Chapter 1: Executive Summary
Scope of Report
Report Methodology
Introduction
History of the Horse
A $100 Billion Impact in 2003
In 2008, the Perfect Storm began
Growth Projection to 9.3 Million Horses in 2010
Where the Opportunities Lie
Sources of Information for Equine Owners
Figure 1-1: Information Sources
The Feed Marketers
Figure 1-2: Company Shares of the Equine Grain and Concentrates Segment of the Feed Market, 2009
Regional Mills: A Force to be Reckoned With
Figure 1-3: Locations of Regional Feed Companies in North America
Where Hay Fits in
Supplements Also Face Harsh Criticism
Hay: The New Competition
Beyond 2009
Equine Health Marketers Face Similar Competitive Threats as Feed
Table 1-1: Growth Rates, by Company, 2007-2008
Colic and GI Issues Number One Concern Among Horse Owners
De-Worming Products
Figure 1-4: Leading Equine Health and Nutrition Products Purchased at Retail, 2007
Brakes put on Deworming Market Growth
Competition from "Natural" Worming Products
The Ulcer Treatment Category also faces intense Competition from Natural Products as well as Alfalfa Hay
Antacids
Herbs Heal Ulcers
Generic Omeprazole
Alfalfa hay: Simple and Inexpensive Ulcer Protection
The Health Care Competitive Landscape
Table 1-2: Post-Merger Sales, Based Upon 2008 Sales (in $ millions)
The Middlemen: Veterinary Supply Companies Servicing Equine Veterinarians
Table 1-3: Veterinary Supply Companies, Ranked by Revenues, 2008-2009
Equine Services, a $13 Billion-Plus Market
Figure 1-5: Equine Services, Shown as Shares of Total Services Category, 2009
Over 40% of horse owners rely on their vet for health information
Farriers, and Other Hoof Care Professionals, are Often Overlooked by Marketers
Dental Care Becoming Routine
Table 1-4: Poll: "How often do you have your horse's teeth floated?"
Horse Trainers: Key Influencers
The Economy
Horse Supply and Demand
There is Some Good News
Opportunities in repair of large-ticket items
Figure 1-6: New Horse Trailer Purchase Plans, Poll: "Will you purchase a new horse trailer in the next year?"
Horsemanship is a Lifestyle
Chapter 2: The Horse Population
Introduction
The Equine Population in the US: 7.3 Million are Considered Pets
Figure 2-1: Number of Horses and Ponies in the United States, Inventory, 2002
Figure 2-2: Number of Horses and Ponies in the United States, Inventory, 2007
Between 10 and 13 Million Horses in the United States
The Perfect Storm
40% of Respondents Reduced their herds in 2008
Growth Projections
Figure 2-3: U.S. Horse Population Growth, 1985-2012E (in millions)
State-by-State Analysis
Texas: Almost One Million Horses
Texas Horse Incentive Fund Bill Signed by Texas Governor
California: 0ver 700,000 Horses
Florida: 500,000 Equines and Growing
Table 2-1: Top Three States' Equine Population Growth, 2003-2009
Other Key States: Oklahoma, Kentucky, Ohio, and Missouri
Table 2-2: Breeding Statistics, by State, 2007
Horses, by Use
Table 2-3: U.S. Horse Population, by Use (in millions)
Figure 2-4: Horse Population, by Use, 2009 (as a percent of total)
How are Horses Used?
Horse Population, by Breed
Quarter Horses: America's Choice
Figure 2-5: Quarter Horse Registrations, 2003, 2007, 2008, 2012E Racing Thoroughbred Headcount Overstated by 100%
Health of the Thoroughbred Industry
Figure 2-6: Thoroughbred, Price Per Yearling, 1998-2008
Table 2-4: Average/Median Price Per Yearling, 1990-2008
2009 Foal Crop lowest since 1997
Figure 2-7: Annual North American Registered Thoroughbred Foal Crop, 1999-2009
The American Paint Horse: New registrations decrease by 45%
Still, there are about 600,000 Paint Horses in the U.S.
