by Steve King, President, Pet Industry Distributors Association
Published in Pet Age magazine
The joke making the rounds of pet industry trade shows this summer was that the Pet Industry Distributors Association (PIDA) could hold its next member meeting in a Mini-Cooper; we would all fit and everyone would be headed in the same direction.
There is no question that distributor consolidation has been one of the biggest stories in the pet industry for the past few years. As the industry association representing wholesaler-distributors, PIDA has been at the epicenter of forces that are profoundly changing how business is conducted in the pet specialty channel.
Some assume that consolidation will diminish the traditional role of distributors in the channel or that business will be concentrated in the hands of a few large companies. Our experience to date has not borne that out. PIDA membership has remained remarkably steady over the past decade, with an average of 54 distributor members. There are 57 distributor members today. Over the past two years, PIDA has added seven new distributor members. Many of these new members are niche distributors or pet food wholesalers who see PIDA as the place for networking with their peers, training for their employees and customers, and communications with suppliers who understand the value of distributors in the supply chain.
The results of PIDA’s most recent Industry Size Survey show that distributors’ market share is growing. 2013 survey results revealed that members did more than $3.3 billion in sales at wholesale last year, compared with just over $3 billion the prior year. This translates to $4.45 billion in retail sales, assuming a blended margin of thirty-five percent. (Petsmart, with just over 1,200 stores, generated $6.4 billion in net sales in 2012.)
PIDA members operate 94 distribution centers, conduct more than 50 regional trade shows annually and employ more than 960 sales professions, including 560 field sales people calling on pet retailers every day. The typical distributor stocks more than 8,000 products and carries $10 million in inventory at any given time. Remarkably, distributors made more than three million deliveries to their customers last year!
To borrow a phrase, this is not your father’s pet industry. Its growth into a $55 billion a year industry has attracted the attention of investors and multi-national corporations. The marketplace will ultimately determine how many manufacturers, retailers and distributors are needed to serve the needs of pet owning consumers.
Demographic changes will provide opportunities for independent retailers who position themselves to take advantage of shifting priorities of consumers in their markets. Product selection and mix, services and marketing strategies will all factor into the success of well-managed pet stores. Equally important will be a strong working relationship with local or regional pet product distributors. They can help you select products that consumers want and will make sure that your shelves are well stocked. They will help with your marketing by offering specials and providing flyers and other tools to reach pet owners in your area. They will extend credit to help you manage your cash flow. In short, they will be an essential partner with a vested interest in your success.
PIDA was founded in 1968 by a handful of distributors who saw the need to learn from each other and improve business conditions in a rapidly expanding industry. The intervening decades have seen remarkable changes in how business is conducted in the pet industry. One thing that has remained constant, however, is the role of wholesaler-distributors in supporting independent pet retailers. Let’s continue to grow together!
Steve King is president of the Pet Industry Distributors Association, which represents wholesaler-distributors of pet products and the manufacturers that go to market through this channel.