The upsurge in the pets business for the past 10 months bodes well for sales of pet products for the foreseeable future.

Soaring demand
Starting last March, shelters, nonprofit rescues, private breeders and pet stores reported more demand for pandemic puppies and quarantine kittens (and other species) than there were animals to fill it, with some waiting lists running into this year. This in turn was forecast to boost pet product revenue and services by a mid-teens percentage to well past $100 billion, with sales in the licensing-friendly pet toy category surging 16.5%, according to Nielsen.

Opportunities abound. “You have the personification of pet, and right now the category is under-indexed for licensing despite pets increasingly being thought of as children,” says Stephanie Wissink, a Managing Director at Jefferies & Co. “You haven’t seen big licensors think about the pet category despite it being a more than $100 billion industry. Licensed products can create a level of intrigue, because it’s a novelty. When you walk by [a Target endcap] with your cart and you see BarkBox has a Peanuts collection, it’s a little bit of an impulse purchase.”

Product moves
Licensed products have been finding openings:

• In filing for an IPO in December, Petco highlighted not only its own brands, but also licensed products, including Hagen Group’s 15-SKU line of Hasbro-licensed Tonka dog products (i.e. pull toys, feed stations and treat holders).
• While BarkBox has long been known for developing its own products for the monthly subscription service, the company has been rapidly expanding its assortments of licensed properties. It has taken one-time licenses for limited edition boxes including for Peanuts, Scooby Doo, The Grinch and even Budweiser — the latter carrying a disclaimer that “for those who need to hear it, please don’t give your dog actual beer. That’s not cool.”  BarkBox, which has about a million subscribers, also has an endcap for its products at Target and is poised for an IPO this year.
• Pet Krewe launched its 22-SKU collection of Sesame Street costumes, pull toys and others items at 125 PetSmart stores – including 82 in Canada — last fall. The company is nearing agreement on two other entertainment character-based licenses as it moves to expand beyond owned brands, says CEO Allison Albert.
• Chewy.com’s launched sales earlier this month of Halo’s GPS-equipped dog collar that also can create 20 wireless fences and was developed with dog trainer Caesar Milan.

“The pet toy market is really saturated and licenses allow you to enter it without having to reinvent an existing toy,” says Albert. And they allow you to create something based on a character or property that may already have built-in demand.”

That demand is being driven younger adult consumers who may recognize a licensed property as being something from their childhood and one that will last long into this year as working from home remains a daily regimen.