By: Dylan Sikes - AllPennyStocks.com News

Tuesday, May 20, 2014

For animal lovers, it is encouraging to read that the number of euthanized dogs in cats in North America decreased 18 percent on a same-shelter basis during the January to March period at animal welfare organizations, or AWOs, when compared to the first quarter of 2013. At the same time, adoption fees for dogs and cats increased 3 percent, according to a report by Pethealth, Inc. late in April. Pethealth (TSX:PTZ) is a clear industry leader, currently standing as North America’s second-biggest provider of medical insurance for dogs and cats to pet owners, a provider of cloud-based management software to AWOs and leading provider of pet-related database management services. As of today, May 20, the company has 2,075 licensed users of its PetPoint platform, a software solution for AWOs for a wide range of services, through tracking animals via microchips to automatically update animal listings for adoption. Across those licensees, over 2.4 million animals were brought in last year and more than 1 million pet adaptions were completed.

Pethealth also conducts expansive surveys to keep a tab on consumer industry trends of pet adapters, a valuable dataset for AWOs as well as manufacturers, sellers and retailers.

On Tuesday, Pethealth released its fifth iteration of a special report survey of new cat and dog adapters, which bodes well for some companies and should have others checking into what’s going wrong with their initiatives. The latest data was collected across March 1, 2013 to March 31, 2014 and included surveys from more than 216,000 new pet adopters in the U.S., including almost 9,000 fully completed surveys. Incidentally, the data is aggregated through the PetPoint application.

Some trends continued from the year prior, such as 88 percent of animal adaptions for respondents took place in AWOs, a rise of 6.8 percent from 2013, although the two main satellite locations for AWOs – PetSmart (Nasdaq:PETM) and Petco – declined from 16.8% to 11.2% of adoptions. The good news for PetSmart is that at 49%, it still remains the most popular retailer for adopters to purchase pet supplies. The bad news is that about 46% of respondents said that they would switch their purchases to their local mass grocery store if their preferred product were available there. Perhaps grocers like Kroger (NYSE:KR) should be looking at the data and considering some pet isles additions based upon that tidbit from the survey.

And it sound like some advertising should be devoted to online, but stick mostly to the televisions as only 30% of respondents said online ads are more influential to them, versus the tube.

Speaking of the Internet, Amazon.com increased its lead as the most frequent spot for online purchases of food and pet supplies, jumping from 28.4% a year earlier to 37.8% in the latest survey. Petco.com lost ground, slipping from 11.0% to 8.5% and PetSmart came in fifth with only 6.9% of votes, compared to 13.0% a year prior.

Hill’s Science Diet, a product of Colgate-Palmolive (NYSE:CL) subsidiary Hill’s Pet Nutrition, Inc. was the most popular pet food bought online, gaining from 9.1% to 13.1%, although 40.2% of respondents said shipping costs kept them from buying food online. Other things weren’t as rosy for Hill’s. Their dog food was the most widely given away to new pet adopters (44%), yet only 10.9% bought Hill’s if they didn’t get free food. Purina, a part of Nestle SA (OTCQX:NSRGY) held onto its position at the top of most frequently bought food purchased at the point of adoption. Although it was not broken down to get a precise read, 69% of new adapters given free food now buy a different kind of food for their pet.

The vast majority of adopters (80%) were female between the ages of 18 and 54 (75%) with more than half having a post secondary degree and 42% having an income in excess of $60,000.

All of this doesn’t mean a whole lot for the share value of Pethealth, as shares are flat at $1.65 in Tuesday action, but it is some interesting data in tracking the actions of new pet adapters and food for thought as comparative data from other research for marketers and investors.

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