- The pet-care industry is exploding, with North American sales expected to hit $281 billion by 2023, according to market-research firm Edge by Ascential.
- Mars CEO Grant Reid told Business Insider that the tendency for millennials to see pets as children is helpful to his $35 billion company, a large part of which is concerned with pet care.
- Mars Petcare is the world's largest veterinary health provider and has a network of over 2,000 pet hospitals including Banfield, Blue Pearl, Pet Partners, and VCA.
- Watch the full interview with Mars' CEO here.
- Visit Business Insider's homepage for more stories.
The pet-care industry is booming, especially among Gen Z and millennials who increasingly see their pets as more than just animals.
In 2018, pet care was a $225 billion business in North America, according to data from market-research firm Edge by Ascential. The firm expects that figure to rise to $281 billion by 2023.
Mars CEO Grant Reid told Business Insider that the tendency for millennials to see pets as children is helpful to his $35 billion company, a large part of which is concerned with pet care.
"They're using their funds to, you know, take care of pets and are prepared to invest in them, whether it's food or healthcare," Reid said, adding that he has had pets since he was a child.
Mars Petcare is the world's largest veterinary health provider and has a network of over 2,000 pet hospitals including Banfield, Blue Pearl, Pet Partners, and VCA.
"They can take even better care of their animal to increase its longevity and quality of life," Reid said. "If you do that, you have happier people, happier animals, and, I truly believe, a happier society."
Watch Reid explain Mars' pet-care business above, and read the full transcript here:
Kate Taylor: The pet-care category is fascinating to me because, as you said, there are so many different things that people are thinking about for their pets now that maybe they didn't 20 years ago. Why is that evolving so much?
Grant F. Reid: True. I think it's ... you know, our mission is to create a better world for pets in the pet-food side, and because pets create a better world for us. There's lots of data to show that it decreases loneliness, it's great for mental health, it's good for physical health. So, by creating a better world for pets, we essentially create a better world for us. And I think it's really taken off because people love their pets. I have two dogs, Ollie and Maddie, 14 and 12, and, you know, there's nothing like walking home and they run up to you, and they trust you 100%, and I think people are realizing, you know, pets are really good for their life, and that's creating this opportunity. And, I think millennials and Gen Z in particular have got much more dog ownership and cat ownership at an earlier age than, again, my generation.
Taylor: It seems like, as you're saying, millennials, Gen Z, they're willing to invest in pets in a different way than maybe older generations were. How is that showing up?
Reid: It's absolutely true. Because I think it's more, it's almost pet as children in some cases, you know, and so they have a higher disposable income perhaps than historically, and they're prepared to spend that because they're spending less on, if you like, physical assets, cars and houses. They're using their funds to, you know, take care of pets and are prepared to invest in them, whether it's food or healthcare.
Taylor: With that, what are some of the acquisitions or new brands that you're exploring in the pet-care area that wouldn't have been something that Mars thought about maybe a decade ago?
Reid: Our job is to continue to be a dynamic, fast-growing, change-accepting company, and our family ownership helps with that. We think in generations, not in quotas, which is I think a nice advantage versus some of my peers. So that allows us to say: Where do we want to be in 10, 15, 25 years? So we've done things in both an organic area, so organic is growing. Snickers, M&M's, Twix, Pedigree, Whiskas, Sheba, Uncle Ben's, you know, you still have to grow those brands and be relevant to the consumer, which is why we're continually renovating and using different mechanisms to engage with consumers there. But in addition to that, we see opportunities to enhance our portfolio, and we've done that very assertively over the last five years. In the food business, we've brought in a very interesting Indian brand called Tasty Bite, which brings Indian food, really high-quality, really authentic Indian food, to the rest of the world, which has been growing tremendously well. On the confectionary side, we've got a company called Turin, of Mexico, which is a premium chocolate, and expanded its distribution in the US. So, again, another opportunity to grow. And then specifically on the pet-care side, we've done a number of acquisitions. Most of the ones you would have been familiar with, I think, on the vet health. So we bought back our full share from Banfield, from PetSmart. We bought Pet Partners, we bought BluePearl, we bought VCA. And so now we're the biggest vet health company in the world. And you combine that with some of the small startups we're doing as well. So we have a company called Kinship, which is looking at new digital ways to interact with our consumers on the pet-care side. We have an investment fund called Digitalis. We're also investing in multiple things. So, we're growing small things ourselves. We're growing big things ourselves. And we're buying small, and we're buying large. So it's really a combination of things that will keep us relevant to the consumer, dynamic and growing. That's the plan.
Taylor: I've written a lot of things about how millennials and Gen Z are seeing pets almost as children, as we've said. Do we think that's going to continue?
Reid: Yes, I do. I think, I look at my own kids, 25, 23, and they just love their dogs. I mean, they just love them, and I know, you know, when they're in a situation to, that they can have the time to have, they're gonna have pets, so I do see that as a trend that will continue. It's been a long-term trend. So one of the companies that we acquired was VCA, and they talk about the change from the dog being out in a kennel in the yard, then it came to the porch, then it came into the house, then it went on the couch, and, in some cases, it's sleeping in the bedroom. That's a 30-year evolution that's happened in his time of running VCA. So I think that trend will continue. I haven't quite got the dogs upstairs yet, but they certainly jump on the couch.
Taylor: What comes next from this? I feel like dogs right now, and pets, it's so important in our lives. What comes next? How do we keep this going?
Reid: I think it's by taking even better care of them. All right? So I think, what I think this whole concept of "creating a better world for pets" is, if you do a DNA test, we have Wisdom Panel, take a DNA test, and you know exactly what your dog may be predisposed to have issues with. You can then take that information to your vet. Your vet says, well, one of the challenges is making sure your dog doesn't get obese. You fit a whistle, you can see exactly how much exercise it's taking. You can balance that with its nutrition. That whole 360 ecosystem is a very powerful concept and allows the dog or cat owner to have information that they didn't have before. They can take even better care of their animal to increase its longevity and quality of life. If you do that, you have happier people, happier animals, and, I truly believe, a happier society.
Taylor: Thinking about your dogs, what role do they play in your life, in the personal aspect of that?
Reid: Yeah, so they help me get steps. You know, we're on a step challenge at the office, so they're wondering why they're getting so well walked right now. That's because it's a step challenge. I've had pets since I was very young, and my first dog was a little corgi called Rascal. I collected it in my school cap, and some of the best memories I have are with animals. And I think if you can love and interact with animals, I honestly believe it helps you love and interact with humans. So, it's really quite an amazing thing. So my dogs listen to me when nobody else wants to. And they never tire of it.
Taylor: I know!
Reid: It's great!
Taylor: It's beautiful!
Reid: And they always look interested.
Taylor: It's a beautiful thing.
Reid: It is a beautiful thing! So, I think that's why they play such an important role in society and in lives. There's a great ad for Pedigree in the UK, and it shows you an old man, he's getting ready. Looks like he's gonna go out on a date, you know, he's getting ready, and he goes out, and he's going to somebody's house to walk their dog. And that's pretty much his kind of only social interaction in the day. So, think how powerful that is, and there's lots of data to show that animals, even if you don't own it, but you can walk one and take care of it, decreases loneliness tremendously. And, you know, that's part of a higher-order benefit, part of the higher-order mission, of coming to work. You're not only making great products, you're not only making money, you're not only able to feed your family, but you're doing something which is intrinsically powerful in society, and when you go home, you're passionate about it. That's pretty special.
Watch the full interview between Business Insider and Reid here.
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