Los Angeles, CA (PRWEB) November 20, 2012
Revenue for the Flea and Tick Product Manufacturing OTC industry has remained relatively stable over the past five years, growing at a slight annualized rate of 0.6% to roughly $552.2 million. In general, consumer demand for pet products, particularly pharmaceutical treatments, carries a somewhat inelastic quality. “Many consumers treat their pets as members of their family, sparing no cost to ensure the health and wellbeing of the animal,” says IBISWorld industry analyst Antonio Danova. Thus, unlike most manufacturing industries, the industry benefited from relatively stable demand even during the height of the downturn, as it endured only minimal losses of 1.1% and 1.4% in 2008 and 2009, respectively. Still, as the economy gained steam in 2010, those consumers that did delay purchases during the recession flocked back to the market, facilitating growth of 2.3% during that year. Demand has remained buoyant, and IBISWorld expects revenue to grow 1.7% further during 2012.
Despite benefiting from largely stable sales of flea and tick products of the past five years, firms' profitability was hampered by increasing government regulation of the industry's products, Danova says. According to the Animal Health Institute, the US Food and Drug Administration (FDA) and US Environmental Protection Agency (EPA) work jointly to ensure the safety and effectiveness of the product while protecting the individuals around the animal as well as the environment. Meeting such standards has increased the cost of production for firms, which has ultimately subdued the potential for more rapid margin growth in the Flea and Tick Product Manufacturing OTC industry over the past five years.
Over the next five years, the industry will continue to benefit from steady demand from pet owners while heavier expenditure in research and development (R&D) will drive firms to produce high-margin products that will drive profitability. Additionally, demand should grow as IBISWorld expects the total number of pet owners in the United States to increase 2.2% per year on average over the next five years. This, along with the development of new flea and tick treatments, will help generate new sales. As a result, industry revenue is expected to grow over the five years to 2017. The Flea and Tick Product Manufacturing OTC industry has a high level of market share concentration. In 2012, the top four companies in the industry are estimated to account for almost three-fourths of overall revenue. The industry's most dominant operators are large, multinational pharmaceutical companies, such as Bayer AG and Merial Limited, which is owned by Sanofi. These large pharmaceutical companies have the capital and resources to invest in new products and technologies. For more information, visit IBISWorld’s Flea & Tick Product Manufacturing OTC in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is comprised of firms that primarily engage in the manufacture of over-the-counter (OTC) flea and tick prevention and treatments for animals. Products available include creams, tablets, collars, shampoos and sprays.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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