The ‘Entre-pet-neurs’: The pet-care industry is valued at nearly $73 billion and growing rapidly, thanks to millennials who regard pets as family

Biggie the dog’s first trip to the veterinarian became an “aha” moment for his owner, Ben Seidman and, especially, for Biggie himself.

“He really didn’t like it,” said Seidman, recalling the lab-pit bull-boxer’s animated response and apparent displeasure at having his temperature taken.

“Me and my wife said ‘hey, there’s got to be a better way for millions and tens of millions of dogs that are going to vets every single year.’”

It was the kind of experience that inspires innovation and growth in the nearly $73 billion-and-growing U.S. pet care products industry according to the American Pet Products Association.

Seidman, who lives in Chicago, and business partner, Yale Zhang, who lives in New York City, are two of many who would like to grab a slice of that pie.

They co-founded a company called Mella Pet Products in part to develop a reliable alternative to the ubiquitous thermometric goosing that has long stoked fear among the Biggies of the world.

Mella was one of 10 companies, out of more than 100 that applied, to be invited to the inaugural Pet Innovation Challenge in Bethlehem Oct. 2-3.

That two-day event allowed so-called “entre-pet-neurs” to not only showcase and pitch their products, but to meet investors and collaborate with other businesses and industry experts in hopes of learning how to fuel their emerging pet brands.

The event was sponsored by Boulder, Colo.-based New Hope Network, a company best known perhaps as the force behind the Natural Products Expos West and East in Anaheim and Baltimore respectively each year. They are the Super Bowl and World Series of the natural products industry.

It was held at Factory LLC, a defunct steel mill-turned business innovation center on Columbia Street near Lehigh University, SteelStacks and Northampton Community College’s Fowler Family Southside Center in South Bethlehem.

Factory LLC founder Rich Thompson said innovators forge on even when others say it can’t be done.

“When something is new and different you just can’t buy it off the shelf and
you just can’t bring in 20 people who have done it before and say here’s how you do it,” he told the participants. “So, you have to stay on the innovation side of things.”

Each of the 10 companies invited to the Pet Innovation Challenge were built on the idea of improving pets’ lives in an environmentally friendly, humane and sustainable way, and each was proposing a unique solution.

Seidman hopes Mella will become the, “Apple of health care for pets.”

“Finding an alternative to rectal thermometry is just on one of our goals,” he said. “We believe that many of the techniques and practices currently used in the veterinary space are archaic, and new methods combined with new technology can reduce the stress and anxiety both pet owners and their pets feel about veterinary visits.”

Chicago-based Shameless Pets was there too. It hopes to turn millions of pounds of wasted food each year in America into pet food.

Berkeley, California-based Jiminy’s, and Takoma, Md.-based Chippin, aim to create nutritious, protein-rich foods and snacks from crickets and other insects that can be raised and harvested with minimal disruption to the environment.

Still another company, Hachi Tama based in Japan, came to promote its high-tech, smart cat litter box that can help detect chronic kidney disease and more effectively control odors.
Growing Industry

The modern pet care product industry is seemingly recession-proof, fueled by health and nutrition-conscious millennials who regard pets as family, who care about how those pets feel and care what they eat. They also crave environmentally friendly, sustainable, healthy, humane and clean products.

“Even in 2008 when the economy was sucking, the pet industry was continuing to grow,” said Dr. Katy Nelson, an Alexandria, Va.-based veterinarian who hosts and produces “the Pet Show with Dr. Katy,” which airs on television in in the DC area.

Nelson, who spoke to Challenge participants Oct. 3, said the relationship between humans and pets has changed over the ages.

“For centuries we trained them for protection and herding and hunting. Now they’ve gone from skulking around the campfire to literally sleeping in beds with us,” she said. “So, obviously that changes how we view these animals.

“A lot of millennials are putting off having children and their pets are taking the place of having children, so they are ready to spend,” Nelson said. “They want to feel good about it. It’s as much about feeling as it is about the product itself. And after next year we think we’re going to hit $96 billion that people spend on pets just here in the USA. That’s just absolutely incredible.”

