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Pet care in the US

Despite high inflation and Covid-19 pandemic, spending on pets has remained steady over the last two years, in the US.

Executive Summary

The pet care market performed extraordinarily well amid uncertainty and a slow-paced economy in the US. Pre-pandemic, the pet industry was prospering quite well. Pet adoption increased during the pandemic as people looked for comfort and companionship. Today, 70% of US households own a pet.

The pandemic motivated large players to strengthen their portfolio of products and services with aspects like health and nutrition that appealed more to pet owners. High inflation in the US hasn’t impacted pet owners' spending on their pets, which has remained steady over the last two years.

US pet care market

With nuclear families being the norm, pet adoption and espousing them as family members have been driving the growth of this market. According to the 2021-2022 American Pet Products Association (APPA) National Pet Owners Survey, 70% of U.S. households (90.5M) own pets. Chart 1 shows the number of households in the US who own pets.

Chart 1

Majority of households in the US own dog and cat
(Million Households)

The chart shows the number of households in the US who own the pet

It is estimated that the global pet care market was around USD 261B in 2021 and the US accounted for USD 79.3B of it. With respect to expenditures on pet care, according to the American Pet Products Association, the US market increased by 19% in 2021 and reached USD 123.6B.

Pet Food and Treats leads the US market in terms of sales with a 41% share, followed by Veterinary Care and Product Sales (28%). Other Pet services which account for 8% of the total sales include grooming, training, boarding, insurance and pet sitting/walking (Chart 2).

Chart 2

With 41% share, Pet Food and Treat dominated the total
sales in the US market in 2021

The chart shows sales in the pet market in the US

Retail sales of pet care products is 64% of total sales; online sales accounts for the rest. PipeCandy estimates that 1.4% of US eCommerce companies are in Pet Care and contribute 1.9% to the total GMV.

While a majority of eCommerce companies are in the long tail, few are enterprise companies and contribute significantly to the category’s GMV (Chart 3). The GMV per merchant is high among the enterprise players, dominated by retailers, marketplaces, and specialty eCommerce players.

Chart 3

US Enterprise eCommerce: Few omnichannel Pet Care brands and
retailers vie for a small market share

The Chart does not include marketplaces like Amazon and multicategory retailers. The size of
the bubble corresponds to total size of the market (Annual GMV)

The Mid-market segment of Pet Care in the US is small. The number of merchants are fewer (compared to other product categories) and their average GMV is also lower (Chart 4).

Chart 4

Mid-Market US eCommerce: Pet Care merchants have the lowest
annual GMV per merchant

The size of bubble corresponds to the total size of the market (annual GMV)

Amazon and other players in the market

Pure players like Petco and PetSmart had traditionally dominated the pet care market. Amazon debuted in 2018 with the launch of its first private label, Wag, in pet food, and launched two more brands in dog food to be sold exclusively on its platform.1

The Covid-19 pandemic fast tracked the adoption of the eCommerce route and online sales of pet products soared. According to Insider Intelligence, as of February 2022, Amazon’s pet products with USD 7B in sales experienced a Y-o-Y growth of 21% and accounted for 1.6% of its eCommerce sales2. Amazon dominated the online pet market with a 45% share in 2021, followed by Chewy + PetSmart (37%) and Petco (7%)3.

Pet food leads the pet care market sales

Pet food products are formulated to ensure palatability while fulfilling the nutritional requirements of the pets. Some pet foods are specifically designed to boost immunity, weight control, reduce skin ailment and allergy risk, etc.

The global Pet Food and Treats market is USD 70B (2020), and the US market is around USD 50B (2021). Within the treats and chews market, indulgent treats have the highest share, followed by long lasting chews (Chart 5). In 2021, Chewy’s consumable sales was USD 6.1B and Petco’s was USD 2.5B.

Chart 5

Indulgent treats leads the treats and chews market

The chart shows sales in the pet market in the US

High-end pet grooming market

There has been an increase in pet owners seeking pricey grooming products and services. In 2021, while the global pet grooming market was USD 16B, the US accounted for approximately USD 11B. The grooming market will include pet shampoos, conditioners, combs, shavers or razors, and nail clippers.

Demand for pet toys for entertainment

The trend towards pet humanization and accepting pets as children have supported the growth of the market for pet toys. Treat and puzzle toys, customized toys, chewy toys, and DIY toys are catching customers’ attention. In 2021, the global pet toys market was USD 2.6B. In 2020, the US accounted for approx. USD 668.2M. Amazon’s revenues from dog toys in Q1 2022 was USD 48M, almost double that of cat toys (~ USD 26M).

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Pet health has become the utmost priority

As owners get increasingly conscious of the health of their pets, organic and nutritional products have become one of the fastest growing sub-product categories. The owner’s desire for a healthy lifestyle is mirrored in pet care products like wearable fitness and health trackers, supplements, specialty pet food, and pet insurance. The pet health and wellness sector attracted investors' attention and a record number of deals were signed as consumers are willing to invest in pet’s health and long-term treatment plans.

In 2021, the US spent USD 34.3B on veterinary care and USD 29B on supplies, live animals, and OTC medicine.

Accessories to soothe and calm the pets

Pet accessories may include pet furniture such as beds, sofas, outside houses, trees, and other hard goods and supplies. Accessories are specialty products, usually high priced and designed to give solace to pets. They provide comfortable surfaces for sitting and sleeping and vary from standard beds, donut beds, and orthopedic beds to having features such as temperature control adjustments.

In 2021, the US pet furniture market was estimated to be around USD 827M. In 2021, Chewy’s hardgoods sales amounted to USD 1.3B and Petco’s services and supplies and companion animals’ sales amounted to USD 3.2B.

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