Figure 2-8: Paint Horse Registrations, 2003, 2007, 2008, 2012E
Figure 2-9: U.S. Horse Population, by Breed, 2009 (percent and in millions)
Data Discrepancies Abound
Figure 2-10: Horse Ownership, Types of Horses Owned (% of total mentions)
"Other" Horses Comprise About 40% of the US Population
Gaited Horses: One million horses, and 35 different breeds
Mustangs
Growth Despite Lower Registrations
Boutique Horses are a Viable Marketing Opportunity
Where are All These Horses Kept?
Figure 2-11: Horse Boarding vs. Keeping at Home, 2006
Unwanted Horse Coalition Survey: Over 20,000 interviews with Horse Owners!
Horses and acreage
Table 2-5: Poll: "How many acres are there where your horse lives?"
Figure 2-12: Horse Acreage
Chapter 3: Horse Owners and Caretakers
The American Horse owner
She's 47 and Married and Owns a Single-Family Home
Figure 3-1: Income Level of Horse Owning Households
3.9 Million Households Owned Horses in 2008
Figure 3-2: Trended Pet Ownership as a Percent of the U.S. Household Population
Figure 3-3: Number of U.S. Households That Own a Pet versus the Number of U.S. Households That Own Equine (in millions)
Figure 3-4: Number of Horses Owned by Tenure, Presence of Children, Primary Product Purchaser
Figure 3-5: Horse Ownership
Horse owners by Segment
Professional Owners
Recreational horse owners
Figure 3-6: Number of Events Participated in During the Past 12 Months
Casual and Intensive Recreational Owners
Figure 3-7: The Equine Market Segment Overview
Horse owners by Discipline
Western Disciplines
Reining: Interest and Spending Surges: What Recession?
Roping
Roper Demographics
Figure 3-8: Demographics of USTRC Team Ropers, by Age and Gender Characteristics (percent)
Figure 3-9: The Stereotypical USTRC Team Roper
Barrel Racing
Barrel Racer demographics
Cutting
Cutter Demographics
Team Penning
Team Penner Demographics
Ranch versatility events
Trail Riding: The largest number of participants!
Trail Riding is family-oriented, and often FREE
Trail Rider Demographics
What About Endurance Riding?
English Disciplines
Dressage
Dressage Rider Demographics
Eventing
Eventer Demographics
Hunters and Jumpers
Natural Horsemanship
Sources of Information for Equine Owners
Figure 3-10: Information Sources
RFD-TV: 9.4 Million Weekly Adult Impressions
Chapter 4: Equine Feed Products and Companies
A $9 Billion Industry
Feeding Defined
No Grains or Concentrates
The Costs of Feeding Horses
Figure 4-1: Dollars Spent Feeding Horses in the United States, 2008-2009
Equine Feeding, One of the Top Two Annual Expenses
Figure 4-2: Items Currently Owned, Amount Spent for Items in the Past 12 Months
The Companies Don't Divulge Information
Figure 4-3: Company Shares of the Equine Grain and Concentrates Segment of the Feed Market, 2009
Table 4-1: Two Industry Leaders, at a Glance
Florida Market Analysis
Top Five Companies Control 75% of Florida's Market
Table 4-2: Volume Share of Equine Feed in Florida Market, by Manufacturer, 2008
Figure 4-4: Volume Share of Equine Feed in Florida, 2008
The Producers
Land O'Lakes Purina Feed
The Acquisition in 2001
History
