VIRGINIA BEACH, VA / ACCESSWIRE / January 31, 2024 / The number of US households with pets has been trending upwards for decades, with more than 5 million more pets in the US than before the pandemic. Beyond the pandemic-driven boom, trends persist, driven by changing social dynamics as well as technological advances. According to Morgan Stanley, the pet services industry is set to grow at a compound annual growth rate (CAGR) of 8% over 2022-2030, reaching an expected total $277 billion.
The average annual household expenditure per pet can grow from $980 in 2020 to $1,292 in 2025 and further expand to $1,909 in 2030, according to Morgan Stanley. This growth will be distributed across various categories, including pet food, veterinary care and several other services. Additionally, there is an emerging range of sub-sectors such as dog walking, pet sitting, grooming and training, underscoring the scale and scope of the industry’s growth. Amidst this vast expansion, this upward trend in sales is estimated by some to be as much as 50% higher by 2023 in $143.6 billion.
Market Factors Fueling the Boom
The growth of the pet services industry in the US can be attributed to several key factors. These range from the evolving perception of pets in our households to technological innovations that are shaping how pet care services are provided:
- Humanization of Pets: Pets are increasingly seen as members of the family, leading to increased demand for high-quality services. This change can be seen in 2023 sales pet food and treats ($62.7 billion), veterinary care and product sales ($37 billion) and over-the-counter supplies and drugs ($32.1 billion). Furthermore, almost half of pet owners in a recent survey by Ally Consumer Research said they would cut back on spending on themselves or take out a loan before cutting their pet budget.
- Increase in Pet Ownership: The APPA National Pet Owners Survey has revealed that 66% of US households own a pet. This translates to approximately 86.9 million households with pets, including 65.1 million dog owners and 46.5 million cat owners. Millennials and Generation X are the largest demographic groups among pet owners.
- Impact of COVID-19: The pandemic has accelerated the growth of the pet industry in several ways. With more people now working from home, there has been a noticeable increase in pet ownershipwhich naturally contributes to the overall demand in the industry, but it also strengthens e-commerce sales.
- Technological Advancement: Technology plays an important role in pet care, including more than half of Americans turn to Amazon.com Inc. for pet products. Other online platforms like Target Corporation, Walmart Inc. and Costco Wholesale Corporation is also very popular with consumers. however, Chewy Inc. still frontrunner in dedicated online pet shop segment. Overall, technology provides more variety and convenience to consumers looking for pet-related products.
Emerging Trends within the Industry
As the pet services industry continues to grow, several emerging trends are shaping its future. These trends reflect the changing needs and preferences of pet owners, as well as a broader social shift toward sustainability and holistic care:
- Premiumization of Services: The pet care industry is experiencing a significant change towards premiumization, evidenced by the rising popularity of luxury pet resorts and advanced personalized nutrition options. Companies like it Freshpet is at the forefront of this movement, with a focus on high-quality, specialty pet food products.
- Focus on Pet Wellness: There is a growing emphasis on holistic care in the pet industry, which goes beyond physical health to include mental well-being. This is reflected in the increasing provision of mental health resources for veterinary professionals and the inclusion of alternative pet therapies such as massage, acupuncture and chiropractic care in treatment plans.
- Subscription Based Services: The pet industry is witnessing a convenience-driven surge subscription-based models. This is particularly evident in the success of subscription services for pet foods and ongoing service memberships. Companies like Chewy and Amazon are leading this trend, with Chewy reporting a significant 18% increase in its vehicle sales, highlighting consumers’ growing preference for regular, hassle-free delivery of pet products and services.
- Maintenance: The pet industry is increasingly focusing on producing more socially and environmentally sustainable products, from organically grown pet food to ecological chew toys. The Pet Sustainability Coalition, in collaboration with the World Pet Association, found that out 91% of industry professionals in 2021 the demand for such products is expected to increase rapidly. This trend aligns with a broader consumer shift toward sustainability, which is more 50% of pet owners willing to pay more for eco-friendly pet care products.
Latest Trends In The Pet Industry
Aside from these broader trends, there are also specific innovations in the pet industry worth focusing on. Companies like it Don’t! Group and Inspire Veterinary Partners Inc. (NASDAQ: IVP) is using new strategies. Don’t! has partnered with Bright Horizons Back-Up Care Services to offer pet care as an employee benefit, aiming to adapt to the changing needs of the modern workforce and potentially improve work-life balance. Inspire Veterinary Partners, on the other hand, is moving away from conventional veterinary business models, focusing on employee and pet welfare while introducing different business structures and equity options for veterinary professionals. vet – the company prides itself on being “employee-owned” due to its innovative equity model.
This approach seems to be a response to the current industry trend, where large consolidators own approx. 50% of all veterinary hospital revenue in the US The acquisition of independent clinics is often driven by the desire for greater efficiency and the need for greater investment in technology, and by joining larger networks, these clinics can enhance their workflow, boost productivity and potentially improve the client experience. , which is especially appreciated by younger pet owners, such as millennials and Generation Z. These steps taken by Wag! and Inspire Veterinary Partners can be seen aligning with evolving consumer expectations and a shift towards more client-focused and employee-friendly practices in the pet care industry.
Industry Evolution And Future Outlook
The expansion of the US pet services industry in recent years is a testament to the deepening bond between people and their pets. Driven by humanization, increased ownership, technological advancements and a focus on wellness and sustainability, the industry is adapting to the changing needs of pet and owner. Meanwhile, innovators like Wag! and Inspire Veterinary Partners Inc. is redefining standards in unexpected ways, emphasizing ethical and welfare-oriented practices for this ever-growing industry. While this steady growth has the potential to boost the economy, it also stands to enrich the human-pet relationship, symbolizing the long-term importance and potential of the sector.
Other companies innovating in the space include PetIQ, Trupanionand Zoetis.
Featured image by Andrew S in Unsplash.
Please contact:
Kevin McGrath
[email protected]
SOURCE: Inspire Veterinary Partners, Inc.
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