How Changing Demographics Can Offset Lags in Pet Ownership Growth
Married couples without children or other people in the household are a burgeoning demographic of pet owners.
I cannot count on the fingers of one hand, or probably even two, the number of times I’ve said something to the effect of “the U.S. pet population is not growing fast enough to sustain healthy pet market growth based on volume sales gains.” For the better part of a decade, the follow-up has often had to do with premiumization—converting pet owners to higher-priced fare to drive dollar sales—allaying, to some degree, the worry of lackluster pet population increase. As the new year rings in, however, premiumization has peaked across many areas of the U.S. pet market, while pricing pressure has ballooned due to the widespread availability of formerly pet-specialty-only type products in mass channels (aka mass premiumization) and e-commerce, so the ongoing reality that the U.S. pet population remains relatively static represents growing cause for concern.
From 2009 to 2014, the number of households owning pets increased 5.8 percent, while the five-year period spanning 2014 to 2019 yielded 4.9 percent growth, basically just keeping pace with U.S. households overall, according to data from Packaged Facts and MRI-Simmons reports. From 2016 to 2018, the percent of U.S. households owning pets declined from 56.1 percent to 54.1 percent, and the number of households with pets fell from 67.8 million to 66.6 million. As of spring 2019, the figures had rebounded, but only a little, with 68.4 million households, or 55.1 percent, owning pets.
Ownership trends vary by type of pet, with dogs doing better than cats and other pets—good news because dogs are the market’s most important component from a dollar perspective, accounting for more than two-thirds of pet industry sales. But even canine-wise, the showing isn’t spectacular. From 2009 to 2019, the percentage of households with dogs rose from 36 percent to 40 percent, while the number of dog-owning households rose 21 percent, from 41.1 million to 49.7 million, according to data from Packaged Facts and MRI-Simmons reports. Alarmingly, household ownership of dogs fell from a 10-year high of 40.9 percent in 2016 to 38.2 percent in 2018, before partially rebounding to 40 percent in 2019. During the 2009-2019 period, the number of dog households seesawed slightly as a matter of course, but the 2016-2018 drop was beginning to look like a trend, so fingers crossed that the 2019 bounce is the start of a true reversal.
Cat ownership trends, however, differ from the canine set. Household ownership of cats peaked at 26.9 percent in 2012 and has since hovered in the 24 percent-25 percent range, according to data from Packaged Facts and MRI-Simmons reports. This performance places the number of cat-owning households on about the same level in 2019 as it was in 2009, at 30.5 million versus 30.4 million, respectively.
For all other types of pets (small animals, birds, fish and reptiles), reports indicate that ownership growth is sluggish. As of 2009, 14 percent of U.S. households owned these pets, but by 2019 that figure had fallen to 11.9 percent, placing the number of “other pet” households 8 percent lower in 2019 than in 2009 (14.7 million versus 16 million), according to data from Packaged Facts and MRI-Simmons reports. The only positive is that most of the loss occurred earlier in the period, and that as of 2019 the percentage of “other pet” households is up slightly from its 11 percent nadir in 2015.
The slow growth in household ownership of pets makes those households that do own pets all the more important as consumers of pet products and services, and drilling down demographically reveals a number of promising trends:
• Boomers and Seniors: Fortunately for the pet industry, Americans in the 55-and-over age group are much more likely than their predecessors to hang on to the companionship of pets as they age. For both the 55- to 74-year-old age group and the 75-plus group, pet ownership rates are higher than they were 10 years ago, with the pet-owning share of 55- to 74-year-olds growing from 48 percent to 52 percent and the pet-owning share of those age 70 and older rising from 31 percent to 33 percent. This trend has resulted in a significant increase in the purchasing power of 55-and-over pet owners. Although gen X consumers spend the most on pets on an average-per-household basis, the aggregate annual amount boomers and seniors spend on their pets totals $40.8 billion and represents nearly half (47 percent) of total aggregate expenditures, based on the Bureau of Labor Statistics Consumer Expenditure Survey (CE) data. The growing role of older consumers in the pet market underscores the trend of group-living facilities increasingly welcoming pets, as well as the need for products designed to lighten the pet care load and those designed specifically for smaller dogs and cats.
