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Gazing into the Crystal Ball

Insiders look at the future of the aquatics industry.
By David Lass

To learn the condition of the aquatics business today, we called a few manufacturers, retailers and distributors in this segment of the pet industry. The conversations focused on the good aspects of the business, some of the problems the industry is encountering and what the future might bring.

Manufacturers

Matthew Zadravec
managing director for Sera USA

Zadravec assumed the leadership of Sera in the United States last spring.

“I see quite a difference between Europe and the U.S.,” he said. “The marine side of the hobby is much larger in the U.S. as compared to Europe, but planted aquariums are a more important part of the business in Europe.”

Zadravec also pointed out that living spaces are larger here, plus there are many more affluent consumers.

“The professional installation and maintenance business is very important here, while the small hobbyists are more numerous in Europe,” he said,

The biggest challenge that Zadravec sees in the industry comes from the Internet.

“The Internet pretty much destroys the interface between the professionals and the hobbyists,” he said. “Independent stores are having a difficult time competing with the prices for product offered on the Internet.”

When it comes to the future of the aquatics business, he sees paths to success.

“The chain stores are bigger and stronger than the independents, but if stores [independents] become specialists in one aspect of the business—say reefs, or planted aquariums—they can do very well,” he said.

Damian Hall
marketing communications manager, Rolf C. Hagen (USA) Corp.

“The state of the industry is good,” Hall said. “Aquariums as furniture are an important direction in which we see the industry going. Hobbyists want their tanks to look good and fit into their décor.”

When it comes to problems with aquatics, Hall cited one thing that seems to be seen by the entire industry.

“Beginners being able to keep their first tank alive is still a problem that no one seems to have been able to really solve,” Hall said. “We include information with all of our products, and we have a large website. But getting kids to succeed starting in the hobby, as important as it is, still is a problem.”

Hall believes that service to customers has to remain the main theme for the future.

“All good manufacturers have to have dedicated departments specifically for dealing with problems of both the hobbyists and retailers,” he said.

Paul Guippone
sales and marketing director, Mars Fishcare

“Salt water, although still a small part of the hobby, is outpacing growth of fresh water due to the fact that technological advancements are making it easier to get into and succeed in the hobby,” Guippone said.

He also had comments on the future of the industry regarding the Internet.

“Consumers are shopping more on the Internet, and this is only a problem when pricing over the Internet is too low and devalues brands,” he said.

But Guippone feels that there is also a positive side.

“The Internet increases convenience, allows consumers to buy bulk and shop around for deals,” he said. “It also opens the window to the possibility of more information out there for potential hobbyists to try fishkeeping and to be successful.”

John Fox
director of brand building and development, United Pet Group

Fox also sees the marine side of the hobby as being strong.

“Manufacturers are responding to the marine hobbyists’ desire to have easier to use, set up and maintain aquariums, and we are seeing complete lines of aquariums and equipment designed specifically to work together for marine and reef systems,” he said.

Fox also sees some problems the industry faces.

“Consumers have consistently voiced their concern with the maintenance of an aquarium and keeping fish successfully, and manufacturers have worked hard to offer products and services to eliminate the frustration associated with aquarium maintenance,” he said.

As for the future, Fox sees consumer confidence in manufacturers’ claims—in all industries—continuing to decline.

“They are going to the web for validation, sharing and referrals from friends, peers, clubs and word of mouth,” he added. 
 
Retailers

Allen Fefferman
owner, Old Orchard Aquarium, Skokie, Ill.

“What got us here simply isn’t going to do it in the future,” Fefferman said. “We need to make sure that this hobby is fun. Folks should want to come into their local fish store and enjoy the experience of shopping and of the hobby in general.”

Fefferman is very clear on his views on the Internet.

“The Internet has taken away our ability to compete on the basis of price, but it forces us to reinvent ourselves or to go out of business as quite a few Chicago area stores have done,” he said. “We simply concentrate on offering excellent livestock and customer service. I’m positioning my business to take advantage of the next wave.”

Looking at the future of the business, Fefferman said there is a tremendous opportunity for the local independent to take advantage of the folks who get out of the hobby and sell their tanks.

“While none of us likes to see tanks not being used, there are many large used tanks on Craig’s List and the like,” he said. “We see this as a great opportunity to provide the rest of the equipment, the expertise and the livestock.”

Fefferman also finds that the trend toward huge aquarium stores, where the exhibits sometimes rival public aquariums, very positive.

“These large new superstores represent tremendous investments of capital, and they are forecasting a bright future,” he said.

Bill Wymard
director of operations, Aquarium Adventure, Ohio, Illinois and New York

Wymard is one of the founders of a company that has five superstores in Ohio, Illinois and New York.

“The aquatics business has been very good for us, but we are marketing it correctly,” he said. “We emphasize that aquariums are a life-style, not so much a hobby anymore. We simply convey that the aquarium is just as important as the computer, iPod or cell phone.”

Aquarium Adventure has clearly been successful in its efforts. Columbus Monthly named the business One of the Area’s 10 Most Peaceful Places.

“We look to create our own new customers and to keep them successful with their aquariums,” Wymard said when asked about the Internet as a threat to business. “We need to teach folks that it is easy to keep fish. To do this, we spend lots of time with them, especially the newbies, and we provide them with lots of good information.”

