🚨 NEWS ALERT

New Rules - The CDC has issued some new rules for importing your dog into the US in order to help keep out rabies.

Read about the new regulations.

THIS WEEK'S TOPICS:

• 🚀 Why are vet bills so high?

• 🍻 The dog bar trend is hitting Chicago

• 🦮 Is your workplace pet certified?

 🚀 WHY ARE VET BILLS SO HIGH?

As dog ownership and status of dogs has risen, so have the vet bills.

Personally we've noticed that more often our trips to the vet seem to lead to a battery of tests and costs that are higher than we remember in the past.

So what gives?

We did some digging and will give you our best guess at what is causing bills to go up.

The rise of dogs as part of the family

It's no secret that more and more people own pets these days, and that those pets are now viewed as a member of the family and not just some dog who happens to come inside some times.

And as you are probably tired of hearing from us, not only do more people own dogs, there are now a version of most human products or services for dogs.

This is the foundational piece of the puzzle, which is that when demand goes up (more dogs owned and more likely to be treated better means more money spent), supply (products and services for dogs) will grow to meet it.

Investors take notice!

Whenever an industry starts to grow, savvy investors will look to put their money to work in that space to ride the wave of progress.

Private equity firms and larger corporations have seen this trend in the pet industry for quite some time and have zeroed in on vet practices as a great investment for their funds. And by investment, we mean buying them up by the dozens, or what is known as a roll up.

Over the last 10 years, the percent of practices under a larger corporate umbrella have gone from only 8% to 25-30% currently.

And investors were right, as from 2019 to 2023, spending on pet health grew from $29 billion to $38 billion.

Some examples of these larger corporations include:

• Mars Inc (you know them from Snickers and Skittles) - more than 2,000 practices under Banfield, VCA, and BluePearl

• JAB Holdings (who also own Panera Bread) - 1,000 practices along with multiple pet insurance companies

• Shore Capital Holdings - Controls Mission Veterinary Partners and Southern Veterinary Partners

So first we had the rising demand in the dog industry, and now we have investors buying up vet practices to capitalize on that growth.

Focus on profits

Unsurprisingly, larger businesses focus a lot of effort on increasing profits. And when a company or investment firm buys a lot of vets, it's safe to assume that they will do the same. One way of increasing profit is by charging more.

This is a very common occurrence in human medicine, and research shows that when a private equity firm takes over a medical practice, prices and the number of procedures done goes up.

Our guess it that many of these practices were started by vets who were passionate about animals and the service provided and not primarily focused on creating a money making business.

And when an investor takes over, that original passion becomes secondary.

So finally, we have these now corporate vets being managed toward profit instead of care, and one way to increase those profits is to charge more and suggest more tests.

Is this bad or good, and what can I do about it?

Remember, this is all our take on things, but we think this is not a great thing for owners. The counter argument is that this is the free market in effect, and that competition and growth is good for the consumer.

We are worried about a few main things:

• 💰 Profit over patients - At what point does profit become more important than the care for patients? With human medicine there is more regulatory oversight that helps keep a standard for care, but that doesn't exist w/ animals

• 📈 Higher prices - Pretty obvious, nobody wants to pay more for the same service they've had before

• 🧪 Unnecessary tests and procedures - This seems to be a common occurrence when businesses are taken over, and something we've experienced first hand

• 🥼 More blanket care than specific - Another parallel to human medicine where larger organizations have a "standard" treatment for a lot of situations that don't take into account the patient as a unique individual

But to be fair there are some potential benefits:

• ❤️ Better care - One thing new investment brings is more capital to upgrade things like materials, equipment, etc. Many vets report getting access to better tools after their practice was bought out

• 🧠 More up to date knowledge - Larger organizations also benefit from more resources and knowledge that can be shared as best practices

• 👴 Life expectancy is going up - Private vets being purchased has been happening for many years, and during that time we are seeing pet life expectancy rise as well, so there is some proof that quality of care is improving

Ok, with all this info, what can we as owners do about this?

In this case, it's mostly about being knowledgeable about the situation. First off we suggest you figure out if your vet is owned by a larger corporation or not.

This is not always apparent, as it's found that only 15% of corporate owned practices are branded as such.

If it's us and we know our vet is owned by a larger corporation we may question some of the prescribed tests or shop around for procedure costs before pulling the trigger.

On top of that, more regulation might be on the way to help consumers. The Federal Trade Commission required, in a 2022 consent decree, that JAB seek prior approval before purchasing any emergency or specialty clinic within 25 miles of one it already owns in California and Texas for the next decade.

So not much, but maybe the start of more oversight to help protect people.

🍻 THE DOG BAR TREND IS HITTING CHICAGO

As metro areas continue to evolve, dog bars have emerged as a promising trend, piquing the interest of pet owners who yearn for social environments that embrace their pups.

Chicago is catching up with this trend as it welcomes its first bar integrated with an indoor dog park, dubbed 'The B-A-R', set to open in North Center this fall.

