Americans’ deep love of pets has fueled a fast-growing U.S. industry that surpassed $220 billion of economic impact in 2015.

That’s great news for Maine, where the state’s largest publicly traded company and other smaller players benefit directly from the pet industry’s growth.

“The pet industry is a big and rapidly growing segment of the U.S. economy,” said Jonathan Ayers, president and CEO of animal health diagnostics provider Idexx Laboratories in Westbrook. “Maine is benefiting from that in a big way.”

The U.S. pet industry generated $221 billion in economic impact, paid out $60.5 billion in wages and benefits, and supported over 1.3 million jobs in 2015, according to a recent study by Virginia-based George Mason University.

Although the study does not give a state-by-state breakdown of the economic impact, pet industry leaders in Maine said it provides thousands of jobs to Mainers and generates billions of annual revenue dollars within the state.

Areas of the industry that have experienced growth in recent years include animal sales, pet food, veterinary services, animal pharmaceuticals, pet health insurance, grooming, boarding, pet-sitting and a variety of other products and services, according to the study.

“The pet industry is one of the nation’s fastest-growing industries as the nation has seen a dramatic upswing in the number of U.S. households that are pet owners,” the study concluded. “As the industry grows, spending by pet households generates a flow of economic activity that spreads across the nation and involves many sectors of the economy.”

GROWING FONDNESS FOR PETS

According to the American Pet Products Association, Americans spent $60.28 billion on pet products in 2015, an average of $484 per household, up from $58.04 billion, or $471 per household, in 2014. It estimates that spending in 2016 was $62.75 billion, or $499 per household.

About 65 percent of U.S. households include at least one pet, which equates to 79.7 million homes, according to the association. That fondness for companion animals underscores the growth of the businesses that serve them.

On Friday, Idexx reported 2016 revenue of $1.78 billion, an increase of nearly 11 percent from its 2015 revenue of $1.6 billion. The company’s net income was $222.1 million in 2016, up nearly 16 percent from $192.1 million in 2015. Idexx has nearly 2,500 employees in Maine and about 7,000 worldwide.

In January, Idexx was added to the Standard & Poor’s 500 Index, a stock index of 500 publicly traded companies that is considered a leading bellwether of the U.S. economy. No other Maine-based company is currently included in the index.

“We are by far the largest player in Maine in the pet care industry, by an order of magnitude or more,” Ayers said. “But we’re not the only player.”

Another Maine business that has benefited from the pet industry’s growth is Planet Dog, a maker of high-end dog toys and accessories, also based in Westbrook. The business sells its products to independent retailers, as well as to consumers online and at its company store on Marginal Way in Portland.

Founded with two people in 1997, Planet Dog now has a staff of 30 and is experiencing annual sales growth that outpaces even the fast-growing pet industry, company CEO Colleen McCracken said. The private company does not publicly disclose its revenue and net income figures, she said.

Another fast-growing participant in the pet industry is Portland-based Vets First Choice, which operates an online pharmacy for pet medications. Founded in 2010, the company has consistently made Inc. magazine’s Inc. 5000 list of the country’s fastest-growing private companies. It employs more than 150 people.

In 2016, Vets First Choice landed at No. 1,232 on the list, with 2015 revenue of $60.9 million and average annual revenue growth of 316 percent over the previous three years. Vets First Choice CEO Ben Shaw is the son of Idexx founder David Shaw.

Portland-based Putney Inc. is another Maine company that has experienced tremendous recent success in the pet industry. Putney, a maker of generic pet medicines with 2015 revenue of nearly $50 million, was acquired in March 2016 by Dechra Holdings, a subsidiary of United Kingdom-based Dechra Pharmaceuticals PLC. The purchase price was reported to be $200 million.

NEW GENERATION OF ANIMAL LOVERS

Demand for high-end pet food and health-related pet products in general has been skyrocketing, McCracken said, as more pet owners have come to regard their animals as valued members of their families.

“Within the state we are seeing a shift in pet parents wanting the absolute best for their dogs,” she said.

That includes better nutrition, McCracken said. Gone are the days when most pet owners were satisfied with purchasing the biggest brand-name food at the local Wal-Mart. They want to feel like they are providing their pets with the healthiest diet possible and are willing to pay a premium for it, she said.

“The biggest growth in the pet industry is coming from nutrition,” McCracken said. “Raw food is all the rage.”

The millennial generation is a big driver of the trend toward greater spending on pet health, Ayers said.

Idexx has conducted its own surveys of pet owners and found that 87 percent of millennials said they are willing to spend money to improve their pets’ health, he said. Fifty-seven percent of millennials said pets make them happier than anything else in their lives. In both cases, the positive response from millennials was higher than from other age groups such as baby boomers, Ayers said.

McCracken agreed that millennials are driving the industry’s growth and the shift toward higher spending on pets.

“I don’t think people understand what’s happening in the pet space,” she said. “Millennials are adopting pets as practice for being parents.”

J. Craig Anderson can be contacted at 791-6390 or at:

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