A recent report from one of the leading market research
firms today, Packaged Facts – which has been at the forefront of consumer
packaged goods, food and beverage, as well as demographic sector analysis now
for over five decades – clearly indicates the strength of the U.S. pet products
and services market, which did sales last year of around $73 billion. This is a
huge pie for any company to carve into and grab a slice. The report’s trend
lines show increased pet ownership rates, higher ecommerce spending on pets,
and a population of pets that are living longer, just like their owners. These
trends appear intact for the foreseeable future and it seems like everywhere
you go on this planet, people just love their pets.
While the pet industry is considered to be resistant to
recession, it is better to simply think of the industry today as being driven
by family-oriented household spending, and therefore core to spending habits.
Most pet owners consider their pets to be a regular member of the family and
will go well out of their way to care for a pet, spending a great deal of money
for the well-being, as well as overall happiness, of that family member.
Little wonder then that, even by the American Pet Products
Association’s (APPA) more conservative estimates, based on their own
compilation of various market research, the supplies segment of what they
tallied as a $58 billion market last year was around $13.75 billion. With 45
million U.S. households currently owning dogs and 30 million households owning
cats, any way one slices up the data, the numbers look good. The Packaged Facts
report was keen to emphasize a 38 percent jump last year in the number of pet
owners shopping online too, with heavy ecommerce hitters like Amazon.com
(NASDAQ: AMZN) making it easier than ever to streamline product flow to end
markets.
In an industry largely dominated on the services side by
players like big box retail outfit PetSmart (NASDAQ: PETM) – which provides
services like grooming and pet training, in addition to miles of aisles of pet
products – the pet supply market is saturated with cookie-cutter tropes. Only a
handful of companies are dedicated to creating defining brands and are capable
of successfully cultivating what is essential to connecting with consumers in
the pet products space: constant innovation and a tight feedback loop with the
end users. A strong brand in this game is essential for success, but a company
has to really make that connection with consumers through the products, winning
them over to the superior style, design, continuity, and affordability of the
brand.
One look at the latest product from rapidly developing
proprietary pet supply company, OurPet’s Co. (OTCQX: OPCO), and it is plain to
see that this operation really lives up to the vision of its founder, Dr. Steve
Tsengas. Intelligent applications to toy design and product engineering, driven
by deep insights into cat and dog biology, as well as psychology, have
continually defined OPCO as a rising star within the industry.
Launched in May this year, the company’s new Catty Whack®
electronic toy for cats was scientifically developed to stimulate the natural
hunting instincts of our feline friends, using an erratic feather wand that
darts in and out of six different holes and an enticing audio queue. Feeding
the animal’s instinctual desires, as well as providing therapeutic mental
diversion that is also good exercise, directly addresses the needs of the
animal to make them calmer and well-adjusted to domestic life. Only three
months after the product’s debut, the Catty Whack managed to take home the New
Product Showcase Award for best new cat product at the pet supply industry’s
major conference, SuperZoo 2015. The Catty Whack, featuring the company’s
electronic RealMouse® sound and erratic movement technology, was voted “Best
New Cat Product” in the New Product Showcase by pet industry retailers
themselves, illustrating how captivating the design, quality, and overall
execution truly is. The company wheeled out a bevy of new products at SuperZoo
2015 in Las Vegas this year, with toys and feeding solutions at the heart of
the OPCO booth.
The Catty Whack stole the show though, and this one product
is a perfect example of the wide array of trend-setting and highly unique ideas
available via OPCO’s OurPets® and Pet Zone® portfolios. This dual-brand
portfolio is respectively set up in order to provide a tailored experience for
the company’s pet specialty trade customers on the one hand, and those in the
mass-market, as well as food and drug channels on the other. The company
creates an entire range of products designed to promote the comfort and
enjoyment, as well as the health and safety of pets. From accessories and toys
to well-designed feeders and bowls, OPCO even makes a constantly evolving
selection of pet waste management solutions. Many of the company’s highly
unique products are one-of-a-kind market entrants and nearly every offering
from OPCO is protected by the company’s growing IP library of over 160 issued
and pending patents.
Record Q2 revenues reported by OPCO in early August were no
surprise to investors who have been following the company closely. And while
quarterly net revenues were up only four percent compared to last year, net
income shot through the roof, pulling in a 77 percent gain on strong
receptivity in pet specialty end markets, primarily due to the company’s
recently introduced bowl designs, as well as new cat toys and accessories.
The PetZone brand is also doing quite well in the mass
market, food and drug channels, and a significant uptick in overall profit
margins for the quarter was further enhanced by noticeably lower SG&A
expenses. These guys run a tight ship it seems and the company even touted an
upcoming rollout for a series of three new and proprietary feline waste management
products early in 2016, which shows just how aggressively the company is
delivering on consumer response to its brands of pet products.
Dr. Tsengas pointed out in the company‘s August 3 earnings
conference call that ecommerce was picking up incredible amounts of steam for
OPCO, and the segment currently represents about as much as 10 percent of the
company’s footprint, which spans direct-mail catalog and internet, as well as
leading pet specialty retailers and food, drug, and mass merchandisers. A strong
relationship with ecommerce juggernaut Amazon.com doesn’t hurt of course and
the company’s imminent expansion from Amazon Canada and Amazon US, with the
upcoming Amazon UK opening, will set OPCO up very nicely for maximum product
throughput capability. Already tapped for Amazon Japan and India, the sky is
the limit for the company’s international brands of pet products, and because
the language of design is universal, consumer resonance barriers to entry will
be at a minimum.
OurPet’s Co. has honed its design process down to creating
holistic products that unify the behavioral, lifestyle, and health needs of
both pets and their owners. The result is truly astounding, with products so
clever that consumers can’t say no. An example of this is the WonderBowl™
selective feeder, which uses a small infrared tag on the pet’s collar in
combination with a properly positioned and unit-based sensor to open the
transparent lid for feeding. This brilliant design helps keeps food fresh,
ensures that only the correct pet eats from the correct dish, and also keeps
anything from getting into the food. The product directly addresses an unmet
need that can often be a big problem in multi-pet households and demonstrates
how OPCO beautifully addresses that underserved demographic with an elegant
solution.
Whether it is coming up with new toys to help stimulate a
pet’s mind and therefore contribute to preventing unwanted behaviors, or
creating gorgeous designer dog bowls in durable stainless steel, OurPet’s
Company is constantly rifling great products out to a loyal user base. It is
this kind of forward thinking in product design that is capturing the most
sought after consumer dollar demographics in the pet supply space and OPCO is
proving itself to be quite the dynamo, churning out creative solutions to
underserved or unmet needs in the market.
For more information visit www.ourpets.com and
www.petzonebrand.com
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