The Parent, Land O'Lakes
Figure 4-5: Land O'Lakes Revenue, by Segment, 2008 (in $ billions)
Feed Segment Reorganized in 2008
Feed Mills Operating Below Capacity in 2008
The Products and Brands
Lifestyle Feed Brands
Feed Division (LOL/Purina) Financials
Table 4-3: Purina (Land O'Lakes Feed Division) Net Sales, 2004-2009E (in $ millions)
Figure 4-6: Purina (Land O' Lakes Feed Division) Revenue, 2004-2009 (in $ billions)
2009 Outlook for Land O' Lakes and Purina
Sales Suffering at Land O'Lakes, but 2009 Earnings up 35%
Purina Mills Horse Business Group
Purina is About Education
Purina Market Share Steady
Purina Mills Products and Brands: Strategy remains Purina's #1 Product
Strategic Strategy Ads
Horseman's Edge # 2
Equine Senior: #1 in Senior Feed
Ultium: Breakfast of Champions
Purina offers Free Feeding Trial for One Horse
New Product Line: WellSolve
Competition to WellSolve
A note about the Research for WellSolve L/S and Special Needs Horses
About One Half of Purina Dealers Stock WellSolve
Price is Top of the Line
Unique Full Scoop Formula for Weight Control
Marketing WellSolve to Veterinarians
Production and Distribution
The Role of the 850 Local Cooperatives
Sales, Marketing and Advertising
Research and Development: Over $13 million Spent in 2008
Competition, According to Purina
Farnam Platform: Made by Purina
Farnam Platform and Tractor Supply
Platform: Uphill Battle
Two-Stop Shopping
Cargill
Cargill and Nutrena, a Rich History of Acquisitions
Cargill Financials
Table 4-4: Cargill Finances at a Glance
Cargill is the Largest Privately Held Company in the United States
Closing Feed Plants
Products and Brands
Nutrena is the Brand Leader in Equine Feed in the United States
Nutrena SafeChoice: Competes with WellSolve L/S at half the price
Nutrena LiteBalance Competes with WellSolve W/C at half the price
EnergX: Revolutionary Oat-Replacement Product
Figure 4-7: Glycemic Index When Fed at Equal Energy Levels
Cargill's Other Brands: ACCO, Agway, Prime Quality
Sales and Marketing
Team Nutrena
Nutrena Partners With Chris Cox in 2009
Nutrena R&D, not exclusively equine
Nutrena's Focus is Nutrients not Ingredients
Do ingredients REALLY matter?
Take Home Message to Equine Feed Consumers: Buyer Beware
Nutrena Targets Horse Owners Concerned About Safety
Nutrena's Competition
Second-Tier Companies Battle for Market Position Behind Purina and Nutrena
Manna Pro and Walmart
The Company
Calf-Manna: Not Just for Calves
Manufacturing and Distribution
Equine Product Line
Mars, Inc.
Buckeye
Seminole Feed, Mars Horsecare team up
Major Marketing Push in the United States
Three Senior Feeds from Buckeye
Hay Replacement Products
Doane Petcare Purchase
Cavalor: New Feed Introduced in the United States
The Products
Ultium's New Rival is Cavalor
Regional Mills: National Influence
Over 100 Different Brands Recommended by Veterinarians
Figure 4-8: Locations of Regional Feed Companies in North America
The Southeast Market
Seminole: A Regional Company with National Reputation
The Products
Retail Store Personnel "SOLD" on Seminole
National Expansion and Public Offering?
