Americans see their pets as family – and are spending more cash on them
As people increasingly humanize their pets, spending on them is set to grow. A new report from consultancy EY-Parthenon examines how Americans view their pets, while also investigating what categories in the pet industry are growing, as well as where Americans will purchase their pet supplies in the future.
People are increasingly humanizing their pets, viewing them as furry little members of the family. This is leading consumers to spend more money on fancy food, treats, clothing, and an array of premium services such as grooming and pet spas.
This could mean a potentially explosive market for the $70 billion US pet industry. According to the American Pet Products Association, the US pet industry has grown from $17 billion in 1994 to $70 billion last year – and trends seem to point to good times ahead for the industry.
Pets are extremely popular among millennials, who have higher rates of pet ownership than other age brackets. 75% of Americans in their 30s have dogs, while over half have cats, according to research firm Mintel. This compares to an overall rate of 50% dog ownership and 35% cat ownership in the US.
Some psychologists point to high millennial pet ownership as a type of substitution for human children. In contrast to previous generations, many millennials are delaying having babies, buying homes, and buying cars. But they’re not delaying having pets, and those pets are more frequently seen as a part of the family, whether they’re a baby replacement or not.
A recent survey from management consultancy EY-Parthenon reinforces the increasingly ‘human’ way that Americans view their pets. According to the survey, 72% of Americans consider their pets to be family. A further 96% say they let their pets sleep inside the house, while a further 32% say they let their pet sleep on a human bed.
EY-Parthenon’s parsing of APPA data has also revealed that pet expenditures are increasing steadily, especially in other services like pampering and wellness. In the chart above, ‘other services’ grew to over $6 billion. According to data from Wakefield Research, three-quarters of millennials said that they are more likely to ‘splurge’ on their pets than themselves – which will mean more expensive treats, more fancy natural food, and more trips to the doggy spa.
In the chart above, we can also observe higher expenditures on food from 2010 to 2017. Though it could partially reflect increasing rates of pet ownership, the increase also could reflect a greater propensity of owners to buy better, more expensive, natural and/or organic food for their pets. EY-Parthenon highlights that premium and natural food segments present especially promising opportunities for new entrants and brand building.
Curiously, though 7 in 10 respondents to a Mintel survey said that adopting a shelter animal is the best way to get a pet, live animal purchases increased steadily from 2010 to 2017. This trend may slow, however, as people align pet adoption with their social values, eschewing puppy mills in the way that an increasing amount of millennials avoid ‘unethical’ meat and embrace vegetarianism and veganism.
EY-Parthenon also highlights the way changing way that people will buy their more expansive and premium pet supplies in the future. Though 78% of people prefer to shop in a physical store, the consultancy expects e-commerce’s share to continue growing in the future. In the chart above, sourced from Euromonitor data, e-commerce share of pet supply purchase is projected to double from 2016 to 2021. EY-Parthenon links the expected growth to improving shipping economics as well as consumer convenience factors.
The consultancy also predicts that grocery stores, mass merchandisers (Walmart), and warehouse clubs (Sam’s Club, Costco) will increase the shelf space they have devoted to pet food and supplies. This will include an increasing share of premium and private label products in the pet food and supplies category.