This newer concept has seen a rise in popularity across the U.S., with over 50 establishments blending bar service and pet-friendly amenities/parks.

These venues cater to a growing demographic of pet owners who appreciate the convenience of enjoying a social outing without having to leave their dogs behind, as well as giving them enrichment and social interaction as well.

Notably, places like Bark Bar in Arkansas and Bark N Brew in Wisconsin highlight the national appeal of such establishments.

The inception of The B-A-R was inspired by owners Morgan LaPorte and Scott Deady during a visit to Arkansas.

Situated at 2457 W. Montrose Ave., the venue will not only serve adult beverages but will also include a meticulously planned space for dogs, albeit without an off-leash option due to city regulations.

However, the couple is hopeful that local laws will evolve to further accommodate pet-friendly spaces.

In Chicago, where dog-friendly bars exist, the unique aspect of The B-A-R lies in its combination of an indoor park and bar, a first for the city.

The venue plans to offer memberships:

• $25 day pass

• $50 monthly pass

with non-dog owners also welcomed to enjoy the bar's offerings without membership.

As Chicagoans anticipate the opening of The B-A-R, it represents not just a new business venture but a cultural shift towards more inclusive urban spaces where the bond between humans and pets is celebrated.

We anticipate to see these continue to crop up across the country, especially in dense urban areas.

🦮 IS YOUR WORKPLACE PET CERTIFIED?

In the past, common criteria for job hunters would have been things like pay, health benefits, great culture and other.

But what about pet-inclusivity?

Well now it is, thanks to Vetster's new Pet Friendly Workplace Certification.

Around 70% of households in the US have at least one pet, and the demographics of those owners are shifting as the Millennials and following generations are 3x more likely to have a pet than a child, which has HR leaders looking at ways to build an inclusive workplace geared to the needs of animal care.

Enter Vetster, a marketplace that connects pet parents with licensed vets for for online services.

Vetster pounced on the opportunity to help workplaces stand out to job seekers while also likely getting access to many potential customers (well played).

The certification is available to any company, and applicant companies are evaluated across 4 main areas:

1. Pet Friendly Workplace Policies - Companies develop and incorporate pet policies throughout their people operations, including flex work strategies to accommodate pet care and exercise.

2. Pet Friendly Culture - Pet-inclusive cultures recognize the importance of pets to their employees and the benefits of stress release and community development, these companies create events, volunteer in their community, and actively engage pet owners in their needs.

3. Dog Friendly Offices - For those with physical office spaces, companies are committed to a healthy and safe office environment for animals and people including defined onboarding processes, pet-free zones, and employee training.

4. Pet Friendly Benefits - Supporting pets as part of the family, companies provide rewards, perks, health spending accounts, and pet health solutions as part of their total compensation strategy.

Vetster launches the certification with support from some big hitters, including Amazon, Spot Pet Insurance, TribalScale, and DECIEM.

You can see what leaders at those teams say about the reason behind partnering with Vetster:

So for those business owners out there, the next time you are hiring, think about whether you can promote your workplace as dog friendly.

If so, we strongly recommend you get certified by Vester as it's currently free and doesn't require a ton of info (other than having some clearly documented policies around pets).

This is a great way to attract better talent, and who doesn't love more dogs around!?

DOGGYDEX™

Winner 🏆: S&P 500

Proudly introducing the DoggyDex™, an index comprised of 10 publicly traded companies whose primary focus is the dog/pet industry.

List of tickers used can be found at the very bottom of the newsletter.

The yellow line-plot in the chart represents these companies above (DoggyDex™) and their combined performance against both the S&P 500 and Bitcoin on a weekly basis.

Pawformance is measured by % gains & losses.

• 😔 Dogs are fatally consuming a common houseplant: There has been an uptick in dogs dying from eating parts of sago palm plants.

• 🕺 Acrobatic pug: Petunia has her moves dialed in with her owner and doesn’t miss any cues as she performs aerial tricks off of her body.

• ⚫⚪ Black dog slowly turns white: Buster has vitiligo which is a rare genetic condition that causes him to lose pigment in his fur. Check out these photos of him transforming from black to white over the years.

A REALLY GOOD DOG

• $CHWY - Chewy: E-commerce platform for pet supplies

• $IDXX - Idexx Labs: Vet point of care instruments and vet software

• $FRPT - Fresh Pet: Pet food company

• $PETQ - PetIQ: Pet health products and medicines

• $PETS - PetMeds: Online pet pharmacy

• $ZTS - Zoetis: World's largest producer of meds and vaccines for pets and livestock

• $TRUP - Trupanion: Pet insurance company

• $WOOF - Petco Health & Wellness co.: Pet health & wellness company

• $BARK - BarkBox: Subscription service providing dog products, services, and experiences

• $PET - Wag! Group Co.: Tech platform that allows pet owners to connect with industry professionals for services such as, walking, training, etc.