Canada: Equine Equipment Industry

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Canada: Equine Equipment Industry

Crystal Roberts Kari Lavoie August 10 Summary The equine equipment market in Canada is complex. The nation has a proud history in the equine industry in the competitive, international rodeo and show jumping circuits. Each of these sports requires different types of equipment, or tack. Business opportunities for American exports include custom and mass market saddles, bridles, harnesses, show ring equipment, dressage saddles, and custom blankets and boots. Market Overview and Trends There is a market for equine equipment in Canada as the country has historical ties to the frontier spirit, especially in the Prairie Provinces. Canada maintains its colonial status with England, represented by the world class show jumpers in various international events. According to the Winter 2009 edition of the Canada First Newsletter, the Canadian equine industry is estimated at $12.5 billion per year, of which $2.6 billion is generated by horse racing. Equine Canada, the national body that represents Canadian equestrian sports, predicts growth in the equine sector. There are significant opportunities for U.S. providers of feed and veterinary services, saddlery and other horse-related equipment The competitive horse and rodeo circuits are not the only market for equine equipment. In 2006, 6.6 % of the farms in Canada were dedicated to horse and other equine production, according to Statistics Canada. This is an increase of 2.1 % from 2001. In Alberta, while the total number of farms declined between 2001 and 2006, the number of farms dedicated to horse and other equine production increased 3.3 %. The Hobby farm industry is also growing in the Prairie Provinces, with more people choosing to operate small acreages with some agriculture and livestock. This market includes those who have one or two horses that are used for personal riding. Small trail ride businesses that may have multiple horses but operate in a niche situation are also covered by this category. According to a report published by Statistics Canada, there has been an increase in the number of people operating Hobby farms. These are smaller farms that are not a main source of income, but still maintain livestock, mostly for pleasure purposes. This coincides with an article published on Horse-Canada.com, describing that while the number of large farms are disappearing, there is a steady rise in the number of small farms and an increase in horses and horse owners. Though price became more of a factor during the recession, there are riders willing to pay higher prices for premium, well-made and safe tack for themselves and their animals. This stems from the humanization and premiumization of pets, and will continue to drive industry

Canada Equine Equipment Market July 2010

growth well into the future. Many Canadian horse owners want products and services for their animals that are not only safer and high quality, but are also distinctive. According to the American Quarter Horse Association (AQHA), the number of Quarter Horses in Alberta was 106,639, up from the previous year by .42 %. It should be noted that this represents only a small portion of the horses in Alberta, the registered Quarter Horses.

Canadian Population

Alberta British Columbia Manitoba New Brunswick Newfoundland Northwest Territory Nova Scotia Ontario Prince Edward Island Quebec Saskatchewan Yukon

Horse Population Change from 2009 Previous Year 106,639 450 25,811 -219 22,621 45 1,530 -23 62 0 8 -2 2,156 6 24,748 -66 498 -2 12,771 -157 43,252 778 88 -5

Total Canadian Population

240,184

805

The AQHA also notes that Alberta is ranked in the top 5 states and provinces for ownership of Quarter Horses.

Top Five American Quarter Horse States/Provinces 1. Texas 2. Oklahoma 3. California 4. Missouri

5. Alberta

461,054 188,381 136,583 107,630

106,639

According to Statistics Canada, the overall number of farms with horses has increased over the last few years, despite the fact that most other livestock sectors have decreased. Between 2001 and 2006, the number of farms decreased in Alberta by 7.9%, but those farms listed as Horse and other Equine Production increased by 3.3%. In the 2008-2009 Annual Report for the 4H Clubs of Canada, horse projects are second only to beef projects for club members across Canada. As shown in the following graph, Horse and Light Horse projects are especially popular in the Prairie Provinces.

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Canada Equine Equipment Market July 2010

