Animal shelters and rescue organizations across the country are reporting unprecedented surges in pet fostering and adoption, as families suddenly have more time on their hands and the lonely seek companionship amid life in coronavirus quarantine.

That’s consistent with trends dating to the Great Recession and the Sept. 11, 2001, terrorist attacks, after which rates of dog ownership increased. The $95 billion pet industry emerged from the 2008 financial crisis in a relatively strong position and strengthened its reputation as recession resistant.

But the coronavirus pandemic poses a new challenge.

“Many pet service providers are mom-and-pops whose businesses might not survive the crises,” the market research firm Packaged Facts said in a report last month.

Pet owners who are now working from home are less likely to hire dog walkers. Many groomers and dog day care centers have temporarily closed as part of the broad shutdowns of businesses. Pet boarders are losing business from travel restrictions. Total U.S. retail sales of pet products and services will drop 17% this year, according to projections by Packaged Facts, compared with the 5% growth anticipated before the outbreak.

Pet businesses are adjusting, and some may even be well-positioned to capitalize on an increasingly health-conscious public.

Consider the Philadelphia-based start-up Because Animals. The company sells supplements for dogs and cats that it says promote “coat, immune, and digestive wellness,” powered by probiotics, omega 3 and omega 6 fatty acids, and organic ingredients such as pumpkin powder and blueberries. Another product: organic dog cookies with B vitamins. (Some skeptics say the benefits of these kinds of products remain unproven.)

Through the first week of April, the company’s online sales had already exceeded its total for March, said co-founder and chief revenue officer Joshua Errett. He expects April sales to double from last month.

Errett attributed that to consumer stockpiling amid coronavirus-related uncertainty, as well as a “search for something healthier.” There’s long been a demand for high-quality products among “super premium customers,” in retail parlance, and Errett said more consumers were now giving a closer look at pet food’s possible health benefits.

Shannon Falconer, CEO of the Philadelphia start-up Because Animals, which makes treats for cats and dogs.
Because Animals
Shannon Falconer, CEO of the Philadelphia start-up Because Animals, which makes treats for cats and dogs.

Most of the growth came from sales on Amazon. “I have to chalk that up to consumers entering the online space who don’t normally shop there and seeing a wide world of other pet products — other than what’s in grocery stores,” Errett said.

Indeed, the pandemic may well accelerate the growth of e-commerce in pet product retail. E-commerce accounted for 22% of sales in 2019, according to Packaged Facts, a share that is projected to grow to 31% by 2024. E-commerce growth in the industry has been supercharged by the success of Chewy, the online pet food marketplace that went public last year. Chewy’s stock price jumped almost 27% in March, even as the broader S&P 500 index dropped 13%.

Suppliers for Because Animals in Vermont and Iowa have been designated essential businesses. The company is still scaling back production a bit, holding off on plans to roll out some new products, Errett said. The virus is not slowing Because Animals’ work in the lab on its marquee product, which it plans to bring to market next year: cultured meat, or meat that is grown from bovine cells without raising and slaughtering animals.

Because Animals is backed by venture capital funding; it isn’t wholly dependent on sales to remain in business.

“I used to say to investors, pet food is recession-proof as an industry. ... It might actually be true,” Errett said. “Seeing the world come crumbling. Nothing is going to break the love you feel for your cat or your dog. You’re not going to let anything come in the way of that, be it a pandemic or recession or whatever it may be.”

Businesses that focus on pet health are likely to do well amid the pandemic, said David Lummis, a pet market analyst for Packaged Facts.

“People want the same kind of products for their pets that they are using for themselves,” he said. “And as we’re more health-focused we become the same way for our pets.”

He added that businesses promoting “super premium” brands are somewhat insulated from a shrinking economy, in part because that market is driven by relatively affluent households.

But Lummis questioned how long these businesses — many of them relatively new with just a handful of employees — would be able to “weather the economic storm.”

It’s a question that is top of mind for Jennifer Kirby and Chris Courter, founders of Piggyback Treats Co.

They partner with restaurants and farmers to collect food that would otherwise go to waste, and use it to make pet treats in their Chestnut Hill home. Sustainability is a big part of their pitch — even the packaging is compostable. Popular items include dehydrated salmon skins and beer bones made with spent grains, byproducts from brewing beer.

Chris Courter and Jennifer Kirby own and operate Piggyback Treats Co. Their dog, Candy, with a bag of treats outside their home in Philadelphia.
DAVID MAIALETTI / Staff Photographer
Chris Courter and Jennifer Kirby own and operate Piggyback Treats Co. Their dog, Candy, with a bag of treats outside their home in Philadelphia.

When the coronavirus hit, “it was initially really scary for us,” said Kirby, a pastry chef by training. They had already spent $8,000 to book spaces at shows and festivals in March and April, which they expected to generate $28,000 in sales. These in-person events had been the primary source of revenue since Kirby and Courter founded the business in 2017.

Suddenly, they were postponed or canceled.

The couple’s plan had always been to make the business a boutique online brand. The pandemic has accelerated their digital transition. Online sales rose sharply over the four weeks ending April 10, Kirby said. It likely won’t be enough to make up for the lost revenue, but “we’re keeping our head above water,” Courter said.

While pet food is the most resilient part of the industry, non-medical services such as training, grooming, and pet sitting are most vulnerable in a downturn. Packaged Facts projects that sales in this area will drop nearly in half from $10.3 billion in 2019 to $5.5 billion this year.

Leigh Siegfried feels those headwinds. The owner of the dog-training business Opportunity Barks, she had to halt dog day school and other services at her three stores in Old City, East Falls, and Quakertown. Now she’s doing virtual training, offering one-on-one sessions and smaller group classes.

“We’ve been busy building online platforms and getting that rolling,” she said.

Leigh Siegfried, owner of Opportunity Barks, is offering virtual dog training sessions during the pandemic.
Courtesy Leigh Siegfried / Leigh Siegfried
Leigh Siegfried, owner of Opportunity Barks, is offering virtual dog training sessions during the pandemic.

Most clients are OK with the switch, Siegfried said, and she’s been able to retain her full workforce of nine employees.

“We’re trying to up our ante with a lot more one-on-one face-time with class clients than we normally would,” she said.

The greatest hope for the industry is that growing rates of pet ownership will translate into more business later.

“There seems to be something about economic and emotional trauma that causes a spike in pet ownership," Lummis said. "I think it’s going to be even more pronounced this time.”

A lot of people have been buying puppies in recent months anyway, Siegfried said, and many of them won’t want to wait out the pandemic to start in-person training.

She’s also offering free consults for people who have new foster dogs.

“I just felt like people are … making the move to get these dogs,” Siegfried said. “Maybe it’s going amazing and that’s cool. And if it’s a little more than they bargained for, they need support.”

She added: “We’ll probably see them in class or lessons down the road.”