Spending an exorbitant amount on your pet has now become the norm. Spoiling your pet with extravagant toys, housing, and top cuisine was something seen on an episode of “Lifestyles of the Rich and Famous” (Apologies for the ancient 1980’s reference.) Pet spending according to a recent finding by the American Pet Products Association reported that pet spending in the United States was at $69.51 billion, up 4 percent from the previous year.
Within their report were other interesting findings. Source
Spending on veterinary care in the U.S. increased 7.0 percent between 2016 and 2017, from $15.95 billion to $17.07 billion. Estimates claim that spending will increase another 7 percent in 2018.
Spending on pet food increased 2.9 percent to $29.07 billion in 2017. For pet supplies and over-the-counter medications, spending increased 2.7 percent to $15.11 billion.
Spending on services such as grooming, boarding, walking, training, pet-sitting, and exercise increased 6.9 percent to $6.16 billion.
With all these numbers presented, it’s plain to see that the pet industry is booming. People are spending as much on their pets as they would on their own children. And in many cases, pets are taking the role of children. No other generation is this evident than with Millennials (Born between 1985-2000).
Pet Spending Among Millennials
A recent trend among Millennials is they are delaying marriage and having fewer kids. This moved the object of their attention and attachment to their pets, to the degree that they are being humanized. In regards to the pet industry, Millennials are willing to spend more money on things like premium pet care and services along with higher grade food products.
Among Millennials and others who see their pets as children, excessive spending is not considered “discretionary spending”. It is an absolute must even when other expenses are at hand. According to experts, people are willing to give up other expenses to cater to their pets. This fact leads to believe that the pet industry is one that will remain stable even during a difficult economy.
A shocking report from a TD Ameritrade survey of 1,500 Millennials stated they were willing to spend more on their pet’s health care than their own. And close 70 percent of the Millennials surveyed were willing to take time off to care for a new pet if their employer offered it as a perk.
Pet Industry Seeking New Marketing Avenues
Humanizing pets is most prevalent on social media where many pet profiles have sprung up especially on Instagram and on Youtube. Pets are front and center on many of these profiles and channels and some of them create revenue for their owners from sponsorships and product placements. What we are seeing is that the pet industry is expanding their marketing efforts beyond conventional print and television, they are placing their budgets into the lucrative medium that is social media.
Investment firms and venture capital are seeing this trend. Over the past five years, more than $500 million has been invested into pet related technology startups. Chewy, Wag, and even our own company, Eusoh, are companies that are building and thriving from the interest coming from investors. Pet insurance, medicine distribution, and veterinary technology are also getting attention from investors and adding to the lucrative pet market. Source
Even well-established firms are making a move into the pet market.
General Mills and JD Smucker, well-established and storied food manufacturers recently dove into the pet food market.
Amazon, whose rise came from books to now becoming the predominant giant in online retail, welcomed their Wag brand of pet food with much fanfare at the beginning of 2018.
Zoetis, the largest producer of pet medicine, recently acquired Abaxis, a large provider of veterinary technology.
Nationwide, one of the largest insurance companies in North America has a pet insurance branch.
Well-established firms, investment groups, and entrepreneurs are making a move into the pet industry. The consumer base is growing by the day. Independent, specialized pet food brands are now competing with giants like General Mills and Amazon and against established brands like Purina (Nestle). Protection platforms like Nationwide and Trupanion are gaining membership and startups like Eusoh, Wag, and Chewy are also on the rise. Pet spending, especially from Millennials, is increasing greatly every year and with investors and industry throwing their hat into the pet market, it’s plain to see that this sector is promising a lot of financial growth and returns.