OBS: Ocala Breeders' Supply Snares 11% of the Florida Market
Southern States, a Virginia-based Farmers' Cooperative
Growth Via Acquisitions
Southern States' Equine Focus
Products and Brands
Legends is the #1 Southern States Brand
Southern States Offers "No Cost Feeding Trials"
Southern States Partners with Triple Crown
Senior Feed, #3 in Veterinarian Survey
Triple Crown Educates Consumers about Companies Using "Least Cost Formulation"
Regional Companies Own Ohio
Kalmbach Feeds, since 1963, Upper Sandusky, OH
Tiz Whiz
TDI: Another Ohio-based Premium equine feed company that uses a Fixed Formula
Pennfield Equine Feed Technologies: Premium Fixed-Formula
Kentucky Equine Research
Focus on Nutrition of the Performance Horse
Distribution
Tractor Supply
Figure 4-9: Tractor Supply 2008 Segments, as Percent of Total Sales
Vendors and Distribution Network
Growth Opportunities for Feed Companies: Equine Disorders and Diseases
Obese/Overweight Horses: As high as 51%
Natural Grazing vs. Overfeeding, Which is the Culprit
Insulin-Resistant Horses
Equine Polysaccharide Storage Myopathy (EPSM)
Feed Grass (or hay), as nature intended
Explosion in New Feed Choices
Throwing Supplements Away
Figure 4-10: Share of U.S. Retail Sales of Pet Supplements and Nutraceutical Treats by Animal Type, 2004 vs. 2007 (percent)
Figure 4-11: Share of U.S. Retail Sales by Animal Type and Category: Pet Supplements vs. Nutraceutical Treats, 2007 (percent)
Figure 4-12: Form of Horse Supplements Usually Used
Hay and Pasture: The Basics are Back
Hay Production
U.S. Hay Harvest and Production, 2008
Many Middlemen Involved
What else is known about Hay?
What stable hay prices mean for equine feed companies
Beyond 2009
Feed Stagnant, At Least for Now
Chapter 5: Equine Health Products and Companies
Table 5-1: Post-Merger Sales, Based Upon 2008 Sales (in $ millions)
Pre-and Post-Merger Market Shares
Figure 5-1: Pre-Merger Worldwide Market Shares
Figure 5-2: Post-Merger WW Market Shares
The New #1, Worldwide: Merck
The Merger
Merial: Steady Sales and Salesforce Structure
Steady sales growth
Salesforce Overlap
Animal Care Just a Small Portion of Merck Business
Figure 5-3: Merck Revenues, Post Merger
Merial's Rabies Vaccine # 1 Worldwide
Consistently Steady Sales Growth
Table 5-2: Merial Sales Growth (in $ billions)
Figure 5-4: Merial Sales Growth (in $ billions)
UlcerGard and GastroGard
Over 90% of racehorses have Gastric Ulcers
Despite education, horse owners are not that concerned with Equine Ulcers!
Unpublicized Facts about Equine Ulcers
Free Scoping to Market UlcerGard
More Merial Marketing
Selling Prevention instead of a Cure
UlcerGard Ad Campaign: Stay on Guard
Non-prescription Competition for Ulcer Prevention
Antacids
Herbs Heal Ulcers
Generic Omeprazole
Alfalfa hay: Simple and Inexpensive Ulcer Protection
Figure 5-5: How Buffering Capacity of Alfalfa Hay Helps Reduce and Prevent Gastric Ulcers
New Fecal Blood Test Now Available to diagnose ulcers
Equioxx: Merial's Breakthrough in Equine Pain Relief
Why Does Equioxx Work without Causing Ulcers?
Marketing Equioxx to AQHA Members who Train and Show
Injectible Equioxx Debut
Colic and GI Issues Number One Concern Among Horse Owners
Merial Vaccine Marketing to Vets
Merial's Zimecterin-brand Wormer # 1 Choice
Merial's Other Wormer Brands
Merial offers New Satisfaction Guarantee
But Renowned Parasite Experts Disagree
Intervet/Schering-Plough Animal Health: Worldwide Market Leader in Animal Health
Table 5-3: Growth Rates, by Company, 2007-2008
Intervet: Pioneer in Vaccines
Intervet: Pioneer in Customer Education
Banamine, #1 in Brand Awareness in Pain Relief
Safe Niche in Wormers, for now
Marketing
"We're For the Horse"
Over 50% of health-conscious horse owners administer their own vaccinations
Pfizer and Fort Dodge
Fort Dodge
Pfizer
The Brands
Fort Dodge: Brand Leader in Vaccines
West Nile Innovator # 1 West Nile Vaccine
Is West Nile Still A Serious Health Threat to Horses?
