How the Economy, the Horse Industry and the Internet Are Affecting Horse Professionals

1. Rethinking the Horse
Business 2012
How the Economy, the Horse
Industry and the Internet Are
Affecting Horse Professionals

2. Tonight’s Speaker
Elisabeth McMillan
Editor and Founder of Equestrian Professional.com

3. Outline for Tonight
• State of the Industry: Reports from equestrian
associations, websites and industry leaders
• Results from our survey of horse professionals
Comparison of 2010 – 2011
• New and “Shifting” Business Models
• The Internet
• Brief Overview of Mainstream Economic Outlook
• Horse Business Strategies for 2012

4. USA- 2005
• Industry directly produces goods and services of $38.8
billion and has a total impact of $101.5 billion on U.S.
GDP.
• 4.6 million people are involved in the horse industry in
some way, either as owners, employees, service
providers or volunteers. This includes 2 million horse
owners, of which 238,000 are involved in breeding,
481,000 in competing, 1.1 million involved in other
activities, 119,000 service providers and 702,000
employees, full- and part-time and 2 million family
members and volunteers. That means that 1 out of
every 63 Americans is involved with horses. ~
AHC – American Horse Council

5. Industry Stats – UK 2010
• “The gross output of the equestrian sector is
valued at £3.8 billion (pounds) a year, lower than
previously but reflecting the shrinking consumer
market caused by the economic downturn. It is
still, however, an extremely large figure in its
own right, boosted significantly when other
equine-related activities such as racing (an
estimated £3.7 billion) and major equestrian
events (an estimated £6 million) are factored in.”
– BETA – British Equestrian Trade Association

6. Industry Stats Canada 2010
• The economic contribution from the horse industry has increased from $15.8
billion in 2003 to $19.7 billion in 2010 – primarily driven by an additional $5
billion in paid employment from the industry.
• Annual foal production has decreased by 50% in the 2003 through 2010
period and is expected to continue to decrease in 2011.
• Costs to keep a horse have increased by more than 70% between 2003
and 2010. Horse owners in all provinces reported lower prices for horses
bought-and-sold in 2010 compared to 2008/09 prices – generally a 49%
decrease in prices.
• There are 79,000 more horse-owner households in 2010 compared to
2003.
• The pool of horse owners is aging, with an increase in the median age for
horse owners to the 50-to-59 year-old age range. It was reported in 2010 that
24% of all horse owners are 60-years-of-age or older
2010 Canadian Horse Industry Profile Study – Conducted by Strategic Equine Inc

7. Industry Concerns
• Unwanted Horses/ Welfare of Horses
• Growth - New Participants i.e Youth
• Urbanization
• Support of Infrastructure – Sport and
Business
• Labor – Qualified and Affordable
• Hay Shortage – Local and National

8. Industry Responses
Equestrian Associations
• AHA – Lance Walters - Youth – Marketing Fund available for horse
professionals. Cooperation - increase participants no matter the breed or
discipline.
• USHJA – Shelby French – Recent Survey Results – the importance of
community. Using technology to stay connected and to educate. Looking to
support professionals – EquestrianCoach.com –gives access to instruction
by top coaches. EAP- 10 regional clinics, TCP Outreach Program has
helped to support growth and partnership with IHSA – Horsemanship Quiz
to engage youth
• USDF – Stephan Hienzsch - Director - no decline in recognized
competitions – Active competitors stayed active but choosier about shows –
quality over quantity- slight decline in membership (3%.) Goals - Affordable,
Accessible, Educational – Variety of memberships provides choices,
maintains engagement and connects members with valuable educational
videos – E-trak Online learning center.
• USEA – Brian Sabo – Serious riders increased number of events. Continue
to educate, ICP and on Syndicates in supporting equestrian athletes and
involvement
• NRHA – Christa Morris – Dramatic increase in shows – membership steady
- approved a record number of shows (963) and had a nearly 70% increase
in entry-level shows. And NRHA produced two additional shows this year -
the NRHA European Derby and NRHA Cowtown Classic.

