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HSUS president and CEO Wayne Pacelle is an insanely busy guy, but for more than a year he’s increased his workload by getting up before dawn to work on his forthcoming book. The Humane Economy: How Innovators and Enlightened Consumers Are Transforming the Lives of Animals explores how an economic system based on animal exploitation is unsustainable, and documents the pioneers—in business, science, farming and more—who are doing things in a better way. Here, we talk to Pacelle about the book, and present an edited excerpt about several companies and entrepreneurs who have had a dramatic impact on how people acquire their pets.
The opening of your book is about your two adopted pets and how you acquired them. How close do you think we are to ending pet homelessness in the U.S.?
There’s still a ways to go, but there’s undeniable progress—with animal protection advocates helping to bring down euthanasia numbers from perhaps 15 million adoptable cats and dogs 40 years ago to fewer than 3 million today. Innovators, entrepreneurs, scientists, corporate actors and rescuers are getting us there, and in the book I tell the story of a few high-impact players who have delivered game-changing strategies.
You describe how PetSmart and Petco changed their model by adopting out animals from shelters instead of selling puppies and kittens from commercial breeders. What other companies have had the biggest impact on revolutionizing the way their industry operates and showing that a more humane path can also be profitable?
Whole Foods Market revolutionized the operations of grocery stores by making animal welfare a priority in its supply chain. Cirque du Soleil has transformed the circus industry by providing an electrifying and exciting alternative to wild animal acts. John Paul Mitchell Systems and Dr. Bronner’s were leaders in the beauty and personal care business by forswearing animal testing early on and showing the way. And now there’s a new generation of startups disrupting established businesses: Hampton Creek, the food industry’s fastest-growing startup ever, has developed an egg substitute that is “taking the animal out of the equation,” and Beyond Meat has developed a plant-based substitute to chicken using protein isolation techniques that produce entirely new textures.
If you could choose three people to read The Humane Economy, who would they be and why?
What’s amazing is that so many extraordinarily influential people are already on board, and they are featured in the book—Microsoft co-founders Bill Gates and Paul Allen, billionaire investor Carl Icahn, Google co-founder Sergey Brin, politicians such as Senator Cory Booker, National Institutes of Health director Francis Collins and others. Their involvement is thrilling to me. I would love to see Facebook founder Mark Zuckerberg read it. He’s set to become one of the biggest philanthropists in the world, and he’s already one of the most influential figures of the Information Age. I’d really like the president of China, Xi Jinping, to read it, given the magnitude of animal use in the world’s largest nation. And I’d like the new prime minister of Canada, Justin Trudeau, to read it, so that he can see that the seal hunt in Canada is an economic boondoggle. It’s the epitome of an antiquated and costly form of animal exploitation, and the day can’t come soon enough when the world will say “good riddance” to the whole bloody mess.
What role do shelter and rescue workers play in helping bring about a more humane economy?
Their work, by helping save lives and bring our communities closer to the day when we are not euthanizing animals for space, is a core element of the humane economy. When we can reach a higher standard in our treatment of pets, it will be natural for us to extend our compassion to other animals. I also believe people devoting their lives to the cause of protecting animals can provide a model for conscious living. When there is a base of consumers who are alert to animal welfare issues in the marketplace, you’ll see even more companies adopt practices to reflect that sentiment.
The backlash against SeaWorld after the Blackfish documentary was swift and severe. Do you think consumers can apply enough pressure that the company will finally retire its orcas?
Yes, it’s just a matter of time. Having orcas splashing consumers and doing tricks in small concrete pools is no longer a sustainable business model, and I think you’ll be hearing more about this soon. Who would have thought Ringling Bros. would end its use of traveling elephant acts—the part of the show so central to the brand? The company knew that ultimately it was sustaining brand damage by continuing with that form of animal exploitation. It decided, as SeaWorld will, that it’s better to control the transition to a new business approach than to have it imposed by lawmakers or by customers leaving in droves. The reaction to Blackfish was a great lesson to all businesses based on animal abuse: In the new economy, the only winning business model is a humane one.