The Mosquito Shot and the AQHA
Worming Products Quest and Quest Plus
Marketing and Parasite Resistance
Dewormers are the Leading Health and Nutrition Product Purchased at Retail
Figure 5-6: Leading Equine Health and Nutrition Products Purchased at Retail, 2007
Brakes put on Deworming Market Growth
Rotation vs. Education
Competition from "Natural" Worming Products
DE: Hype or Serious threat to "profitable poisons"?
New Product Development
X-Pel Natural Wormer: The Future of Equine Parasite Control?
New Product from Turkey
Patent has expired on Duddingtonia flagrans
Fecal Egg Count: A home test in development?
New Zealand Company Launches Equine Fecal Egg Count Kit
Equimax: Effective and Safe
Marketing
Second-Tier Companies
Bayer: 8% of the Animal Health Market Worldwide
Novartis Animal Health: 6% market share in animal health
Novartis History
A New Class of Unique Wormers (AADs) Launched by Novartis
Other Companies of Note
Virbac S.A.
Figure 5-7: Virbac Sales Growth, 2005-2009E (in million Euros)
Central Garden and Pet
Background
CG&P Acquisitions
Farnam
Farnam, the #1 Brand (at retail) in OTC Horse Products
Sales are Currently Flat at CG&P
Pet Products Financials
Farnam Sales Increased, 2007-2008
Recognizable Brand Name, Website and click-thru Service
Farnam's Wormers
IverEase Discontinued Shortly After Launch
EquiAid is a Farnam Brand
Horse Health, another "Discount" brand
Quitt: Cures Wood Chewers?
Farnam Product Line, an array second to none
W. F. Young/Absorbine: A Heritage of Innovation Since 1892
Absorbine Today
Innovative Products Fuel Demand
Stall Safe Disinfecting System
Myoplast, the European Secret, is Out
Growth by Acquisition: Equine America
One Target Market: Aging Baby Boomers
Marketing to America's Future: Facebook and Horsegirl TV
Boehringer Ingelheim Vetmedica: Growth due to Swine not Equine
New "Joint Health Management Program" Launched April 2009
Surpass Acquired from IDEXX
Competing head to head with Merial's Equioxx
Limited Equine Product Line
The Middlemen: Veterinary Supply Companies
Table 5-4: Veterinary Supply Companies, Ranked by Revenues, 2008-2009
Butler Animal Health
Growth via Acquisition
#1 in Equine Supply
MWI is #2 in Sales
But #1 in Customer Service
A 12% average growth rate into 2009
MWI Revises 2009 Revenue Expectations
AHI of Westlake, TX, is Catching Up
2008 Sales Up but Disappointing in 2009
Looking for "Selective" Acquisitions to become Number One
What About Webster? #2 in Companion Animal Supply
Expansion and Growth through Acquisition
Milburn Equine is Devoted to Horses
Webster Financials, 33% higher for 4Q 2009
Results of the Acquisition
Specialized Sales Force
PVPL: The Only Veterinary-Owned Distributor
Why Do Equine Vets Need so much TLC?
Chapter 6: Equine Services
A $13 Billion Market
Figure 6-1: Equine Services, Shown as Shares of Total Market, 2009
Figure 6-2: Equine Health Services Shares
Veterinary Care
In the Top 10 Fastest Growing Professions
Figure 6-3: Salary Comparison, Veterinarians vs. Other Health care Professionals, 2008
Veterinarian Shortage Predicted
Table 6-1: Equine and Mixed Animal Veterinarians, 2006-2012
The AAEP
Equine Veterinarians: $2.3 billion in Direct Spending
The Role of the Equine Veterinarian
Table 6-2: The Veterinarian's Role
Table 6-3: Veterinary Expenditures, by Pet Type
Guarded Future
Products Bought Through Vets
Figure 6-4: Supplements/Medications Obtained from Your Veterinarian versus Other Retail Outlet
Marketing to Vets
Over 40% of horse owners rely on their vet for health information
Feed and Supplement marketers are not taking advantage of this phenomenon
Hoof Care
Improving Knowledge
Methods to improve your hoof-care knowledge
Table 6-4: Poll: "During the past 3 years, which of the following methods have you used to improve your hoof-care knowledge?"
