The optimism was palpable among the distributors and retailers attending the inaugural Aquatic Experience in suburban Chicago.
“I would say the aquatics industry is in the best state in at least the last 10 years,” said Gary Nocera, executive vice president of Deep Blue Professional, the aquatics arm of Royal Pet Supplies. “I mean the [pet] industry was running away from aquatics like a burning building.”
Aleck Brooks of San Francisco Bay Brand & Ocean Nutrition, a Newark, Calif., fish and reptile food distributor, is forecasting an aquatic industry growth spurt over the next three to four years.
“The downturn in 2008 affected everybody, from the retailers all the way up to the manufacturers,” Brooks recalled.
Downturn Opportunities in The Aquarium Hobby
While some independent retailers have shuttered their aquatic operations over the last few years, retailers with good business sense and practices are thriving. A few even launched their businesses at the height of the recession.
“I had my best years in 2007, 2008, 2009, 2010 and 2011,” said Patrick Donston, owner of Absolutely Fish, a 5,000-square-foot aquatic store in Clifton, N.J. “When the economy went into the dumper, what happened was bad-practicing businesses couldn’t survive.”
Also attending the trade and consumer show in mid-November was Les Wilson, co-founder of Cobalt Aquatics, an equipment and fish food distributor out of Rock Hill, S.C., and chairman of the World Pet Association’s Aquatic Experience subcommittee. Wilson was mostly unfazed by the Great Recession.
“We started Cobalt in May 2011, so it was right in the tail end or middle of the recession and people thought we were nuts, but we saw an opportunity,” he revealed.
Wilson, formerly with United Pet Group, sees smaller players jumping at opportunities in the aquatic market.
“The big guys are dropping some items that are very viable and very pertinent to the independent retailer, because the volume isn’t there for a global business,” Wilson said. “So little guys like us can come in, fill those voids and make a very good go of it as a small company.”
Royal Pet Supplies of Brentwood, N.Y., launched Deep Blue four years ago to supply “a lot of the niche product that was needed in the marketplace,” Nocera said. He compared Royal and Deep Blue to air traffic controllers.
Deep Blue, with 250 vendors, watches for what’s approaching, what doesn’t sell and what hobbyists are clamoring for.
“A lot of retailers were complaining about a lack of larger, more upscale, more adult-oriented product,” Nocera said. “So we now do a line of larger ornaments and resin rocks.”
New items include a series of World War II battleships and airplane ornaments based on vintage wreckage found in Truk Lagoon in the central Pacific. They can retail for more than $100 a piece.
Deep Blue has capitalized on other product gaps, including a line of 60 to 70 resin corals in natural colors and frag display tanks.
“We’ve taken frag tanks out of the basement and into living rooms,” Nocera said. “People just love the shorter, shallower tanks.”
Better Foods, Smaller Tanks
Another prime area for innovation is fish food. San Francisco Bay Brand & Ocean Nutrition has reformulated many of its selections to accommodate smaller tanks.
“It’s not only a big-fish hobby anymore,” Brooks said.
“We use very little gel binders in them now,” he said of the new diets. “It’s 97 percent digestible food, so it’s not going to create pollution in the tank as quick as it would with the older gelatin- or gel-based foods.”
Cobalt offers a line of foods containing probiotics—beneficial bacteria formulated to support digestion.
“We’re seeing a significant difference in the way the fish are growing and resisting disease because of those probiotics,” Wilson said.
“In a standard scalare angelfish you can see up to a 12 percent increase in growth rate from feeding the exact same food with or without probiotics, so it’s pretty significant,” he noted.
A New Breed of Aquarium Shop Owner
Not only are innovative products proliferating, so are independent aquatic retailers.
Several fish stores have opened in the New Jersey suburbs of New York City, Donston reported.
“You’re seeing these new, fresh stores, and I think they have a different mentality on things,” he said.
Donston, 49, said tech-savvy 20- and 30-somethings—”not anybody older than me”—are opening stores.
Besides his Absolutely Fish store, Donston operates a 5,000-squre-foot aquaculture facility housing 75 species of coral, 20 species of freshwater fish, tropical freshwater plants and macroalgaes.
The idea behind it, he said, is to keep up with the younger generation of aquatic enthusiasts and what they are looking for.
When it comes to Internet competition, Donston said brick-and-mortar store owners would be better served figuring out how to grab a slice of the e-market rather than kvetching about the business lost.
“The Internet in 2013 is not the same Internet that was around in 2005,” Donston said. “Amazon has really raised the bar.” He plans to install two Web-based kiosks in his store in January.
“You’ll be able to prebuy items in my store right from online,” Donston said. “You’re still going to get the in-store service.”
An estimated 14.3 million U.S. households raise freshwater fish and 1.8 million own saltwater fish, according to the American Pet Products Association’s 2013-2014 National Pet Owners Survey.
Both numbers are all-time highs, APPA reported.
But Mike Canning, president and CEO of the Pet Industry Joint Advisory Council, said advocacy is key if the aquatic industry is to thrive.
“It is incumbent upon those of us who enjoy being with animals to make sure our voices are heard,” Canning said.
Taking early steps is PIJAC’s Marine Ornamental Committee, which was formed in 2013 in response to the possible listing of 66 corals, clownfish and damselfish as endangered species. Aquatic industry leaders have raised $100,000 to fund the committee.
“Any successful listing of those organisms would [make] collection, trade and transportation of them illegal under the Lacey Act,” Canning said. “So if you were in that business, your business is lost.”
The clownfish listing alone would have major ramifications.
“Clownfish introduce tons of people to the hobby, and without those it would not be good for the industry,” Canning said.
The $100,000 is being spent on scientific research that will be forwarded to the National Oceanic and Atmospheric Administration, which determines which species are listed.
“Government leaders can only act on the information they are given,” Canning said. “NOAA seems interested in our data because the petitions were not founded on good science.”
The pet industry needs to keep such regulatory issues on the radar, he added.
“Animal groups have 10 and 20 paid, full-time people in each state working against our five people every day,” he said. “It’s a daunting challenge, but we’re going to do our best.”