9. AZ Horse Council - Anne May
• Just wanted to let you know that in AZ, the equine industry has had a hard year, with
drought, wild fires, and 100lb bales of hay increasing in price from $8 per bale to now
$20, expected to reach $35 by next year, if its even available. Already we are seeing
an increase in unwanted horses due to the economy and price of hay. While the AZ
Horse Council is aware of this issue, economic supply and demand issues are
sometimes beyond our control.
• What we did accomplish this year working with our AZ Horse Council lobbyist, was
agricultural classification in property taxes for equine boarding, training and breeding
facilities. In effect this eliminated almost all property taxes for qualifying properties.
Only two legislators voted against our bill, all others and the Governor fully supported
our efforts to protect our industry in AZ and the bill was signed earlier this year.
• The AZ Horse Council is politically active and is one of only two or three in the nation
that has a lobbyist.
• If equestrian professionals nationwide could encourage and support their horse
councils through membership and being actively involved, networking with other
states for ideas and solutions, we could potentially be more effective in overcoming
some of the challenges of 2012.

10. Horse Sales
• The Exchange - Overall prices fell 30-40% after 2008 then in 2011
they fell an additional 10 – 20%
• 2010 - $3,000,000
• 2011 - $2,400,000
• Increase in number of horses sold – decrease in prices –
• Increase in lease to purchase, extended trials and price negotiation
• NRHA- Sale Held in Conjunction with the NRHA Futurity
The Sale Arena also saw a lot of action during Saturday’s
NRHA/Markel Insurance Futurity Prospect Sale. The sale saw a
20% increase with more than $1.7 million sold. The average for the
sale exceeded $30,000. The high-seller, Commanders Lil Step, was
sold to Xtra Quarter Horses to the tune of $200,000.
• Duffy Equestrian Center – Ireland – Sales have stayed steady
because market is outside Ireland. Currency exchange to UK
favorable.

11. Paul Bennet – CPHA
• Cooperation is key
• Professionals are adjusting
• Customers are picking and choosing the
shows
• Sales affecting the progression of
young athletes - customers not moving
up i.e. 3ft – 3’6

12. Ginny Grulke – KY Horse
Council
• Horses are still not selling, especially the low end, untrained (or poorly
trained) horses. Well trained, more expensive horses still seem to be selling,
although it is taking longer to find a buyer. Even in Trail horses, there is a
farm that does a good job of internet marketing and is selling well trained
trail horses for $3000 - $7500 whereas the average trail horse in KY does
not sell for much over $1500. It is their marketing that is making the
difference and they are selling to out of state residents
http://www.adamshorseandmuleco.com/
• In racing, some changes are coming about through the Jockey Club having
McKinsey consultants study the industry and make recommendations. As a
result there is going to be a facebook game similar to Farmville, but for
racing.. And an online game similar to Fantasy Football, except Fantasy
Horse Racing, where you own a stable of horses and make decisions on
what races to put them in, what jockey to use, etc. And there is going to be
an “Angie’s List” for trainers, allowing horse owners to comment, both
positively and negatively on their experiences with trainers. (and trainers
may reply).

13. Horse Breeding
• US Thoroughbred Racing – down an
additional 10 – 11% from 2010
• Ireland 30 – 40% decrease in response to
economic crisis and unwanted horse
problem
• Canada - Annual foal production has
decreased by 50% in the 2003
through 2010 period and is expected
to continue to decrease in 2011