Meet the Farriers
"Good Old" Backyard Horses can add up to a Billion dollars
Figure 6-5: Type of Horses Handled by Farriers
Barefoot vs. Shoes, a Hot Topic, even among Veterinarians
The Do-It-Yourself Craze Is Affecting the Equine Hoof Care Market
Barefoot year round
Table 6-5: Poll: "Excluding foals and brood mares, what percentage of horses that you provide hoof care for go barefoot year round?"
Costs of Routine Hoof Care
Figure 6-6: Charges for Hoof-Care Work, by Region
Marketing to and Through Farriers: A captive audience
Farnam and Farriers Secret
Full-time Farriers are a Valuable Marketing Opportunity
Footcare in an average day
Table 6-6: Poll: "How many horses do you provide footcare for in an average day?"
Future Farrier Facts
Dental Care
8,000 Equine Dentists in the U.S.
State Licensing for Equine Dentists
Cost of Dental Work
Dental Care is Becoming "Routine"
Table 6-7: Poll: "How often do you have your horse's teeth floated?"
Future Outlook for Equine Dental Care
Market Size Guesstimate
Other Health Services
Massage
Equinology
Equissage
Other Programs
Equine Acupuncture
Acupuncture Without Needles?
Equine Chiropractic
Training and Boarding
Figure 6-7: Amount Spent on Services in the Past 12 Months
Transportation: $3 billion and shrinking
Unregulated and Unaudited
Race Horses are no longer the Cash Cow for Transporters
Insurance
Mortality Insurance
Major Medical
Who Insures Their Horses?
Figure 6-8: Poll: "Do you buy insurance for your horse(s)?"
Pet Insurance: Part of Employee Compensation Packages
Markel and Equisure, Current Market Leaders
Figure 6-9: Markel Specialty Program Insurance, 2008 Gross Premium Volume ($230 million)
Equine Product Marketers offer Insurance
Pfizer's PreventiCare Program
Purina May be Next
Chapter 7: Future Outlook and Trends
Introduction
Unwanted Horses
The Unwanted Horse Coalition Releases its Survey Data
Survey of 128 Colorado Veterinarians
Wild Horses: 10,000 more than "acceptable" levels
How Does the BLM Work?
Slaughter
Pros and Cons to Slaughtering Horses
Some Consensus Among the Experts
Equine Slaughterhouses Return to the United States: Montana is First
On the brighter side of the unwanted horse and slaughter issues
Racetracks and the Thoroughbred Retirement Foundation Offer Solutions
Every Horse has an Owner. Every Owner Has a Responsibility
The Jockey Club Encourages Funding for Proper Retirement of Thoroughbred Horses with New Program
Companies Pitch In to Help
Horse Rescue Groups Offer Solutions
Even Elvis Presley is Helping Rescued Horses
FINALLY: No-Cost Gelding of Stallions Used For Breeding
Natural Horsemanship
Natural Equine Products
Who started this Revolution?
Parelli Natural Horsemanship is the Largest and Most Organized
Figure 7-1: Growth in Parelli "Savvy Club" Member Revenues, 2005-2008 (in $ millions)
Understanding the Revolution
Jessica Jahiel, PhD, the Voice Of Reason in the Equine Market
Senior Horses and Senior People
Table 7-1: Baby Boomers, by Age
Equestrian Communities: A Major Marketing Opportunity
The Economy
Horse Supply and Demand
There is Some Good News
Opportunities in repair of large-ticket items
Figure 7-2: New Horse Trailer Purchase Plans, Poll: "Will you purchase a new horse trailer in the next year?"
Horsemanship is a Lifestyle
A Market in Flux
