🍟 Thursday 3: The Covid Pet BOOM
🍟 Thursday 3: The Covid Pet BOOM
Plus: a pet franchise with 40% margins!
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Wolf Pack,
Good morning!
Today’s theme is the pet industry, as it’s been one of the few “winners” from the new world we’ve been living in since March of 2020. While the pet industry was already projecting lots of growth pre-covid, pandemic puppies and the like have supercharged this trend.
Today, 70% of households own one or more pets. And the bottom line is - at the current levels of supply and demand - there are too many pet owners and not enough services to cater to them. Vets, groomers, you name it, are typically on multi-week to multi-month wait times for customers.
This inefficiency can be your opportunity!
Let’s dive in to learn more, including a pet franchise that’s benefitting from these tailwinds 👇
One Chart:
Pet Industry Tailwinds from CB Insights
Interest in everything from pet insurance to pet food has risen dramatically since covid hit. Virtual veterinary care, premium/human grade pet food, and the bundling of pet care products of services are specific sectors that have taken off.
This movement has seen startups (and franchises) pop up across the board, as well as big players like Chewy and Walmart offer services from dog walking to telemedicine.
One Podcast:
Capturing the Pet Economy from Colossus
This was a fascinating conversation breaking down the business of Petco, which was founded in 1965 and started as a mail order business (had to Google what that actually means).
The conversation is led by the current CEO of a 5 location pet care provider Riverdog, and dives into how Petco evolved into its current big box model, and what impact e-commerce has had on this industry.
One Breakdown: Zoom Room
Fast Facts
Background
Founded in 2007, franchising since 2009
Based in California; 41 units open or in development 2021
An indoor facility for private dog training sessions, as well as socialization via indoor parks, birthday parties, and doggy disco parties for rescue organizations
Fees + Investment
Franchise Fee: $49,500
Royalty: 8%
Brand Fund: 1%
Initial Investment: $168,280 - $358,780
Financial Performance
The below information is based on 6 franchisees that were opened on or before January 1, 2020.
These locations include Austin, Texas; Trophy Club, Texas; Huntington Beach, California, Sherman Oaks, California; Seattle, Washington; and Virginia Beach, Virginia
The Wolf’s Take 🍟
40% profit margins is just unheard of in retail franchises, but somehow Zoom Room franchisees were able to pull it off during covid. That’s a testament to the tailwinds the pet industry has, but also the potential of this concept once a location is fully ramped up.
As discussed earlier, bundling services has become important for pet businesses as they attempt to create an ecosystem of offerings. I like that Zoom Room offers a practical service like dog training, but also has an indoor dog park that can be used for socialization events.
If dog birthday parties sound ridiculous…it should 🤣 🤣
BUT - more and more pet owners, led by millennials, are much more invested in the livelihood of their pets. So when you think of Scooter as a real member of the family, taking him/her to the dog park for a birthday celebration with your other dog owner friends isn’t as crazy as it first seems.
Resources
The Wolf Of Everything Else 🌎
Walmart invested in an indoor farming startup 🚜
UBS acquires Wealthfront for a whopping $1.4B 🤑
Amy Schneider’s legendary streak on Jeopardy has ended 📖
Oscar Meyer came out with a bologna beauty mask (why tho) 😑
Speaking of pet businesses, Chippin is doing its part with foods that are better for your dog AND better for our planet. Reduce the eco pawprint with Chippin’s whole, all-natural ingredients. Save 25% off Chippin today!*
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