A growing share of the $47 billion pet market is shifting to “uber owners” who make big money and spare no expense for the “functional pampering” of their pets, according to a report by Packaged Facts, a division of MarketResearch.com (New York).

According to “Market Trends: Premium Pet Demographics and Product Purchasing Preferences,” one in three pet-owning households in the United States—17.4 million of the 52.8 million that own a dog or cat—qualifies as a premium pet household, identified as single-person households with an income of $50,000 or more, two-person households with an income of $75,000 or more, and three or more person households with an income of $100,000 or more.

Between 1995 and 2005, “uber owners” making $70,000-plus more than tripled their household pet expenditures from $5.2 billion to $18.6 billion, and accounted for more than half of total spending in three of the four market categories examined by the report: pet food, pet supplies, pet services and veterinary services.

Among the most important premium pet product demographics are couples without children, including dual-income, no-kid couples and older “empty-nest” couples, who are growing in number. According to the report, the percentage of two-adult households without kids that own dogs or cats rose from 48.8 percent in 2003 to 51.9 percent in 2006. These households increased their share of all U.S. households with dogs or cats from 32.2 percent to 34.5 percent in the same period.

While much of the growth in the premium pet supplies market stems from an increase in the number of upper-income households, it also shows the success of marketers tapping into the willingness of these owners to buy the most high-end and super-nutritious products available at almost any cost, a practice Packaged Facts calls “functional pampering.”

“Products for pets are being made to resemble those for humans,” said Tatjana Meerman, publisher of Packaged Facts. “Especially among aging baby boomers, empty nesters, DINKs (dual-income/no kids couples) and singles, humanization is fueling consumer demand for premium products and services, including those bearing familiar brand names crossing over from the human side.”

Underlying the humanization and functional pampering trends is the aging pet population, said Packaged Facts, predicting this population will soon emerge as the single most important pet market sales driver and marketing thrust. As pets live longer due to better care, owners are developing deeper feelings for them. Due in part to the baby boomer demographic, the human population also is rapidly aging, and these older owners are more likely to rely on their pets as their primary source of companionship than younger owners, creating an additional emotional connection between graying humans and their aging pets.

According to the report, the senior pet population is at an all-time high and growing at a record rate. The U.S. dog population age 6 or older increased from 42.4 percent in 1996 to 46.7 percent in 2001, while the cat population age 6 or older increased from 37.4 percent to 42.5 percent. Trending these numbers forward puts almost half of all dogs and cats in the age 6-plus range.

Helping to steer the premium direction of the pet market is the surge in natural/organic food and products--the No. 1 most common claim for new products in 2006. Packaged Facts pegged U.S. retail sales of natural pet products at $728 million in 2006, up from $338 million in 2001, with food accounting for 71 percent of sales, followed by cat litter at 20 percent and health products at 9 percent. The report forecasts the market will top $1.1 billion by 2009.

Another high-growth area: new pet products designated as upscale, the second most common claim for new products in 2006. The number of new products with this claim rose 28 percent in 2006 versus 2005, reflecting a 35 percent jump for pet food and 13 percent increase for non-food pet supplies in a single year. Even more impressive, more than half of all new pet foods introduced in 2006 were tagged upscale, as were almost one-third of new non-food supplies.

Further contributing to the heightened interest in premium pet products—and also often associated with the senior pet trend—is the primary health angle of many new products and services. One of the most dynamic growth areas of the overall pet market is services, most of which are directly health related. Packaged Facts estimates U.S. sales of pet services at $18.2 billion, with veterinary services accounting for 74 percent of market revenues. Also booming nationwide are high-end pet hotels, which are attracting pet owners who never considered using a standard boarding facility.

Although DINK and “empty-nest” baby boomer couples are the most important premium pet product demographics, Hispanics and Asian Americans represent a growing force. While these groups are below average in their propensity to own pets, they still figure prominently among premium pet households. According to the report, 88 percent of Asian dog- or cat-owning households are more likely than average to fall into the premium pet household category. Although they are below average as pet owners and premium pet households overall, Hispanics index at 10 percent above average among the pet specialty cohort, reflecting a general preference in Hispanic culture toward smaller specialty shops.

Perhaps most significant in terms of future pet market prospects, both ethnic groups are growing much faster than the U.S. population as a whole, especially Hispanics. According to the report, the Hispanic population is projected to grow from 38.2 million in 2005 to 43.7 million in 2010, accounting for 45 percent of total domestic population growth over the period. The Asian population is projected to grow from 12.5 million in 2005 to 14.4 million in 2010, accounting for 16 percent of total domestic population growth.

To purchase the full report, which examines the groups most likely to buy premium pet products, visit www.packagedfacts.com/Trends-Premium-Pet-1219010/.  [November 2007 PET AGE]