Overall spending in the pet industry for 2015 came in at a record US$60.28 billion, according to the American Pet Products Association (APPA).
Bob Vetere, president and CEO of APPA, announced the findings at Global Pet Expo, an annual trade show presented by APPA and the Pet Industry Distributors Association (PIDA). The spending figures are part of APPA’s annual comprehensive report that covers pet spending in the market categories of food, supplies/over-the-counter (OTC) medications, veterinary care, live animal purchases and other services.
“The pet humanization trend is alive and well and continues to drive growth at the premium end of the market,” said Vetere. “As millennials prepare to take the reins from the baby boomer generation as the primary demographic of pet owners, they stand to further develop this trend.”
Pet services, which includes grooming, boarding, walking, training, pet sitting, exercise and yard services for our pampered pets, saw the largest growth again this year and more than tripled the growth percentage of any other category. Coming in at an 11.8% growth from 2014 to 2015, we are now spending US$5.41 billion on pet-related services. Second only to pet services growth is spending on supplies/OTC meds (3.9% growth to US$14.28 billion).
“The use of pet medications and supplements to ensure longer, healthier lives for pets is increasing, thus somewhat offsetting any lower income growth for vet services,” added Vetere. “The market for these medications has entered a period of redefinition and renewal including considerable investment action; they are now being offered in a variety of channels, like mass market outlets as well.”
Spending on supplies/OTC meds is heading toward an estimated US$14.98 billion for 2016, making it the third highest spending category, behind food and narrowing the gap on veterinary care spending. Pet supplies in this category may include such items as beds, collars, leashes, toys, litter, bedding, food and water bowls, clothing and other accessories.
The food category still remains by far the leading source of dollars spent within the industry. Pet owners have begun to scrutinize the treats they buy even more closely, and interest in natural, locally sourced ingredients has never been higher. Along with quality, value continues to be a driving factor with pet owners looking for more value for their dollar in the form of treats that provide additional health benefits such as dental care or joint care. Although the aforementioned highlights consumer behavior trends, ongoing category growth comes mainly from rising prices and not from a larger volume of pet food being sold.
And while veterinary care spending only grew 2.5% from 2014, it remains the second highest source of spending. For the second consecutive year, there was also a slight decline in live animal purchases, however the gap is narrowing but is also expected again in 2016. Vetere says likely reasons for this trend range from a decline in pet types available from shelters or breeders, to a growing number of pet sale bans, and longer pet life spans due to improved health care.
“The 2016 industry spending forecast is very promising and although spending trends in various market segments ebb and flow, the industry as a whole is continuing to prosper, which is always great news,” said Vetere. “And, with increased research on the health benefits of pet ownership, we anticipate even higher industry sales in the years to come.”