Clear signs of growth in the pet industry abound, and
certain indicators are particularly notable in 2018.
18 Reasons to Bet on Pet
By David Lummis
The U.S. pet industry is evolving at such warp speed that it’s easy to become uneasy. The internet and information technology generally, and Amazon in
particular, are breaking down boundaries and opening
up areas of competition that have many market veterans
scratching their heads. At the same time, the industry
overall has resumed robust growth levels, and there are
plenty of reasons to celebrate in 2018 and beyond. Not
every area of the market is growing by leaps and bounds,
and not every development is good news for every market participant. Taken together, however, there are pockets of growth for every marketer, retailer or service provider to sharpen their strategies around.
Enviable Sales Growth: U.S. pet industry sales rose 5 percent
($4.1 billion) in 2017 to reach $85.6 billion—impressive
growth for a mature consumer packaged goods (CPG)
market. Burgeoning online sales and strong numbers in
veterinary services and pet food/treats contributed, with
sales of pet food and treats topping $33 billion.
Loosening Purse Strings: In the past several years, approximately one-third of the pet-owning population reported
reduced spending on their pets, but that figure dropped
to 20 percent in early 2018, reflecting economic optimism.
E-Commerce Boom: Disproportionately responsible for
helping to keep the U.S. pet industry on an upward track,
internet sales of pet products jumped to $6.3 billion in
2017 and are expected to double by 2022.
More Pet Households: The percentage of U.S. households
that owns pets has held steady over the last decade, hovering between 53 percent and 55 percent. But the number
of households with pets has grown as a function of population growth, as has the relative share of owners of the
higher-spend “pet children,” namely dogs and cats.
Millennials: Knowing no other way than “pets as family,”
millennials continue to follow in the pet-loving footsteps
of aging boomers. Millennials are both big online shoppers and brick-and-mortar fans, spending $1,285 a year
on their dogs and $915 a year on their cats, according to
Senior Pets: More than two-fifths (42 percent) of dog
owners have a dog age 7 or older, while 44 percent of
cat owners have a cat in that age bracket. Older pets represent greater need for the kinds of specialized health
services and products now benefiting from technological
advancement and human cross-over.
Other Pets: The pet industry has profited from a “decade
of the dog,” plus a recent uptick in cat ownership, and
the shares of pet owners who keep fish, hamsters, rabbits
or reptiles are currently showing some signs of notching back upward toward historical norms. From 2015 to
2017, fish/small animals/reptiles’ share of pet owners
rebounded five percentage points, from 17 percent to 22
Technology: Reflecting the advance of e-commerce, tech-
nology has become a core market driver in pet products
and services, as seen in categories including tracking
systems, home monitoring systems, and interactive treat
dispensers, feeders, water-
ers and toys.
Wearable Trackers: Devices
including collars and tags
are enabling pet owners
to track via computer or
smartphone not just the lo-
cation of their pet, but also
its vitals, and to interact
directly with veterinarians
and other pet care service
providers. Sales of wear-
able pet technology, includ-
ing sensors, GPS and RFID
products, are projected to
reach $900 million in 2022,
according to Statista.
Smart Services: Once again
mirroring trends on the hu-
man side, Uber-like, smart-
are taking pet sitting/dog
walking and pet boarding by storm, led by Rover and Wag!
Smart Products: Automatic feeders and litterboxes are in-
corporating service functions such as the ability to alert
pet owners to pet behavior and product replenishment
needs, reorder supplies automatically via Bluetooth/in-
ternet, and let pet owners communicate with their pets—
and vice versa.
Subscriptions: When it comes to online ordering, sub-
scriptions are where it’s at, and the most successful pet
product e-tailers pushed subscriptions earlier and more
often. Chewy and Amazon offer discounts to encourage
auto-replenishment, and Ollie and The Farmer’s Dog are
following in the footsteps of Blue Apron and Plated. In-
ternet-based startups are offering customizable boxes of
pet supplies, including Petco’s recently acquired PupBox,
along with BarkBox, whose themed subscription box fea-
tures all-natural treats and toys.
Private Label: Private label has long been an integral but
sometimes underperforming part of the pet market. Now,
however, private label is becoming a possibly make-or-
break differentiator among retail channels. As a sign of
the times, Amazon’s new Wag dog food takes multiple
pages from high-end pet specialty fare, as do any number
of mass-market store brands.
Pet Specialty Services: Brick-and-mortar-based pet spe-
cialty retailers and marketers looking to insulate against
e-commerce are turning to pet care services, including
Petco with Thrive Affordable Vet Care and PetSmart with
its new Groomery shops, a strategy that could open up a
new era in one-stop pet care.
Pets as Family: Stronger than ever, the “pets as family”
trend drives not just pet owners’ desire to pamper their
pets, but also their commitment to pet health. Three-
fourths of pet owners agree that “I am willing to pay more
for pet food products that are healthier for my pets,” up
from two-thirds in previous years.
Digital Health: Rapidly advancing are internet-based plat-
form solutions to assist veterinary professionals with
practice management, diagnostics, and digital health ap-
plications and devices, that make it easier for pet owners
to diagnose and monitor their pets’ health.
Gifting: Pet owners’ focus is not just on pet health,
it’s also on pet wellness—extending to pets enjoying
themselves and having special occasions. More than
two-thirds (71 percent) of dog owners and cat own-
ers (68 percent) enjoy buying products that pamper
their dogs/cats, and more than half of dog owners (52
percent) and more than two-fifths of cat owners (43
percent) purchased special gifts or treats for their dog
or cat over the 2017/2018 Christmas/winter holiday
season. Holiday-themed promotions and merchandise
are nothing new. But expect pet gifting to become a
much bigger source of industry revenue as millenni-
al and gen Z consumers continue to come into their
Betting on Pet: Major marketers of products for people con-
tinue to look to pet to shore up their business—includ-
ing Mars with the veterinary sector, General Mills with
Blue Buffalo, and Smucker with Ainsworth/Rachael Ray
Nutrish—pumping new blood, bigger budgets and well-
honed consumer marketing expertise into the market and
keeping a spotlight on pet that should help to raise many
boats sailing in the right direction. •
David Lummis is the lead
pet-market analyst for
Packaged Facts, a division of MarketResearch
.com. The statistics cited here are drawn primarily from the latest
edition of Packaged Facts’
annual report, U.S. Pet Market Outlook, 2018-2019.
A bevy of converging
trends make for a bright
future for the pet industry.