grade, organic grass-fed beef.
Business opportunities in the pet care space go much further than so-called premiumization of existing doggy products. Now, proud dog owners want to parade Poochy everywhere. Restaurants, holidays, day spas, you name it. If a human can do it, then you won’t have to look too far to find a fur mommy on Instagram gushing, “OMG! I sooo want to do this with my fur baby!”
Just how big is the doggy business?
According to YPulse data, over half of millennials own dogs. What’s more, of those who own a dog, 49% agree with the statement “Pampering my pet makes me happy.” Now, this is just a ballpark estimate, but 49% of ‘over half’ should roughly translate into something like ‘25% of millennials own a pet and enjoy pampering it.’
The best part about this dog business is that the rise in fur babies just so happens to coincide with millennial households now earning more money than any ‘young adult’ demographic in history. There’s also plenty of data suggesting that millennials spend more than any other generation.
So let’s put two and two together. There’s a generation spending more than any other, and at least a quarter of them like to spend at least some of their hard-earned income on pampering a dog. Sounds like a big opportunity to me.
Doggy startups hot on the scent of opportunity
A millennial boom wouldn’t be a millennial boom without an app, would it? After all, ask a millennial to put down their phone for more than five minutes and you’ll be met with violent aggression. Either that or they’ll just go into shock.
So what are startups doing about it? Well, at least one is building an app for fur mommies and daddies so they can find all the dog-friendly businesses in town. Appropriately named Doggies in Town, the app matches dog owners with everything in their local area that they can do with their dog. rom dog-friendly hotels, bars, and restaurants, right through to doggy tours, adventures, and day trips, you’re set to lap up the best your locale has to offer.
You know what else is cool these days? ETFs!
In the theme of matching cool with cool, another thing that’s fashionable these days is Exchange Traded Funds, or ETFs for short (and yes, in case you were wondering, there are apps for ETFs, too!). Yep, since the GFC of 2008, investors have been ditching their traditional managed funds, presumably preferring the higher liquidity and lower fees of ETFs.
Of course, your grandpa’s musty old index fund isn’t for everyone, so now you can find an ETF for just about any investment philosophy. The range of options might not be so extensive that ETFs compete with apps or rule 34, but there are, indeed, pet ETFs.
Take, for example, ProShares Pet Care ETF (BATS: PAWZ). Launched just two years ago, the fund has only continued to trend upwards, more than doubling early investors’ money. And if you weren’t already convinced of the opportunity that doggy investing presents, the fund’s fact sheet outlines plenty more compelling reasons.
Potential for growth in the doggy industry
Growth in the dog (and pet business in general) isn’t stopping anytime soon and is expected to reach close to $300 billion by 2025. And that’s just in pet care without counting all the other products and services now being offered to fur mommies and daddies.
Presumably, the upside potential is even greater than this, though. No doubt, new businesses will come onto the scene offering once unimaginable dog and pet services. Our collective pet obsession will deliver incremental growth to an already flourishing industry; an industry with a growing customer base that is seeking out increasingly sophisticated (high price + high margin) services for their pooch.
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