In general, his attitude about the competition is to make his operations places where customers will want to come and spend their time—and their money.

“Our future is integrally tied to our ability to help our customers keep their fish happy and healthy, and as an important element of their lifestyle,” Wymard said.

Steve Richmond
owner, Lovely Pets, Quincy, Mass.

Richmond always has a wide selection of fish, both freshwater and saltwater, and he and his staff are dedicated to making folks successful in keeping fish.

“Reef keeping is a huge portion of our business,” Richmond said. “It is really nice to see young people getting back into the hobby. This is one positive thing that the Internet and the big-box stores have done. They are getting lots of folks started in the hobby.”

But he said pricing on the Internet is one of the worst problems with the business today.

“Manufacturers really have to do something about this,” Richmond said. “When we see a price advertised on the web for less than we can buy the product for wholesale, something is really wrong.”

Richmond acknowledged that the business is changing.

“The distribution methods today are completely different from what they were two or three years ago,” he said. “Who knows what it will be like two or three years from now?”

Roger DeGregori
president, The Fish Gallery, Houston and Dallas


DeGregori’s stores are 10,000 and 7,500 square feet, dedicated to fish only.

“The retail business is changing,” he said. “And while the economy is playing into things, the professionally run stores will be the survivors. The small mom-and-pop fish stores have pretty much been driven out of the business.”

DeGregori’s attitude toward the business is epitomized by The Fish Gallery’s warranty on fish.

“We only sell fish that have been conditioned and are fully ready for sale,” he said. “We can’t be responsible for what folks do once the fish leaves our store. We offer no warranty.”

As for the Internet, he said it’s bad for the brick-and-mortar stores.

“The problems with the pricing on dry goods, especially high-end items, is something we just can’t do anything about,” he said. “When it comes to livestock, I truly believe that the Internet is never going to replace the face-to-face interaction between the store and the hobbyist.”

Rick Brenner
Jack’s Aquarium and Pets, chain of stores in Ohio


Brenner sees good things happening on the marine side of the hobby.

“MAC-certified marine fish have helped,” Brenner said. “And compact fluorescent and T5 lighting, along with easier-to-use protein skimmers, are becoming more popular.”

The main problems he sees are fewer people coming into the fish hobby and the high dropout rate of new hobbyists.

Unlike most other retailers, Brenner thinks the Internet is a positive factor.

“The Internet has made it much easier for customers to get up-to-date information,” he said. “This is another source of competition for brick-and-mortar stores, but overall I think it is good for the industry and the future fish hobbyists our industry needs to cultivate to grow.”

Distributors

Arie DeZwart
president, Ruinemans Aquarium, Miami

DeZwart is the managing partner of Ruinemans in Miami. Before that he was in Europe at the world headquarters for Ruinemans in Monfoort, Holland.

“Europe is way ahead of the United States in just about everything having to do with fish,” DeZwart said. “The retail business is centered around small independents, but it is driven by large garden centers that offer everything having to do with fish—freshwater, marines, ponds and planted aquariums.”

He believes one other difference has to do with the way that people look at staff.

“The retail fish business is considered a profession in Europe, not just something that high school kids do after school.” DeZwart said. “And the best fish people aren’t necessarily the best business people.”

According to DeZwart, the direction of the retail business does seem to be with the huge superstores.

“People want to walk in and say ‘Wow!’ he said. “The large specialty store is going to be the only one that can compete with the big-box chain stores.”

When it comes to the future of the wild-caught fish, DeZwart finds that the ornamental fish industry often gets blamed for damage done to the environment by other much larger industries.

“In South America, where I have been working for many years, the timber and mining industries are the ones doing almost all of the damage, but the ornamental fishing industry is the easiest to blame,” he said.

Gary Nocera
executive vice president, Royal Pet Supplies


As a large dry goods distributor, Nocera said that his company and others like it have the perspective of the air traffic controller.

“We see the big picture and we watch what is happening in the industry,” he said. “Aquatics seem to be very dependent on the general U.S. economy, and there clearly are problems ahead. Also there is just so much competing for a kid’s time and attention.”

Nocera thinks that the industry is doing a less than ideal job of promoting aquariums to the buying public, even though there is so much interest on the Internet. He would like to see the industry as a whole do a national promotional campaign.

“The industry needs to refocus on the 40- to 50-year-old, mostly male, segment of the market,” he said. “These folks have the time, and the money, and many of them had tanks as kids. We need to get to this core audience to get their kids started with an aquarium, just like when they were kids.”

He would like to see an ad campaign in national magazines that target this market.

“The industry needs to get together to promote the hobby, and then the retailer has to be able to close the sale once they are in the store,” he said. <HOME>


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Gazing into the Crystal Ball

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Reader Comments
If you want to stay in business then dog and cat is where the demand is right now The fish hobby is no longer the draw that it used to be. Distributers must also have a high fill rate because customers are only buying what they need. A major distributer in the northeast must have a closer relationship with their customers or they will find themselves out of business and a Ivy league education won't help if you don't even know what the customer expects from a distributor.
Chet, Long Island, NY
Posted: 1/16/2010 6:54:20 AM
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