Aquatics Industry: Why It's Thriving and Where It's Headed in 2021 - PetProductNews.com

Posted: 01 Jan 2021 06:00 AM PST

Participants:

Arthur Frayler, co-owner of Aquatropics in Gainesville, Fla.

Brian Robinhorst, owner of Reptile Emporium & Aquatic Center in Highland, Ind.

Jim Seidewand, owner of Pet World and the Aqua Shoppe in Rochester, N.Y., and board member of the Pet Industry Joint Advisory Council (PIJAC)

Marcie Rivera, vice president of Wet Spot Tropical Fish in Portland, Ore.

Pet Product News: Business life in 2020 was characterized by the coronavirus. How did this impact your business, and what were the pandemic's effects on the wider aquatics industry?

Arthur Frayler: 2020 was definitely an interesting year, but as important as it is, I try not to define it as the year of coronavirus. In many ways, we were affected by COVID. However, for the aquatics industry as a whole, it gave a lot of people more time at home, and people have been loving their tanks.

Early on, keeping the store's doors open was a lot more labor intensive, as we had to adapt to curbside pickup, deliveries and other restrictions. However … business has started to return back to "normal" as everyone gets used to new cleaning procedures, social distancing and masks.

Of course, there has been a hiccup in supply, at times both wet and dry. I say this lightly though, because I understand where the lack of supply stems from.

On the dry side, manufacturing has fallen a bit behind with COVID, though they have picked up again. Getting items shipped at the same rate [as before the pandemic hit] just isn't happening yet.

On the wet side, our suppliers have been doing an outstanding job getting fish where they can, and I have seen improvement [later in 2020]. All in all, I think the aquatics industry will be continuing on strong moving forward. We just have to be positive and patient at times, understanding that it has been a crazy ride in 2020.

Brian Robinhorst: Like every segment of the economy, the pandemic has affected our business. With the election, I see people panicking and getting crazy about things, and when that happens, people hang on to their money because they don't know if they're going to have a job or there's going to be a riot or there are going to be other problems.

A lot of things are on hold right now. Opening a new [retail location] right now in this kind of environment is very questionable. Some people can do it and can pull it off. I'm not saying it isn't possible, but it's a risk. It might not be best to wait until we get a vaccine, conditions stabilize and things become more predictable. Nobody knows what's going to happen next week. The pandemic is killing so many industries. That's going to have a trickledown effect.

Jim Seidewand: The first challenge was to be designated as an essential business. We filed our own paperwork for that, but give [the Pet Industry Joint Advisory Council] PIJAC all the credit for a strong national push for [pet] stores to be labeled essential. Many of us may owe our store's survival to that quick work by PIJAC.

We immediately transitioned to limited hours and reduced sales while we grappled with how to be open and safe at the same time. Sales were lower for several weeks, followed by a boom in sales as we slowly added back hours.

Our staff was supportive throughout. But distributors and manufacturers struggled to keep staff working, and product supplies have been challenging ever since.

Marcie Rivera: We had to adjust our business model to include safety precautions, such as decreasing the number of customers allowed in the store at one time, having masks and hand sanitizer on hand for customer use, and the installation of acrylic shields at the checkout station.

Another hurdle we had to navigate was finding employees. Many of our employees self-quarantined, and the employee pool outside was limited due to people making more on unemployment than working.

But despite these challenges, we have come out on the other side; sales have increased, and we have a great staff. People in the Northwest are very loyal and love to shop local, so we are very lucky.

PPN: What's the role of livestock sales in your business model? How has that changed in the recent past, and how do you think it will continue to change in the future?

Frayler: Livestock has always been a large part of our business, and I would say for most fish stores that holds true. Honestly, nothing changed for us last year, nor do we plan on changing that moving forward. We have also always carried a wide variety of dry goods and try to keep our shelves full for people needing both wet and dry supply.

Robinhorst: Because I'm a breeder, livestock availability … doesn't affect me too much. In the future, it depends on how we in the industry cooperate and fight to mitigate the unnecessary and over-reactive bans [on livestock importations and sales]. I'm definitely about protecting aquatic species and conservation, but I'm not unrealistic about it either. We tend to have knee-jerk reactions in this country when it comes to litigation.

Seidewand: Fish have always been our specialty, and being a good fish store requires a great selection of fish and specialized products. I see this as even more necessary going forward to differentiate our store from more generic pet operations that focus on pet foods and to draw customers to a physical store in the new online world. But other animal sales are also strong, particularly ferrets and birds also [are] becoming stronger.

Retailing livestock is labor intensive, but I see it as the differentiator in making independents unique. … Asian airfreight dried up, and we had to shift from Far East fish buying to domestic sources in Florida. Selection and pricing were challenging, but overall, sales remain at record levels.

Rivera: The issues with some livestock availability had a slight impact on our sales. But we have a wonderful distributor that has managed to acquire many species no other distributor has. Because of this, the impact of not having certain species was limited. As long as other countries and the U.S. do not shut down, we should be able to continue getting lots of fish.

PPN: What trends do you see developing in the aquarium hobby and the industry as a whole? What are people interested in?

Frayler: Right now, I see a mixture of everything. Over the last few months, I have sold just as many reef systems as I have planted tanks and cichlid setups. For a while now though, it has been really fun to watch interest in planted aquascapes grow. What people are doing with these tanks is incredible. We are in a college town and tend to see what people can do with nano tanks. There has been a lot of demand for fancy shrimp, guppies, killifish, BB puffers and smaller, nano-appropriate species.

