There has been a pandemic pet boom! Spending on Pets grew 19.3% to $123 billion last year, according to packaged Facts, a much faster pace than the growth seen in 2019. Consumer research firms are estimating that the annual growth rate will compound at ~10% until 2026. This acceleration has been somewhat explained by the fact that there were 6.9 million more dogs in the US in 2020 compared to 2016, according to the American Veterinary Medical Association.
There is also another trend: the so-called “humanization” of pets that has led owners to opt for premium and fresh foods for their four-legged friends.
Early indications show that people are more inclined to trade down their own food for cheaper options rather than trade down the quality of their pet’s kibble. In February, the APPA surveyed that roughly 70% of pet owners view their pet diet as important and don’t plan to make changes regardless of what happens to the economy.
While the pet boom category continues to grow, competition for those dollars has only ramped up. Larger conglomerates, like Petco and Chewy, are making investments in healthcare to boost dollar share with customers. Petco is remodeling stores to expand its offering to both Veterinary Care and Grooming. Chewy recently announced that it will launch a wellness and insurance program, furthering the competition for market share of the growing petcare frenzy.