 "Pet care explosion: Why we're spending more on pets than children")
From vegan balms to gourmet meals, the pet-care industry is booming like never before. Dog by Dr Lisa, an Australian pet-care brand, offers sensitive skin cleansers, soothing balms, and even colognes — all free from genetically modified ingredients and entirely vegan. Though dogs aren’t naturally inclined to be plant-based, those with a refined palate need not worry. Butternut Box, a fresh pet food company, offers low-fat chicken dishes paired with peas, lentils, and a touch of sage — its most popular meal, taste-tested by humans themselves, The Economist reported.
Record spending on pets surpasses childcare
The lengths to which pet owners go for their furry companions are remarkable. Last year, Americans spent a staggering $186 billion on their pets, surpassing even childcare expenditures, according to the Bureau of Economic Analysis. From premium food to vet visits, toys, and grooming, catering to pets has evolved into a multibillion-dollar industry.
Mars, the chocolate giant, earned two-thirds of its revenue from pet-care in FY23, with holdings in Royal Canin and a vast network of vet clinics. Nestle and Colgate are also riding the wave, with nearly a fifth of their revenues coming from their pet-care divisions.
The pet-spending surge took off during the pandemic when isolation led many to adopt pets and pamper them. Between 2019 and 2023, pet spending increased at an annual compound rate of 11 per cent, outpacing overall consumer spending, which grew at 6 per cent. This trend shows no signs of slowing.
Pet care outpaces consumer trends
Unlike fads such as virtual yoga or meal-kit subscriptions, pets became permanent fixtures in households, even as lockdowns eased. Amid rising prices and a cooling job market, pet owners continue to indulge their companions. US brokerage Morgan Stanley estimates pet spending in the US will grow by 2.5 per cent this year, outpacing other categories like clothing. Notably, the pet-care industry proved just as resilient during the global financial crisis of 2007-09.
And it is only set to accelerate. Morgan Stanley projects that pet spending will hit $260 billion by 2030, maintaining its pre-pandemic growth trajectory. This surge is driven by a shift in how people view their pets — not as mere animals, but as family members. “Pets have gone from the backyard to the living room to the bedroom,” Loic Moutault, head of the pet division at Mars, was quoted as saying by The Economist.
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Millennials and Gen Z fuel the ‘fur baby’ trend
This shift is evident among Millennials and Generation Z, who are delaying having children but embracing “fur babies” in larger numbers than any other generation. Kristin Peck, chief executive of Zoetis, a leading animal pharmaceutical company says, “Millennials and Gen Z see their pets differently — they are family.”
For pets lucky enough to be part of these modern families, the perks are plentiful. Younger owners may take their pets to the vet more often, but they also shower them with gifts. A 2022 survey by the American Pet Products Association found that 95 per cent of Gen Z dog owners bought their pet a gift at least once a year, with an average spend of $44, compared to $17 among baby boomers.
Premium food is also on the rise. Freshpet, a natural pet food company, has seen sales more than double in the past three years. William Cyr, Freshpet’s CEO, attributes this to the ‘humanisation’ of pets. “Canned dog food was invented in 1922. And it smells like it,” he said.
Investment in pet care grows
This booming market is attracting fresh players. Private equity firms have invested heavily in veterinary clinic chains, drawing the attention of antitrust regulators in the United States and Britain. Even Givaudan, a Swiss company that leads the world in flavours and fragrances, is eyeing the pet-food market. As its CEO Gilles Andrier put it, “People spend more on pets than on kids these days.”
It seems everyone wants a dog in this fight.
It seems everyone wants a dog in this fight.