Robinhorst: I think the aquatics segment will continue to experience a boost. We haven't done poorly in 2020. People are locked in their homes, and that's not going to change until we get a vaccine and a return to some semblance of normalcy. I expect more people will enter the hobby, simply because this [pandemic] is not going away anytime soon. It could be years before this is mitigated and managed properly.

Seidewand: Interest in reefkeeping remains strong. Nano tanks, both fresh and marine, are popular and adding new places customers can keep fish with minimal maintenance. Aquatic plant sales have been growing strongly; natural-looking environments are very popular again. OK, there is also that GloFish craze on the other extreme adding new customers with different tastes, and they continue strong as they add new varieties.

Rivera: In Portland, we are seeing the continuing trend toward smaller planted tanks. We are also seeing a trend in using houseplants immersed inside aquariums, which also helps with the water quality. The other trend we are seeing is the use of carnivorous plants in bog terrariums.

PPN: Is your shop offering maintenance services, and, if so, what role does it play in your business overall? Are maintenance services growing, declining or staying the same?

Frayler: Our shop is offering service, and for us it really started [in 2020] and by no means was initiated due to the virus. That being said, over the last [several] months we have seen a rise in new setup bookings as well as requests for tank moving, as people move in and out of town.

Robinhorst: We don't offer maintenance services. We used to, and we have a few accounts, but we moved away from it. That decision predates the pandemic for us. I have to pick my battles. If you want something done right, you do it yourself. I'm not about hiring people to do maintenance, and then I'm having to follow behind them and do their job for them. I need to be there. I need to make sure it's done right.

Seidewand: We don't offer maintenance services directly.

Rivera: We do offer aquarium maintenance. Although it is only a small portion of our business, we did notice a decrease when we went into lockdown. However, it has since rebounded. I think customers are still a bit apprehensive about having someone come into their space.

PPN: Availability of dry goods—for example, the 2020 glass shortage—continues to be a challenge for many in the aquatics industry. How has this impacted you, and what do you for think is likely to happen in 2021?

Frayler: Dry goods took us on an interesting ride in 2020. I understand where some of the shortages stem from. Specifically talking about glass, we took it upon ourselves to stock up as heavily as we could knowing that the waves between restock were going to take longer than usual.

Right now, I am seeing a large amount of glass coming in consistently for tanks up to 90 gallons. Anything larger is the short-term issue we have as an industry. Going into 2021, the world will be more adjusted to what has happened, and manufacturing should start to pick up, getting these larger tanks back into circulation. I cannot stress enough: We all have to stay positive and work with our suppliers moving forward.

Robinhorst: I see a lot of problems in the supply chain. I know this is partially due to the pandemic, but I think part of it came about because of a certain amount of panic among distributors. … The glass shortage in 2020 definitely had a big impact on the industry. It's loosened up a little bit, but then again, if we see another round of shutdowns, I think that could become a problem very easily.

It hasn't even resolved itself fully. There is some stock to be had, but manufacturers need to meet demand. If not, they're going to run themselves right out of business.

Seidewand: It's surprising, because sales have been strong while we struggle to keep inventory on the shelves. We've raised stock levels where we can get products to compensate, which then deepens the supply chain shortages. But glass tanks, covers and stands remain a huge problem. Hopefully, the supply chain will adjust over the next year and business levels will find their new normal.

Rivera: The glass shortage has impacted us. People are still social distancing and staying at home more, so they want to set up an aquarium, but there are no regular tanks to be had. Luckily, there are other tank manufacturers that are still supplying different sizes of tanks, both with a frame and rimless. We are starting to see back orders being shipped. I am optimistic this will continue and we will once again have the inventory we need.

PPN: If you were to make a prediction about the future of the aquarium hobby, what would it be? What about the aquatics industry, and independent aquatics retailers, in particular? How will business models, customer bases and growth prospects change in 2021 and beyond?

Frayler: If I had to make a prediction leading into 2021, I would say our industry will show steady growth as it has been for some time now. As people continue to work at home, or have to come home after a shift and de-stress, fish tanks provide that clarity people are looking for. It's amazing where we are now as an industry and what we are able to do to give these fish amazing homes. It is crucial we all stay positive [and] healthy, and work with each other to better ourselves going into 2021.

Robinhorst: I'm anticipating growth in 2021. I'm an optimist, or I wouldn't be where I'm at. I think things are going to do well. Business is already good, as far as the [aquatics] industry is concerned. A lot of other industries are dying. We've been very lucky, in many respects. This industry seems to be chugging along pretty well.

There are bumps in the road, such as the glass shortage or problems with dry goods and supplies, but it's not the end of the world.

Seidewand: In my 50 years retailing aquatics, we always grew sales when the economy slowed and people didn't travel and stayed home, giving them time and attention for hobbies, such as fishkeeping. The pandemic may be an extreme version of this, with people never quite returning to doing as much travel or even leaving the home as often. I forecast a continued higher level of business and new opportunities. A continuing problem will be defending the retailer's right to sell live animals and the right of consumers to possess them.

Rivera: I predict that the hobby will continue to grow despite the challenges of acquiring livestock and certain dry goods. People are enjoying their time at home and willing to spend money on their hobby. Independent stores have a great advantage in that they can offer personalized service, and they should capitalize on this as much as they can. I see the aquatics business continuing on an upward trend.

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