• Affluents: From 2008 to 2018, the percent of pet owners with a household income of $100,000 or more increased from 31 percent to 40 percent. The average amount households in the top 10 percent income decile spend on pets is seven times the amount spent by households in the lowest income decile ($1,437 versus $200). Households in the top 20 percent of household income spend $35 billion annually on pets in aggregate, or 40 percent of the total. For many years, marketers and retailers have relied heavily on affluent pet owners to drive premiumization, and there is still room to woo these top-tier income pet owners with higher-priced products and services offering distinctive convenience and health benefits.
• Hispanics: Pet owners today are much less likely to be non-Hispanic white than they were 10 years ago (72 percent in 2018 versus 78 percent in 2008). Between 2008 and 2018, the number of Hispanic, African American, Asian and other multicultural pet owners increased five times more than non-Hispanic white pet owners (10.7 million versus 2.1 million). Hispanics have become a core component of the pet-owning population, with expenditures on pets by Latinos more than doubling between 2014 and 2018, from $3.9 billion $8.8 billion. More than 70 percent of Latino pet owners are either U.S.-born or bilingual or English-dominant foreign-born, and whether in English or Spanish, pet marketing programs must fully embrace this burgeoning demographic.
• Couples With Pets/Without Kids: Also on the rise are pet owners without children in the household, whose share of all pet owners increased from 58 percent in 2008 to 62 percent in 2018. Underscoring their importance as a lucrative pet industry segment, CE data show that the pet expenditures of married couples without children and with no other persons sharing their household ($937) substantially exceed those of married couples with children ($753), single person and other households ($482), and households consisting of a single parent with children ($390). Households consisting of married couples without children make up 27 percent of all households but are responsible for 38 percent of aggregate expenditures on pets. Their pet expenditures total $35.3 billion annually, substantially more than the amount spent by married couples with children ($29.9 billion). Married couples without kids who own dogs offer a good example of how consumer behavior on the part of pet owners is likely to evolve, being more likely than dog owners on average to enjoy buying products that pamper their dogs.
• Millennials: In the aggregate, households headed by gen Zs and millennials spend only half as much on pets in aggregate as boomer households—$16.6 billion versus $34.4 billion—based on CE data. Nevertheless, much has been made of gen Z and millennial enthusiasm for pet ownership, and rightly so since younger pet owners are more likely to have younger pets acquired more recently. The combination of younger, recently acquired dogs or cats leads younger pet owners to have a more immediate need for pet products of all kinds. According to MRI-Simmons, dog or cat owners in the 25- to 39-year-old age group are more likely than their older counterparts to have purchased in the past 12 months numerous types of durable pet products that often represent a plunge into new pet ownership, including beds; bowls, feeders and waterers; carriers, crates and kennels; grooming supplies; and toys.
Annual advances in the number of new pet households is expected to slow from 1.1 percent for dogs and 1 percent for cats in 2019 to 0.9 percent for dogs and cats alike in 2023, and it should go without saying that slow to no growth in pet ownership portends a similar scenario for pet industry growth.
Committing wholeheartedly to pumping up pet ownership—by launching a long-term media campaign underscoring the human health benefits of having a pet, for example—should be the industry’s No. 1 priority. Meanwhile, while it’s not a panacea, meeting the increasingly specific needs of the U.S.’s evolving pet-owning demographics is crucial.
David Lummis is the lead pet market analyst for Packaged Facts, a division of MarketResearch.com, and author of Packaged Facts’ annual U.S. Pet Market Outlook report. The above data and analysis are derived from Packaged Facts’ most recent pet market report: Pet Population and Ownership Trends in the U.S., 3rd Edition.