6000 5000 BEEF 4000

HORSE DAIRY

3000

SELF DETERMINED 2000

LIGHT HORSE SHEEP

1000

Others Total

0 BC

AB

SK MB ON QC NB NS PEI NL

This information indicates that there is a definite next generation market for equine equipment, as horse and light horse projects involve participants choosing a weanling and caring for it until it is two years of age. The participant is responsible for the care and training of the animal to the riding stage. The graph also demonstrates that there is a growing market outside the Prairie Provinces, in Ontario. Marketing Company reputation and brand integrity are key decision making factors for Canadians when purchasing equine equipment. There are quite a few distributors of equine equipment in Canada. A business looking to enter this market would more likely be successful if it were to offer something to a niche market. Custom made equipment that is custom fitted is in demand. According to Horse-Canada.com, there is only one Canadian company that offers customtailored riding habits for English riding and jumping. This same site offers a listing of equine equipment resources. Weblinks for any U.S. business looking to enter the equine equipment arena should appear on resource lists including Horse-Canada.com and Equine Canada. Event sponsorship is an excellent way to break into the equine equipment market in Canada. With numerous small and large rodeos throughout the Prairie Provinces, as well as international show jumping competitions in Calgary at Spruce Meadows, there are ample event sponsorship opportunities. Rodeos and show jumping competitions also offer the opportunity for associated trade shows. The Calgary Stampede has a large trade show on the grounds for the duration of the rodeo. These trade shows allow an equine equipment supplier to direct market their items to clients. This is especially good for those suppliers of specialty tack and custom fitted gear. There is also a thriving horse racing industry in most parts of Canada, most notably in Ontario. One of the premier racing events, The Queen’s Plate, is run at Woodbine Racetrack. It is part of an international Triple Crown Event that is attended by thousands every year. More information can be found on the track and it’s events at Horseracingcanada.com.

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Canada Equine Equipment Market July 2010

Import Market and Competition

As the graph above demonstrates, the top two countries that export saddlery and harness equipment into Canada are China and the United States, with China currently in the number one position. With the exception of 2005, the two countries have seen the same trends in market share growth and decline. However, the gap between China and the United States widened between 2008 and 2009. It is important to note that the market share is there for the taking for reasonably priced, well-made U.S. products. Below we can see the graphs of China and the United States individually represented.

The graphs of the two countries individually shows that China is a rising contender for equine equipment market share in Canada as its growth has steadily matched and surpassed that of the United States. An assessment of China’s products should be made to determine what has given it an edge over products from the United States. Two examples of English riding saddles are displayed below, with corresponding tables of details and price per unit information.

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Canada Equine Equipment Market July 2010

Country of Origin

China United States Cost Per Item (US $) $400.00 (saddle only) $600.00(approx) Primary Material Italian Leather Leather A U.S. company must consider the cost difference between U.S. and Chinese products when seeking to penetrate the Canadian market. Retail and Distribution Equine equipment in Canada is distributed through a variety of channels. Some major producers, some of which are U.S. based, have private distributors for the Canadian market, some sell directly to retail chains and outlets, and others sell directly to the consumer via mail order or through web sales. They frequently use a full line of distributors to cover the geographic and regional distances of the Canadian market. Although there are a few countrywide distributors of equine equipment, most distributors are regionally based. A new-tomarket U.S. manufacturer may want to develop relationships with several full-line distributors selected on the basis of geographic coverage. Quality and innovation are important distinguishing characteristics in this industry, and producing niche products could be a successful strategy. In addition to unique product characteristics, distributors and retailers are looking for healthy margins, and strong product support, including adequate stocks, aggressive advertising, marketing and sampling programs, and exclusive distributorships. Market Prospects Niche markets – equine equipment specifically structured to the various types of equine sport in Canada will be popular. High quality items that also allow riders to express their individual personality are gaining popularity. Horse owners’ increasing willingness to pamper their horses may open opportunities for small manufacturers to carve out a niche in the Canadian equine equipment market. Premium materials – high quality fabrics and leathers are in demand in Canada’s market. As previously mentioned there is a niche for custom fitted and made saddles and clothing specific to the nature of the horse activity. A company looking to enter the Canadian equine equipment market should focus on the base materials of their product as well as innovative construction of saddles and tack.

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Canada Equine Equipment Market July 2010

Recommendation of Professional Riders – the recommendation of experts in the field of equine sports carry significant credence with Canadian horse owners. Partnerships with experts in the equine sport industry may present a marketing opportunity to build the trust that is so important to horse owners. Focused Marketing – the equine equipment market gives consumers plenty of options, which means differentiation is a key component. Strong communication focused on company integrity and commitment to product safety and quality is important in building loyalty with owners increasingly concerned about their pet’s health. Focusing on the health and safety benefits of building materials, structural features, and comfort is a good strategy. Market Access Market access is restricted only to the normal Canadian export regulations. A new-to-market firm should have an understanding of the North American Free Trade Agreement (NAFTA) and both countries’ import export regulations. Any product labeling coming into Canada should acknowledge both official languages, French and English. Companies should also be aware of any customs regulations on importing goods into Canada for proper valuations on their product. That information can be found on the Canadian Department of Foreign Affairs and International Trade website. New Regulations While there are no federally legislated regulations on saddles and tack, the equipment should not present harm to the rider or the animal. There are approved best practices in place regarding the type and fit for most equine equipment, from saddles to bits. Most of the important information would come from the riders associations and the riders themselves. This information can be found at Equine Canada, which has many accessible articles on innovations in the industry. Federal Government Departments Regulating Equine Equipment The Competition Bureau of Industry Canada administers legislation requiring that labels on equine equipment and tack be bilingual, including declarations and dealer name and address. The Consumer Packaging and Labeling Act and Competition Act with regards to labeling and advertising can be found at: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/01248.html#2.3 There are good resources about Canadian safety standards for riding at the Canadian Agriculture Safety Association Website: http://www.casa-acsa.ca/ For more information about Helmet label requirements, the CSA website has very useful information at: http://www.csagroup.org/consumers/consumer_site/csa_marks.html Upcoming Trade Events International Bromont July 21- 25, and July 28 – August, 2010 Bromont, Quebec http://www.internationalbromont.org/bienvenue-e.shtml