Excerpted from The Humane Economy
I f you had asked me years ago where to get a dog, a pet store would not have been on my list. They were, in my long-held view, spruced-up, sanitized distribution outlets for cruel puppy mills, and a huge part of the problem for dogs in this country.
PetSmart and Petco were once the end sellers, the primary conduits for the puppy mill industry. But in the mid-1990s, both companies, growing rapidly by providing all manner of supplies to pet owners, made a strategic decision: They said “no” to puppy mills and shed the entire practice of selling dogs and cats. Instead, they threw open their doors to local rescue groups and shelters, giving them access to the foot traffic in their stores. PetSmart and Petco don’t make a dime on the adoption transactions—the fees go directly to the shelters and rescue groups. It was a new economic model for pet stores, centered on doing right for the animals and leveraging the emotional power of the adoption experience to earn and keep the loyalty of customers.
For both companies, the decision to make a clean break from the mills was good for the dogs and cats and also great for business. Partnering with shelters and rescues brought more people to their stores and built lots of community goodwill. On the day we met our dog Lily, my wife Lisa and I set the navigation system for PetSmart with the sole purpose of finding a new companion. Even if we hadn’t come home with a dog, we’d have left the store feeling very grateful for its adoption programs. And whether you take home a cat or a dog—or now, even a rabbit—at Petco or PetSmart, you can’t turn in any direction without seeing supplies everywhere: kennels, leashes and collars; beds, sweaters, heating pads, and boots; food and water dishes, pet food, and treats; wee-wee pads and flushable cat litter; doggie seat belts, life preservers, and Doggles (goggles for dogs); scratch pads; and toys—lots of toys. PetSmart reports that people who adopt from the store—euphoric in claiming their new family member and perhaps eager to wipe away any past troubles or discomforts the animal may have known—spend five times as much at the store as regular customers. That’s some multiplier effect. And it doesn’t end with a single shopping spree. Lisa and I love returning to that PetSmart store because it reminds us where Lily started her new life, and first brought such happiness into ours.
PetSmart’s and Petco’s adoption programs have been successful beyond anyone’s expectations. They are each adding dozens of stores a year, and between them now have more than 2,500 outlets. Their main competition, apart from each other, isn’t coming from the small pet stores any longer, but from the big-box stores. Banfield Pet Hospitals has co-located 800 veterinary clinics—employing 5,000 veterinarians—right inside the PetSmart stores. Total sales within the US pet sector are about $60 billion. In December 2014, as a sign of the times, BC Partners, a London-based firm, acquired PetSmart for $8.7 billion in the largest global private equity deal of the year. That’s right: the biggest private equity acquisition in all of 2014 was not a company involved in finance, energy, pharmaceuticals, or mining, but pet products.
The in-store adoption program for the two pet supply giants has been transformative for the humane movement. With their shelter and rescue partners providing the animals, PetSmart and Petco have helped to transfer more than eleven million dogs and cats into loving homes—a game-changing number. They add more than half a million to that total every year. And imagine if those 2,500 stores had been selling puppy mill dogs for these last two decades? Not only would the companies have not contributed millions of dogs to the adoption pipeline, but they would have sold millions of puppies from mills instead, creating havoc for shelters and profits for mills. By doing something good in place of something bad, they’ve attacked the problem on a scale that is game-changing for the cause.
Looking back, it may seem like an obvious marketing boon for these companies to pursue dog and cat adoptions exclusively. But the decisions of PetSmart and Petco were revolutionary at the time and disrupted the conventional pet store model. It required them to forego live sales of dogs and cats—the animals at the very center of their enterprise and a prime lure for customers. The live sales were no loss leader, even as a once-in-a-lifetime transaction, because the stores made a hefty profit on each dog sold—at prices often reaching $1,000 or more.
By cutting ties with the puppy mill industry, and offering help to animals in need of homes, PetSmart and Petco became problem solvers, not problem makers, in relation to animal homelessness. Pet lovers are right to feel good about these companies, and all that customer loyalty is well-deserved.
