How operational efficiency is solving the pet industry's hidden crisis

Most of the pet industry runs on outdated systems, manual processes, and operational inefficiencies that ultimately cost families time, money, and peace of mind. While entrepreneurs chase the next breakthrough app or subscription service, the biggest opportunities lie in fixing the fundamental operational challenges that affect everything from veterinary clinics to pet food distribution.

The invisible infrastructure crisis

Most pet parents never think about how their veterinarian orders supplies, manages patient records, or schedules appointments across multiple doctors. But these operational realities directly impact the quality, speed, and cost of care their pets receive.

Industry veterans recognize these inefficiencies as both a massive problem and an enormous opportunity. As Charlie Tapp, founder of Vetted Capital, notes, "There's an over-emphasis on tech, and not enough emphasis on the problem that you're solving." Companies that solve operational challenges may not generate the same headlines as the latest pet tech, but they create sustainable value for everyone involved.

Pet product distribution represents one of the industry's most complex operational challenges. Traditional distribution networks struggle with the complexity of everything from prescription medications requiring cold storage to bulk food deliveries with specific nutritional requirements.

For example, restocking clinic supplies involves phone calls to multiple distributors, comparing prices across different vendors, managing delivery schedules, and tracking inventory manually. VetCove recognized this operational nightmare and created what Tapp describes as "basically Expedia for vet clinics in terms of restocking."

The impact extends far beyond convenience. Tapp notes, "The business has been created relatively quickly in the face of all of the big distributors, like MWI and Patterson." When veterinarians spend less time managing operations and more time with patients, care quality improves. When clinics can optimize their supply chains, they can offer better pricing to pet families.

Operational efficiency with and without the subscription model

One common narrative in pet tech suggests that subscription models represent the sector's golden ticket to success. Companies like Farmer's Dog and Modern Animal have built impressive businesses around recurring revenue. Subscription and membership models are, by nature, stickier, but some of those businesses are churning because of the high price tag. 

Other businesses are finding operational efficiency without the subscription business model. Consider Librela, a medication for dog arthritis that most people have never heard of. Within 24 months, it reached a $500 million annual run rate without fancy subscription mechanics or direct-to-consumer marketing. It filled the much-needed gap for effective arthritis treatments.

The AI efficiency reality check

Artificial intelligence dominates technology discussions, but its most practical applications in pet tech focus on operational efficiency. "In general, I view AI as a deflationary force more than as a source of growth," explains Tapp. By reducing the need for human input in many processes, AI can lower the cost of goods and services, putting downward pressure on prices. While this can benefit consumers, it also means the economic gains from AI may be concentrated among companies and investors who own or deploy the technology, rather than being widely distributed through job creation.

The veterinary AI scribe market shows this perfectly with the early adoption of AI scribe companies. These tools handle the documentation that currently requires veterinarians to spend precious minutes typing notes instead of examining patients.

"If you think about what SaaS companies fundamentally are, they're software built around some big B2B players, very routine, very tedious, annoying problem that needs to be solved with software," Tapp explains. "AI is just the next generation of making that even more seamless."

While startups struggle with AI differentiation, the technology's biggest impact may benefit companies with existing operational footprints. "I think the ones that benefit the most from it are the big incumbents that have lots of head count and tedious processes that have historically been low margin businesses," Tapp notes.

"If you could squeeze another two to 5% EBITDA gain out [of operations], who does that matter the most to? It matters to the retailers, the insurers, the distributors, right, the unsexy, relatively unprofitable businesses compared to pharma or food businesses."

Operational efficiency innovations often create more sustainable value than consumer-facing AI applications. When established players can automate routine processes, the margin improvements compound across large revenue bases, creating significant value without changing customer behavior.

The unglamorous but essential work

For entrepreneurs and investors, the operational efficiency opportunity represents a chance to create sustainable value by solving real problems that affect millions of interactions every day. As the VetCove example demonstrates, these may not be the most glamorous innovations, but they make the essential backbone of pet care—inventory management, supply ordering, and scheduling—run faster, cheaper, and with fewer errors. 

That efficiency can either lower prices for pet owners, boost margins for operators, or both, creating a well-oiled machine that’s harder for competitors to disrupt and easier to scale. In a sector where reliability and consistency are non-negotiable, these “unsexy” improvements are often what keep the entire system running smoothly.