From expensive surgery to photo shoots and elaborate cremations, the multi-billion-dollar Australian pet industry is producing novel and profitable services.
From expensive surgery to photo shoots and elaborate cremations, the multi-billion-dollar Australian pet industry is producing novel and profitable services.
Pet-related businesses in Western Australia are reporting strong growth as owners increasingly invest in a wide range of services for their animals.
Australians have one of the highest rates of pet ownership in the world, according to a 2016 report by Animal Medicines Australia, with an estimated 24 million animals in households nationwide.
The report found clear trends towards a growing pet population, with dog numbers up by 600,000 from 2013 to 2016, a rise in the proportion of owners treating pets as family members, and increased spending on pets, up 42 per cent.
This increasing financial expenditure comes in many forms, with significant opportunities for growth in areas such as insurance.
According to research by Roy Morgan, about 600,000 Australians had pet insurance as of late 2018, which is just 6 per cent of total dog and cat owners.
Given that pet insurance only became widely available in the past decade, and was “virtually non-existent 15 years ago”, according to a vet spoken to by Business News, this figure is coming off a low base.
A Pet Insurance Australia 2015 report advised that, based on the claims data, pet owners face costs up to $8,000 for a single surgical procedure without insurance.
Given that the vet industry is not subsidised by government, a lack of regulation means prices can vary wildly.
For a small dog or cat, owners can pay a basic insurance premium of less than $35 a year, while comprehensive cover for a larger animal can sit above $110 annually.
However, many popular breeds have a genetic predisposition for certain health issues and degenerative conditions, including golden retrievers, Labradors, Staffordshire bull terriers, and pugs, as well as Persian and Maine coon cats.
This can add anywhere from $400 to more than $1,000 a year to premiums for such breeds.
As awareness and uptake of insurance grows, so too are the business opportunities for veterinarians.
A recent IBISWorld report found that, as vets continue to expand their services and buy new equipment, the price of visits has increased, and an increasing uptake of insurance is providing a financial benefit to the industry.
Vet fees can vary wildly between practices, making it difficult to establish an accurate pricing range, but it is notable that many Perth vets are now offering a membership plan for their services, in a similar style to most gyms.
According to the Australian Veterinary Association, the average dog owner will spend around 44 per cent, or $450, of their annual pet expenses bill on vet services, while a cat owner will spend 38 per cent.
AVA president Paula Parker told Business News vet businesses required an extensive capital investment, particularly with innovations in new equipment, and that cost was passed on to pet owners.
“One of the changes we’ve seen over the last five to 10 years is that we’re able to offer more and more in terms of advanced medical diagnostics and treatment, but how people pay for that hasn’t evolved to the extent that our offering has,” Dr Parker said.
She said the AVA suggested owners adopt wellness plans to prevent illness for their pets, which may include pet insurance, as well as a vet memberships.
Specialty growth
Not only are conventional pet businesses in WA reporting growth. Two local specialty businesses are also reaping the rewards of an animal-loving population.
One of these is former Business News Rising Stars winner Passing Paws Pet Cremations, which provides funeral, burial and memorial services.
Managing director Lee Cassell told Business News the business had experienced strong growth since its Rising Stars win in 2017, doubling in size, staff and revenue.
“From a vet practice point of view, we do now have contracts that allow us to service clinics directly,” Mr Cassell said.
“Since the Rising Stars, we’ve branched into the horse cremation industry, so we’ve diversified the business.”
He said explaining the nature of the business to the wider community remained a major challenge.
“It’s all about education,” Mr Cassell said.
“Previously people didn’t even know this existed, and how can they use a service they don’t know exists?
“It’s about educating customers, educating staff at vet clinics and making people realise, at the end of the day, that pets are family members.”
Alex Cearns says pet owners regularly share business recommendations wth each other.
Alex Cearns is another pet specialist who has watched the industry grow through the lens of her photography business, Houndstooth Studio.
“I started the business in 2009, in the GFC, so it was a slow build at first,” Ms Cearns told Business News.
“At the time, there were people portrait studios that sometimes did pets, but there wasn’t a dedicated studio pet photographer in Perth.
“In the first six months I had 20 or 30 photoshoots, the following year it doubled, and within 15 months it went crazy.”
She now completes up to 15 photoshoots each week, recently won an Order of Australia medal for her charity work, and also regularly completes commercial contracts with organisations including sleepwear brand Peter Alexander.
Ms Cearns said her client base had primarily expanded due to word-of-mouth referrals, with a close-knit community of pet owners who made direct recommendations to friends.
“People’s pets are their children, so they’re prepared to invest,” she said.
“All our clients now are linked to each other, so you can’t have a bad day because clients are your absolute gold.”
