Was the growth of the pet industry due to the pandemic a good thing in the long run?
The pet industry is in great shape so far in 20244. According to Michigan State University, the overall economic contribution of the pet industry in 2023 was $303 billion, an increase of 16% from 2022. According to Bolen Group, weekly sales of pet care products through February 2024 are growing three times faster than any other product. is a fast-moving consumer goods category, and the largest industry trade association expects industry revenue growth to be nearly 3% in 2024.
According to the Human-Animal Bond Research Institute, 98% of pet owners say their pets are an important part of their family, 87% say owning a pet improves their mental health, and 76% say their pet is an important part of their family. He says it has improved his personal health. . With the trend toward humanizing pets, the growth of the industry is natural, even inevitable.
Few other industries have such strong growth drivers.
And yet. Many factors are causing concern regarding the future of the pet business.
pandemic
The pandemic itself has been great for the pet industry. As anxiety and depression exploded due to the shutdown, demand for companion animals increased. Many shelters were short on pets. According to Statista, 70% of U.S. households owned a pet in 2020, a record high. According to The Bolen Group, pet industry revenues more than doubled from 2018 to 2024 (forecast).
But the end of the pandemic wasn't all that good for the industry. Jeff Picken, CEO of Beaumont Products, which offers products to prevent kitty litter odor, said consumers are looking for better pet products and extra odor control while staying home during the shutdown. He says he was looking for But demand declined once the government shutdown ended and people spent less time at home with their pets. It happened in many companies.
Paul Armstrong, CEO of pet grooming products company Earthbath, said the industry is “in a post-COVID-19 reset, with supply chain issues still impacting manufacturing. ” he said.
Some of the pandemic-era growth appears to have been borrowed from the future, potentially having a dampening effect on current growth. After the pandemic, many owners gave up their pets. According to Statista, pet ownership will drop to 66% of households by 2023.
cut back
Demand is falling not only because fewer households own pets, but also because pet owners are trying to save money.
Although inflation is subsiding, consumers still judge prices by the things they buy most often, such as gasoline, milk and other necessities. These prices are high by historical standards, so consumers are discounting them. Chuck Latham of pet health products maker H&C Animal Health calls this “petflation,” and it's a major cause of consumer concern. Consumers have become “cheap product-oriented.''
According to an American Pet Products Association (APPA) survey of more than 10,000 pet owners, 19% of pet owners said they will spend less on their pets this year than last year. In 2020, that percentage was 9%.
Look at the food. According to APPA, sales of premium cat food exceeded basic cat food from 2018 to 2020, but now basic is outselling premium. When it comes to dog food, Premium and Natural go down, and Basic goes up. Zell Crampton, CEO of luxury pet crate maker Diggs, said ultra-premium customers are looking to downgrade their premiums rather than move to basics.
According to Bolen Group, private label brands are almost the only pet category currently seeing an increase in sales. As with human products, consumers are looking for ways to spend less, and that means buying fewer branded products and more private label products.
Dennis Troiano of Nerf Pet, a licensed pet toy business, talked about working smarter. “Less pet ownership will make business more difficult, but more flexible companies will be weeded out and innovators will win.” Michael London, CEO of the fast-growing pet products company Bow Wow Labs, says, “If we don't support pet health, we won't do it,” and it's not just about increasing sales. Ta.
Adjust to change
As pet industry growth slows and consumer spending declines, a closer look at other consumer industries may explain the path the pet business will take.
Similar to other industries, TikTok is the fastest growing source of information about new pet-related products, making it the “most important source of new information” for Gen Z, according to APPA. To be successful on TikTok, you can’t just use the same content you’ve always had. Posting to Instagram or Facebook requires new skills.
The industry also needs to shift its focus from premiumization to more affordability. More economical ways to shop, bundling products and programs to promote consistent cost savings will be very appealing to a significant portion of pet owners who are currently feeling the pinch.
As employees return to the office, the pet industry needs to support pet-friendly companies. Allowing more pets into the workplace is a free way for consumers to get more value from their pet spending. According to APPA, pet-friendly employers are 32% more likely to attract, hire, and retain employees.
New thinking around marketing strategies, better engagement with pets, and a focus on affordability will help the industry survive this new and challenging period. Without these changes, it will be harder to withstand the fallout from consumers who feel squeezed.