Right around the same time that PetSmart and Petco switched their model—providing thousands of outlets for adoption of homeless animals—humane innovators developed another business idea. It would prove every bit as game-changing in the world of animal sheltering. To put it in basic terms of supply and demand, shelters and rescues had an oversupply of goods (homeless dogs and cats) but not the right mix of goods for would-be pet owners (dogs of different sizes and breeds, and cats of different colors). Some urban shelters were overloaded with pit bull–type dogs, while southwestern shelters had too many Chihuahuas, and southern shelters had lots of hounds. The inventory (pets of every shape and size) was there, just not in the right places.
That’s where two forward-looking people came into the picture. On New Year’s Eve, 1995, Betsy Banks Saul, then an urban forester, and Jared Saul, a medical resident, were on their way to dinner, talking about the challenges of pet adoption. They’d also been discussing a cool new thing called the World Wide Web. What if the Web could solve the pet–shelter allocation problem? By midnight, Betsy and Jared made a New Year’s resolution to start a new website that would aggregate information from shelters and rescues and put it all online.
Betsy and Jared launched Petfinder just months later. They initially called various New Jersey rescue and shelter groups, which, after some raised eyebrows and skepticism that comes with an out-of-the-box idea, would snail-mail or fax them pictures and information on adoptable and needy dogs and cats to upload to the website. In short order, participating shelters emptied out their inventory of animals, and the field of sheltering would never be the same. It also had the effect of galvanizing caring people—often with a particular interest in a breed or a region but no knowledge that so many Chihuahuas or beagles were in need—to form rescue and fostering groups. Petfinder.com’s popularity quickly outgrew this model, and within two years Betsy and Jared took it national. Today, about 12,000 shelters and rescues upload photos and information—with more than 250,000 animals pictured on the site at any one time—as a way of creating a massive virtual kennel for would-be pet parents. By using the search function, people can locate almost any dog or cat of their liking in their area—finding even the most obscure breeds, and allowing them to skip the step of going to a shelter and coming up empty because of a limited selection. Since it went online, Petfinder.com has done for adoption what Match.com and eHarmony did for dating—allowing suitors to assess key criteria and zero in on the most suitable prospects (the difference is, with adoption, it’s a lifetime commitment).
After research on Petfinder.com, your next step in adopting is the face-to-snout encounter, allowing you to get the feel of a wet nose or hear a welcome meow. In two decades, Petfinder.com has made possible more than twenty-two million pet adoptions—twice the number of dogs and cats adopted out through PetSmart and Petco. The site now even has adoption information for rabbits, parrots, reptiles, and all the other creatures large and small that shelters and rescues now welcome. It’s now becoming broadly disruptive to the other sectors of the pet trade, which have their own ghastly mills for birds, rabbits, hamsters, and other animals.
Through a combination of online promotions pioneered by Petfinder.com, use of a PetSmart in-store adoption program, and the creative and dedicated work of Lost Dog and Cat Rescue, our dog Lily became an adoption success rather than a euthanasia statistic. She was cared for and taken in instead of discarded and forgotten. The goal of everyone involved is to replicate this outcome over and over, so that shelters don’t face the horrible task of killing healthy animals for lack of space or money. So many good and resourceful people today are striving to achieve that goal. They’re running high-volume spay-and-neuter clinics, lobbying to secure public funding for sterilization and bans on pet stores selling puppy mill dogs, and transporting animals from overloaded shelters to high-adoption regions. They’re assisting people and their pets in disadvantaged neighborhoods, developing best practices in the field, and advertising to knock down stereotypes about shelter dogs. They’re conducting trap-neuter-return programs for community cats as an alternative to sheltering and euthanizing them and even more.
PetSmart and Petco are mixed breeds when it comes to tackling animal homelessness, part for-profit entities and part charitable enterprises. PetSmart Charities has become the biggest foundation for animals, and the Petco Foundation isn’t far behind—collectively, they give $70 million every year to programs and other charities to help dogs and cats. Their revenue-generating strategy is simple and effective: asking PetSmart and Petco customers to round up their purchase to help animals. When millions of their customers make small contributions, they add up in a hurry. And that charitable giving is all hitched to the success of PetSmart and Petco as part of the new, humane economy.