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Canadian National Appaloosa Show July 27 - 31, 2010 Brandon, Manitoba http://www.appaloosa.ca/ Calgary Exhibition and Stampede July 9 – 18, 2010 Western Canadian Miniature Horse Club July 30 – August 1, 2010 Zone Paint Horse Show August 3 -8, 2010 4-H Rodeo September 18 -19, 2010 Calgary Stampede Cutting Horse Futurity presented by Wrangler October 13 -18, 2010 Calgary Exhibition and Stampede July 8 - 17, 2011 Calgary, Alberta http://ag.calgarystampede.com/events Champions’ Welcome September 3 – 5, 2010 Masters September 8 – 12, 2010 Calgary, Alberta, Canada http://www.sprucemeadows.com/index.jsp The Mane Event – Equine Education and Trade Fair October 22 – 24, 2010 Chilliwack British Columbia http://www.maneeventexpo.com/bc/default.asp The Mane Event – Equine Education and Trade Fair April 29 – May 1, 2011 Red Deer, Alberta http://www.maneeventexpo.com/ab/ Mid-Western Ontario Horseman’s Society (MWOHS) Open MWHS show July 31, 2010 Dorchester Fairgrounds Brigden Tri County/MAS Show August 7 - 8, 2010 Aylmer Fair August 14, 2010 Zurich Horse Show September 12, 2010 Western Fair – Non point Show September 17 – 18, 2010 Forest Fair - Open MWHS Show

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September 25, 2010 Ilderton Fair - Open MWHS Show October 3, 2010 Brigden Fair - Open MWHS shows October 9 – 10, 2010 Oil Springs, Ontario http://www.xcelco.ca/~mwhs/showDates.html Four Seasons Horse Shows Fall Dressage - EC Gold September 11 -12, 2010 Dressage - EC Bronze 1 September 11 -12, 2010 Dressage - EC Bronze 2 likely October 16, 2010 Jumper schooling show October 17, 2010 Pre-Royal Hunter schooling show October 24, 2010 Iron Horse Equestrian Center Milton, Ontario L9T 2Y1 (http://www.ironhorseequestrian.ca/index.htm) The Royal Agricultural Winter Fair November 5 – 14, 2010 Toronto, Ontario http://www.royalfair.org/MediaTradeCompetitors Manitoba Livestock Expo November 4-7, 2010 Brandon, Manitoba http://www.brandonfairs.com/index.php?pageid=365 Important Associations Horse Canada - http://www.horse-canada.com/?page_id=1344 American Saddlebred Association of Canada - www.saddlebredcanada.com National Barrel Horse Association of Canada - http://nbhacanada.com/ PHAC Peruvian Horse Association of Canada - www.phac.ca/ The Clydesdale Horse Association of Canada - http://www.canadianclydesdales.com/ Canadian Sport Horse Association - www.c-s-h-a.org/

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Canada Equine Equipment Market July 2010

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Other Websites Agriculture and Agri-Food Canada - http://www.agr.gc.ca/ Equine Canada Website - www.equinecanada.ca/ For More Information The U.S. Commercial Service in Calgary, Canada can be contacted via e-mail at: [email protected]; Phone: 1-403-265-2116; Fax: 1-403-266-4743; or visit our website: www.buyusa.gov/canada The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. Comments and Suggestions: We welcome your comments and suggestions regarding this market research. You can e-mail us your comments/suggestions to: [email protected]. Please include the name of the applicable market research in your e-mail. We greatly appreciate your feedback. Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. International copyright, U.S. Department of Commerce, 2007. All rights reserved outside of the United States.