The pet industry has been on a steady growth trajectory for several years, and there is no slowing down in sight. Here in the U.S., $136.8 billion was spent on pets in 2022, when only three years prior, it was $97.1 billion. From pet care to boarding to food, the various sectors within this industry are contributing to its dominating force, offering several opportunities for investors to jump in and take part in the success.
If you are interested in joining the industry as an investor, there is no time like the present. 2023 is a year filled with opportunities as the U.S. pet industry continues to ramp up, with total pet expenditures expected to round the year off at $142.6 billion.
To take advantage of this booming pet economy, there are some elements to keep in mind about the industry.
THE HUMANIZATION OF PETS
To better understand the pet economy, it is first important to recognize those driving its growth: the pet parents. Currently, 66% of U.S. households have a pet, which is approximately 86.9 million households (65.1 million of which are dog parents). There has been a rise in pet ownership, especially during the pandemic when 78% of pet owners acquired a pet, which has resulted the increased humanization of pets.
A recent survey found that 47% of U.S. pet parents treat their pets like children and 29% would prioritize their pet’s needs before their own. This survey also broke down the results by generation, with 54% of those between the ages of 18–34 saying they treat their pet like their child and 35% saying they put their pet’s needs above their own.
Those who fall into this age range are millennials and Gen Z, with millennials comprising the largest generation to own a pet in the U.S. They are also the ones to spend the most on pet care, especially when compared to baby boomers. Meanwhile, many of those between 18–34 plan on acquiring or adding a pet within the next five years. Millennials and Gen Z are accelerating the boom in the pet industry, with pet ownership expected to increase 14% by 2030.
With millennials and Gen Z driving the increased humanization of pets, investors have the opportunity to offer products and services that address some of the needs and wants that pet parents have for their furry family member. From personalized food plans to doggie daycare, finding business opportunities that provide a quality experience will appeal to pet parents in 2023.
THE RISE OF PET CARE & PET WELLNESS
According to the latest reports, the pet care market currently sits at $199 billion and is snowballing toward rapid growth. With a forecasted revenue of $338.5 billion by 2031, which is a 6.1% compound annual growth rate (CAGR), pet parents are willing to pay for high-quality pet care products and services for their pup.
If you want to take advantage of this booming economy, it is also important to recognize the increased focus on pet wellness. From purchasing birthday presents, high-end pet food, health monitoring devices, and more, parents are willing to spend money on their pets’ wellbeing. For instance, the global dog food market is expected to reach $82 billion in sales by 2025. Much of this growth (a 4.7% CAGR between 2022-2027) is attributed to pet parents prioritizing their pet’s health and seeking high-quality products. As a result, investors can find opportunities in business ventures that emphasize pet wellbeing in their business model.
PROVIDING MULTIPLE PET-RELATED SERVICES
By 2025, pet parents in younger generations are expected to spend $1,292 per month on their pets, a significant jump from 2020 when pet spending per household was $980 per month. This spending encompasses general care, boarding, grooming, and vet expenses.
To take advantage of this increased demand, finding a way to incorporate several pet-related services into one opportunity not only helps meet the needs of pet parents in a “one-stop-shop” type of business, but it also provides investors with multiple revenue streams and a chance to tap into multiple successful markets at once.
For instance, the global daycare and overnight stay market is forecasted to grow at a CAGR of 6.34% from 2021 to 2026, which translates into an increase of $8.6 billion in just five years. Much of this success is attributed to pet parents’ desire to secure safe, quality care for their pup, just as a parent would for their child.
Another growing pet industry market is grooming, forecasted to reach $11.2 billion by 2027, with a 7.5% CAGR from 2021 to 2027. Similar to the daycare and overnight stay market, pet parents want to provide their dogs with the highest standard of care and will spend the money to do so.
Combining the booming daycare, overnight stay, and grooming markets can provide investors with an excellent opportunity to find success. Dogtopia exemplifies this by providing franchisees with several streams of revenue from the multiple services provided at the locations.