Pampered pooches: Which ASX stocks are riding the ‘humanisation of pets’ trend?
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Australia has experienced what has been described as a Covid-19 pet boom with households owning a pet increasing from 61% to 69% in the past two years.
In its report Pets and the Pandemic, Animal Medicines Australia found that Covid-19 created an opportunity for Australians to introduce a previously desired pet into the family, particularly as a way to bring comfort and joy during a time of uncertainty.
Furthermore, more time at home through Covid-19 restrictions meant more time to devote to pet care.
“For instance, working-from-home arrangements have provided the opportunity to spend time with a young pet,” the report noted.
As pets became increasingly part of the family the “humanisation of pets” trend has emerged with so-called “pet parents” spending big to pamper and ensure their animals are provided with creature comforts and optimal care.
Australia’s largest regional veterinary network Apiam Animal Health (ASX:AHX) is at the forefront of changing pet ownership.
Apiam has more than 60 production animal and mixed animal practices in rural, regional and periurban areas.
MD Dr Chris Richards told Stockhead there’s a growing expectation among animal owners that medical services are similar to levels provided for people.
“We offer a service ‘Best Mates’ where pets can come in unlimited times and we’re seeing those members coming in six to eight times a year to pick up any early disease or concerns,” he said.
“We’re also seeing people bringing in pets, particularly dogs, for routine dental checkups, scale, and polishing like with humans.”
He said CT machines and MRI have also become more mainstream in veterinary care for advanced diagnostics.
“We’re also putting in rehabilitation services so when dogs for example have back injuries or cruciate repairs there’s a whole after-surgery treatment rehabilitation program,” Richards said.
“We’ve got two clinics that have recently put in water treadmills to help with rehabilitation and we are seeing a lot more specialisation and new services; for example, we have a vet who is dedicated to behaviour.
“There are new parts of veterinary services starting to emerge and we have more focus on cancer care and technology such as stem cell therapy coming into the industry.”
Furthermore, Richards said the cost to acquire a pet such as a dog “is at a whole new level”.
But he said with the extra expectations comes greater stresses to the veterinary industry, which unlike human medical care in Australia isn’t subsidised by Medicare, only pet insurance.
“The costs of veterinary services are increasing and visual to owners because there’s not a Medicare system that compensates it,” he said.
“A young animal is similar to kids with ear infections, gastrointestinal issues, accidents and so on but as they get older there’s a lot more arthritis, cancer, heart disease and skin conditions and issues.”
Here’s a look at some of the other ASX stocks in the pet care sector.
Australia’s largest marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products has also ventured into animal care under its subsidiaries Masterpet and Lyppard.
Lyppard is an Australian veterinary wholesaler providing products for companion and production animals and elite athletes of the equine world.
Masterpet has brands such as Black Hawk, VitaPet, AristoPet, Trouble & Trix, and Yours Drooly.
EBOS also has Animates, a specialty pet retail supplies brand with stores throughout New Zealand, trading as a joint venture with the Australian brand Petbarn.
The company established an $82 million Pet Care Manufacturing Facility at Parkes, NSW, which commenced operations in the second half of FY22.
“Nutritional excellence and innovation are a centrepiece of the facility as we strive towards a goal of human-grade pet food,” EBOS said in its 2022 annual report.
“The increasing sales of premium pet food reflects the underlying trend of the humanisation of pets with pet parents willing to spend more on their pet’s needs.”
The online digital platform provides a pet marketplace of services including sitting, walking, day care and grooming to pet owners. Mad Paws only speaks for about 3-4% of the pet marketplace in Australia with therefore plenty of room to grow as more private operators chose to come under their banner.
MPA also has a diversified revenue model including e-commerce platform Pet Chemist for dispensing prescription pharmaceuticals and over-the-counter health care products for pet owners.
It also has a growing subscription revenue model via multiple verticals including Waggly toys & treats, Mad Paws Insurance, Dinner Bowl for fresh food and Sash for beds and other accessories.
MPA has a total addressable market of $30 billion with ~300k customers. The company recently provided a solid Q1 FY23 update including revenue of $5.4 million, an increase of 301% on pcp and group operating revenue of $23 million, up 85% on pcp.
Cancer is the leading cause of death in companion animals. PharmAust’s flagship treatment monepantel (MPL) is currently being studied in a Phase 2 clinical trial of canines with lymphoma cancer, in addition to human trials in Covid-19 and Motor Neuron Disease.
PAA principal investigator of the canine clinical trials Dr Kim Agnew said cancer treatments in pet care have evolved enormously and said the pace of evolution is only accelerating, even when compared to a decade ago.
He said in the past, palliative treatment and cytotoxic chemotherapies have always been the gold standard, but researchers have the tools and the encouragement to now look beyond the expected and incorporate entirely new approaches.
The Aussie pot stock has ventured into pet pain management through its acquisition of US-based Sierra Sage Herbs.
Part of the Sierra Sage Herbs Green Goo range is animal pain relief to help ease the aching of arthritis, sore muscles, bruises and strains.
Furthermore, Creso’s Anibidiol 8 formulation is designed to support the immune system and natural response of cats and dogs.
Anibidiol 8 contains a mix of hemp oil, vitamins and Omega fatty acids.
Another medical pot stock focused on the development and commercialisation of cannabinoid-derived therapeutic products to address the unmet needs of both humans and animals.
AC8 acquired former ASX-listed Cannpal Animal Therapeutics in 2021. Now a subsidiary of AC8, Cannpal is developing products based on CBD, THC and other active ingredients for registration as veterinary medicines and nutraceuticals in the areas of pain, inflammation, mood and skin conditions.
Billion-dollar ASX-listed natural health company Blackmores is well known for its supplements including vitamins, minerals and herbal supplements.
Blackmores also has pet healthcare products through PAW, which was acquired by the company back in 2010 to form its animal health division.
According to the Blackmores site the PAW range of natural pet healthcare products focuses on the following areas:
InvoCare is a major provider of funeral services in Australia, New Zealand and Singapore. The company operates private memorial parks and crematoria in Australia and New Zealand.
InvoCare has also become the leading provider of pet cremation services in Australia. IVC owns and operates pet cremation businesses in New South Wales through Patch & Purr, Queensland through Pets in Peace, Western Australia, Victoria and South Australia through the Family Pet Care, Lawnswood and Edenhill brands.
If you’re looking for a product for your pampered pet, then online retailer Kogan has you covered. Kogan sells a range of pet gear from bedding to grooming, while also offering pet insurance.
At Stockhead we tell it like it is. While Creso Pharma and PharmAust are Stockhead advertisers, they did not sponsor this article.