Pet Ownership GrowthCreates Large Opportunity for Pet Specific Products & Services
The U.S. pet industry hit a historic high of over $100 billion in total sales in 2020 and continues to see year-over-year growth into2021. (※1) It’s of no surprise that people felt 2020 was the right year to add a new pet to their family. Due to the pandemic, working from home made it easier to raise a new pet and bonding with a new fur baby was common practice to cure loneliness during COVID isolation.
Even though industry sales hit a milestone in the year 2020,COVID wasn’t the only contributing factor to growth. Pet market sales have been increasing for the last decade with a large amount of growth in food &treats, consumer products, vet care, supplies, and medicine. According to Statista(※2), “Pet food was the highest selling pet market product category in theUnited States in 2020 and is projected to maintain the top spot into 2021.”
Pet food growth stems from a more overarching trend that we see in mass market: wellness. Wellness is a top priority for the majority of pet owners as knowledge continues to grow around being a great pet parent. The majority of pet owners are millennials, followed by baby boomers and Gen-X. Rover, a pet walking and pet sitter marketplace, reports millennials are the most likely generation to spend on high quality products like natural and organic pet food & products, and are willing to pay more for sustainable alternatives. Millennials, “the wellness generation,” seem to be leading the growth when it comes to wellness products. Some trends we see growing are:
- More nutritious foods & treats (e.g. all natural or organic, raw, keto, freeze dried, human-grade food that’s unprocessed, etc.)
- Supplements like probiotics or fish oil
- Pet stress relief like CBD or aromatherapy
According to Phycology Today, pet owners “happily and heartily invest in their pets, even during periods of recession.”(※3) Along with wellness products, the industry is reporting rapid growth in other health-related areas such as online and convenience-oriented vet services and pet insurance options. Due to increased demand, new online vet service companies have been securing investments in years 2020 and 2021. Companies such as TeleVet and Bond Vet recently raised millions of dollars to expand their platforms and services.(※4,5) Whether companies such as TeleVet and Bond Vet offer online visits, training, communication between vet clinics and pet owners, or even cover payment processing, pet owners are looking for ways to stay in contact with professionals to make sure they are always making the best decisions.
With the increased demand for vet professionals and services, is the rise in annual spend for pets. A way to manage and cap higher expenditures is through pet insurance. Pet parents are investing more than ever in pet insurance, and essentially increasing growth in that area. Pet health insurance has grown 22.1% over the past five years in the U.S. with market leaders such as Pets Best, ASPCA, Lemonade, Healthy Paws, Nationwide, Trupanion, and more. Based on the vast options when it comes to insurance providers, platforms to compare insurance plans and quotes have emerged into the marketplace. The company, Pawlicy Advisor raised over $6 million in 2021.(※6)
- The U.S. has seen growth in incubators and VCs specializing in the pet industry (e.g. LeapVentures). As pet business trends expand in the U.S. and other advanced pet countries, and pet ownership is on the rise in Japan, it is highly probable that these trends will expand to Japan.(※7)
- Globally, direct-to-consumer and e-commerce sales are growing and are projected to increase in the future. This growth will include pet products and services. Same as marketing any products and services, Sustainability, Natural and Organic, and Fair trade are key elements to become consumers’ choice.
- With global depression rates growing, there will be more households eager to have emotional support pets.
- Pets are becoming a genuine part of a family as they are increasingly included in Christmas cards and family photos. This trend doesn’t look like it will be slowing down any time soon, but rather accelerating as professionals continue to work from home and millennials fully commit to being the “wellness generation.”
- According to Psychology Today, people report buying something for their pet makes them happier than buying something for themselves or someone else.(※3) This reality will continue to feed the desire for more growth the coming years.