14. Horse Shows – Prize
Money, Incentive Funds,
Sponsorship
• Hunter/Jumper Shows - Capital Challenge – sponsorship steady, number
of applications increase 10% - live feed positive - Oliver Kennedy :: WIHS –
Entrees unchanged - increase in sponsors – decrease in vendors –
spectators vs. live feed - Bridget Love :: Hits –There was growth in 2011
over 2010, but overall figures are still below the 2008 level. 10% increase in
the winter circuit and a 15% increase in the summer circuit. The East Coast
is generally better off than the West Coast
• NRHA - The NRHA Futurity saw a massive increase in added money due to
the NRHA Nomination Program. According to NRHA Chief Financial Officer
John Foy, with the addition of the North American Nomination Program’s
added monies, there was an increase of more than $600,000 in added
money with over $420,000 in the NRHA Open Futurity and $180,000 in the
Cinch NRHA Non Pro Futurity. The total purse for just the Futurity is
projected to be more than $1.9 million (a 25%+ increase). Nominators are
projected to collect almost $100,000 – even if they don’t own the horse!

15. 2010 vs 2011 - SURVEY
Over all growth of business. Did your horse
business grow, decline or stay the same?
Stayed the
Increased Decreased
same
2010 34.5% 31.7% 34.5%
2011 38.6% 26.3% 36.1%
Change 4.1% 5.4% 1.6%

16. Change in services
2010 2011

17. Mainstream GDP

18. 2010

19. 2011

20. What adjustments to your
business have you made?

21. Opportunities
2010 2011 Change
Purchased 16.4% 15.3% 1.1%
Land
Purchased 20.8% 22.7% 1.9%
Major
Equipment
Purchased 71% 79.8% 8.8%
Horses
Refinanced 17.1% 15.2% 2%
Major Loans

22. Business Model Shifts
• High profit margin activities are down
• Buy/Sell – Lease – Trials – Negotiations – Take longer
• Increased Expenses –
• Manage profit margins – cash flow
• Multi-use – Horses in therapy, corporate leadership,
• Cooperation – Strategic Alliances
• Leveraging Your Expertise and/or Sphere of Influence
Online – BRAND building
• Increased volume – more customers

23. 2011
Where are the majority of your new customers
coming from?

24. Social Media/Internet
• Brand Building - Run Henny Run – Peter Atkins
Oliver Townend – Shawn Flarida
• Leveraging Expertise – HorseShowsOnline
JudgeMyRide – EquestrianCoach
• Disaster Communication – Wildfires TX and
Southwest, Floods in NE
• Live Feeds from Horse Shows i.e increased
sponsorships – build excitement for customers
• Causes – Riders4Helmets

25. Mainstream Economic
Outlook
• Depends on Where You Live. However
economic improvement is expected to slow
in 2012 vs 2011.
• Most are predicting a 10 year recovery
period.
• European Crisis is EXTREMELY troubling

26. European Financial Crisis
• “There is no economy in the world,
whether low-income countries, emerging
markets, middle-income countries or
super-advanced economies that will be
immune to the crisis that we see not only
unfolding but escalating,” Christine
Lagarde of the IMP (International
Monetary Fund)

27. Strategy 2012
1. Business Model – Shifts can change core needs ie.
Insurance, legal docs, marketing strategies and long
term profitability.
2. Strict Management - Projections, Profit Margins and
Cash Flow Management.
3. Increase Marketing - Continue to focus on growth -
especially youth – many free and inexpensive tools
4. Stay in touch and in tune with mainstream - Bibliography
5. Identify Opportunities – Low interest rates – Emerging
Markets – Creative Solutions eg. Linda Allen’s
Benchmark Program
6. Utilize your Equestrian Support Systems - Associations,
Councils, Equestrian Professional and each other!

28. Support System
• Cooperation - Peer to Peer – Barn to Barn
• You are not alone
• AHC, BETA, Equestrian Discipline and
Breed Associations, Equine Land
Conservation
• Equestrian Professional – Free and Paid
resources

29. More Support
• Equestrian Professional Membership –
• Tools, Information, Webinars and
Community
• Horse Business Hotline - 2012 Horse Biz
Tune-Up
• Equestrian Professional’s Mobile Guide
• Equestrian Mastermind 2012
• Equestrian Social Media Boot Camp

30. Thank you for listening!
Join us for the members session
“Top Horse Business Marketing Strategies
for 2012!”
www.EquestrianProfessional.com