Problems and solutions
Jiminy’s, a Berkeley, California-based company attending the challenge, is trying to answer the call for sustainable, healthy pet food.

Founder and CEO Anne Carlson said dogs consume more than 32 billion pounds of protein annually. “It’s just not sustainable with traditional protein sources,” she said.

Crickets, on the other hand, are sustainable, easy to raise, highly digestible forms of protein, said Carlson.

Barn-raised crickets use 67% less land than chicken, and 93% less land than beef. One five-ounce bag of cricket treats saves 220 gallons of water over what it would take to create an equal-sized bag of treats made from traditional protein sources.

Hardly any greenhouse gases are produced by crickets, Carlson said.

And harvesting crickets is a less disturbing affair, too, he said. The insects are cooled down and enter a kind of hibernation before being harvested.

In January, Jiminy’s will roll out two new products: Cricket Crave and Good Grub, a product made from grubs. “We’re really excited about it,” Carlson said, “and so far the dog reaction has been amazing.”

About half of all dogs and cats will develop digestive problems, according to Holly Ganz and Carlton Osborne. They started a San Francisco-based company called Animal Biome that designed a test that can unravel the undiagnosed digestive mysteries that plague some animals and often lead to their early demise.

All you have to do is send them your pet’s poop.

“Your pet’s waste is the best indicator as to how they’re feeling,” the company states on its website. “A healthy gut creates good poop, and good poop prompts a thumbs up,” it continues.

Valuable feedback

One investor, who asked to remain anonymous, came to the event “looking for young, hungry entrepreneurs,” and added that the pet products industry is full of them.

Pet products are one of the biggest categories in any supermarket,” said Thompson who not only hosted the event but was a potential investor.

Thompson knows a thing or two about pet products. He was the CEO of New Jersey-based Freshpet for nearly six years until his retirement in 2016, and was the CEO of The Meow Mix Company from 2001 to 2006.

Now in his role as CEO of Factory LLC, he and his team have $250 million of investable
capital to acquire meaningful equity stakes in high-potential food, beverage and pet health companies.

The Pet Innovation Challenge showed, if nothing else, that the industry is thriving with innovation and potential, according to Thompson.

“It’s the humanization of pets,” he said. “Pets used to live in the backyard, but now they live in your house.”

Thompson would like to see the next big pet product company end up in Bethlehem and that Factory LLC could help stoke the flames of success.

While the 10 companies hoped to woo investors, they were also eager to get important feedback from them about blind spots in their evolving business plans, and possible solutions.

“We’re an early stage startup entering our critical growth phase and we’re looking for industry partners as well as funding, and so this kind of exposure to potential identify partners and investors is why we’re here,” said Animal Biome’s Osborne.

Attending the challenge “allowed us to get insights from people with amazing backgrounds in the industry,” said Ganz, also of Animal Biome.

Animal Biome wasn’t looking for scientific feedback. “We had that,” Ganz said. “We needed the business advisory board and this is really helping us to fill this big gap.”

Carlson agreed. “I love it when somebody from the outside takes a look at what we’re doing because everyone comes at things with different levels of expertise.”

And then there was Mella, whose unofficial motto, Zhang said, is “measuring your dog’s temperature does not have to be a pain in the butt.”

“No one’s happy,” Seidman told the event crowd. “Vet technicians have scratches all
over their arms, parents are upset in waiting rooms, and most of all the pets are not fear free.”

The feedback from other businesses and pet experts was crucial, Seidman said.

“We examined how to best educate pet parents as to why a Mella Thermometer will be beneficial to them. We had excellent input from multiple participants. We walked away with dozens of potential blind spots to consider as well as many solutions we had not thought of before.

For example, one of our team members suggested we target specific communities such as “pet moms,” high-needs dogs/cats, and even social media influencers in order to narrow our base and grow,” Seidman said.

“We can’t wait to take to the drawing board.”