Pet Industry Spending Hits All-Time High
Overall spending in the pet industry has surpassed previous spending by more than $6 billion, according to the American Pet Products Association (APPA). Pet industry spending for 2016 came in at a record high $66.75 billion, up from $60.28 billion in 2015, or a 10.7 percent growth. APPA’s annual comprehensive industry figures report covers pet spending in the following market categories: food, supplies/over-the-counter (OTC) medications, veterinary care, live animal purchases and other services. Bob Vetere, APPA president and CEO, presented the findings during Global Pet Expo, which was held March 22 to 24 in Orlando, Fla.
“While this shows a significant increase over last year, it is more reflective of an adjustment in data reporting than actual growth,” said Vetere. “Actual growth when compared to previous reporting methods is closer to four percent. We do still expect growth in the category, although the growth percentage will level out again as we continue to access updated analytics from the same data report,” said Vetere.
A noticeable increase in pet food spending of 22.6 percent in 2016 is primarily due to APPA accounting for new data from the U.S. Bureau of Labor Statistics (US BLS), which indicated previous spending figures released may have been too conservative. With $28.23 billion spent, the increase in this category now accurately reflects the steady growth the pet food industry has experienced all along. Interest in high end, premium pet food and treats continues to be a key driver for increased spending in the pet food category.
Veterinary care spending remains the second source of spending in the pet industry at $15.95 billion. While routine veterinary visits have not necessarily increased, new advances in health care and services available may be contributing to the 3.4 percent growth. Additionally, there is growing research on the human health benefits of pets and research from the Human-Animal Bond Research Institute (HABRI) shows that the more pet owners become aware of the health benefits of their pets, the more likely they are to take care of them.
The third highest source of spending is in supplies and over the counter (OTC) medications. Up three percent from 2015, $14.71 billion was spent on items such as beds, collars, leashes, toys, travel items, clothing, food and water bowls, and other accessories. Live animal purchases continue to decrease for the third year in a row, down 0.9 percent to $2.1 billion in 2016.
Other services such as grooming, boarding, walking, training, pet sitting, yard services and more saw significant growth from 2015, second only to pet food category growth. While spending on pet services is behind the next closest spending segment by nearly $9 billion, category growth for the past few years is something to take note of. It is even estimated to grow another six percent in 2017—higher than expected growth percentage for any other spending segment.
“Now that millennials have officially taken the reins as primary demographic of pet owners, they stand to further develop the humanization of pets trend,” said Vetere. “We’ve been anxious to see how this new group of pet owners will affect the industry, and now that they’re here and the industry spending is higher than ever, it’s a promising sign that our country’s pets are in good hands.”