IE 11 is not supported. For an optimal experience visit our site on another browser.

'Designer dogs' or mutt, the costs are adding up

The first sign that the Dog Establishment was under attack came in 1988, when a fringe Australian breeder named Wally Conron mixed a labrador retriever with a poodle.
Image: Westminster Dog Show
Someday, you could see labradoodles, puggles and snorkis at the prestegious Westminster Dog Show — but no time soon if the AKC has its way.Jeff Christensen / AP
/ Source: Business Week

The first sign that the Dog Establishment was under attack came in 1988, when a fringe Australian breeder named Wally Conron mixed a labrador retriever with a poodle. Conron’s cocktail, a labradoodle, didn’t immediately upend an old guard teeming with breeders, trainers, chewy bone manufacturers, and psychiatrists — until word of his dogs spread to the U.S. By the late ’90s a rogue market had been born, and bespoke canines the size of Birkin bags began fetching more than $1,000. By the shameless Aughts, the dog community’s dirty little secret was out: Uma Thurman, Miley Cyrus, and Jake Gyllenhaal bought their own designer pooches. Later, President Barack Obama announced that he, too, was considering a labradoodle. In January, YouTube sensation Caesar the Puggle, a gangsta-rapping cross between a pug and a beagle, became the world’s first haute mutt celebrity.

The designer dog market has now grown into its own niche industry. Ten years ago there were only about 40 such breeders, says Rex Meyers, who breeds cavachons, a cross between King Charles spaniels and bichon frisés, on his Iowa farm. Now, Meyers claims, “thousands” are feeding a growing demand. A custom-bred goldendoodle puppy, a cross between a golden retriever and a poodle, costs up to $1,500 — twice the price of either of its parents. In spite of such success, however, the industry lacks what it covets most: respect from the Dog Establishment, and the financial opportunities that come with that respect. Tensions come to a boil on July 7-10 as thousands of carefully honed purebreds descend on Paris’s Nord Villepinte exposition center for the World Dog Show 2011, the Art Basel of the canine universe.

Businessweek: Your dog may be smarter than you know

Conspicuously absent from Nord Villepinte will be labradoodles, goldendoodles, the trendy cockapoos (cocker spaniels mixed with poodles), snorkis (schnauzers and Yorkshire terriers), Maltipoms (Maltese and Pomeranians), or any other designer dogs. That’s because the Purebred Establishment remains outwardly horrified by its mutt-breeding adversaries, who, they allege, taint the market with their weird-looking, popular, expensive Frankendogs. According to basset hound breeder Edna Morris, “The designer dogs, until they are established and recognized as a breed, are mutts.” That doesn’t dissuade Marcus Richmond, a co-owner of America’s Pet Registry in Harvey, Ark., which registers designer dogs. “You know the saying,” Richmond declares. “ ‘Keep your friends close, keep your enemies closer.’ ”

In retrospect, the canine civil war was inevitable. For years demand and supply have been moving from purebreds to designer pooches, the puppy du jour. Now the $65 billion U.S. dog market — encompassing 72 million dog-owning households — is on the cusp of a paradigm shift. This has organizations such as the American Kennel Club (AKC), the country’s premier purebred dog registry, in an existential crisis. The death last month of one of the planet’s richest purebred dogs — Leona Helmsley’s multimillionaire Maltese, Trouble — could also be seen as a bad omen.

Businessweek: Dogs' features set by a handful of genetic regions

At the heart of the battle is a culture clash over the proper role of shameless profiteering. “A breeder of a purebred dog is really a kind of artist,” says David Frei, co-host of the prestigious Westminster Kennel Club dog show. “They’re trying to create a work of art that shows all the best traits of a particular breed.” Morris, who breeds bassets at her home near Pittsburgh, also stresses the difference between art and commerce. “If you’re doing everything right,” she says, “you’re not making money. The people with the designer breeds are looking for the moneymaking venture.” On this matter, both sides agree. “We’re capitalists here,” says APRI’s Richmond, who also says the AKC has tried unsuccessfully to buy out his organization three times. (AKC spokeswoman Lisa Peterson declined to comment.)

While it waits for acceptance, the designer dog industry is busy developing its own nascent establishment consisting of registries such as APRI, designer dog breeding websites, and even small-scale competitions such as the Mixed Breed Dog Clubs of America’s upcoming event in Wentzville, Mo. It has also developed an ambitious pricing model: While purebred puppies generally run $500 to $1,000, designer dogs often cost 25 percent to 50 percent more. And the designer establishment is promoting growth by lowering the price of registration. The AKC charges pure breeders $25 to register a litter, plus $2 per puppy; then each new puppy owner registers that puppy for $20. APRI charges just $5 per litter, plus $1 per puppy and $20 for new puppy registration.

Businessweek: It's a what?

For major breeders, the costs add up. Alana Snook bred only purebreds at her central Pennsylvania estate until she went rogue five years ago. “You’d think that the AKC is all for dogs being healthy, but they’re not,” says Snook, who now breeds puggles and cavachons. “All they care about is their registration fees. AKC makes a lot of money off breeders.” Since she began breeding designer dogs, Snook says, “our AKC fees have probably gone down to one-fourth of what they used to be.” And would-be puggle owners are lining up to buy her breed before they’re even born.

The AKC’s Peterson is shocked that anyone would accuse the storied kennel club of blatantly trying to make money. She stresses that, for $35, designer dog owners can enroll their dogs in the AKC’s less prestigious Canine Partners program, which offers a special collar and a one-year subscription to AKC Family Dog magazine — so long as they don’t register them. “They’re not breeds,” Peterson says more than once. “You have to understand that a breed takes generations and generations to create.”

Therein lies the ambition of the designer dog business. While so-called hybrids lack a “breed standard,” notes Will Perrin, owner of the International Designer Canine Registry, that doesn’t mean they can’t be registered somehow. The IDCR, which registers 500-plus dogs a week, simply documents its dogs’ genealogies. (According to designer dog enthusiasts, the dogs have clearly delineated genealogies; mutts, on the other hand, do not.) The World Dog Show has yet to admit designer dogs, Perrin continues, “because they’re not true to type.” Yet that, he says, won’t always be the case. “Labradoodles are very close,” he says. “So are cockapoos.” It’s a future that Westminster’s Frei is prepared, begrudgingly, to acknowledge. “There are a number of breeds today that got their start by being crossbred,” he says. “Some farmer said, ‘I like this dog because he knows how to herd my sheep.’ Designer dogs could eventually become recognized if they have such a following.”

Meanwhile, the anti-Establishment is now tasked with cobbling together its own orthodoxy. Stu Collins, a dog breeder in Ypsilanti, Mich., recently had a customer who wanted to breed a German shepherd with a dachshund. “It was really weird,” Collins says. “It had a German shepherd head and short legs. I don’t know how it happened, physically.” Sometimes, Collins says, customers need to be educated. “If you take two hyper dogs, you’ll get a really hyper dog. A Pomeranian and a rat terrier, say, that would not be a good mix.”