$45.4 Billion Spent on Pets: Where’s The Money Going?

Pet loving consumers have ensured that the pet industry’s projected sales of $45.4 Billion in 2009 have not been slashed by the Bear market. According to the American Pet Product Association, there is hardly a scratch to be seen in spending on pets as all 5 categories have increased over 2008 numbers. While high-end specialty stores will see profits decline, there are gains in spending on quality foods, beds, and leashes. Value for money is what the public will be looking for in 2009/2010.

Consumers also reward businesses that get creative with their product lines. Wal-Mart announced back in 2005 that they wanted a 30% market share of the pet product industry, and in mid-2008 they had captured 25% of the market despite being virtually invisible in big city markets. You can thank the 20% average savings per item for that. Still, Wal-Mart is not your corner store, like PetSmart, still #1 in the market, with Petco following at #2. As much as children do not go without toys in a recession, neither do cats or dogs:)

Pet stores big and small have added more expensive organic and natural food brands to their product offerings as a result of the pet food recalls, seeking in part to show good faith and regain the trust of their clients. And consumers are glad to see it.

The $45 Billion are US numbers only; I’d probably faint if I saw the international numbers. Yet, most shelters will tell you, it costs $1200 a year at the low end of the scale to keep a dog if you live in an urban area, and that’s only if nothing much goes wrong and you don’t use daycare and other perks. Here’s how we pet people spend all that money:

For 2009, it estimated that $45.4 billion will be spent on all pets in the U.S. in these categories:

1. Food………………………………………………………………….$17.4 billion
2. Supplies/OTC Medicine…………………………………..$10.2 billion
3. Vet Care……………………………………………………………$12.2 billion
4. Live animal purchases……………………………………$ 2.2 billion
5. Pet Services: grooming & boarding………………….$ 3.4 billion

We will see ever increasing costs in veterinary care due to the influx of human medicines, surgical procedures, and advanced technologies applied to pets. Food costs will probably increase in the search for human grade/best practices brands customized to nutritional needs of pets as they age.

According to the 2007-2008 APPA National Pet Owners Survey, basic annual expenses for dog and cat owners in dollars include: (most recent published figures available)

……………………………………………..Dogs    Cats
1. Surgical Vet Visits                453      363
2. Food                                          217      188
3. Kennel Boarding                   225      149
4. Routine Vet                            219      175
5. Groomer/Grooming Aids      127        18
6. Vitamins                                   77        31

7. Treats                                          66       40

8. Toys                                             41        26

Breakdown of cat and dog ownership in the U.S. according to the American Pet Products Association 2009-2010 National Pet Owners Survey

Number of U.S. Households that Own a dog or cat (millions)
Cat     38.2
Dog    45.6

Total Number of dogs and cats Owned in the U.S. (millions)
Cat    93.6
Dog    77.5

(All statistics gathered from American Pet Products Association)

Cultural shifts are part of the reason for the veterinary and pet product usage increases, as empty nesters and childless couples adopt and take their roles as pet parents seriously. The human/animal bond in the US has been changing for the last few decades, and now even home builders are making special efforts to include pets in their design plans.

Organic and green products are relatively new areas of growth, as with the influx of celebrity and cause marketing. Insurance is a fast growing, high-margin product with plenty of room to run, currently only 1% of the market. As vet costs burgeon, so too will pet insurance policy sales. Online pet medical companies are also gaining ground, as over the counter meds get more expensive.

People do a lot of cutting back in recessions, but when there’s love as an added factor I think the pet industry can feel more assured than most retailers in the strength of their customer base.

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Tagged as: $45 Billion on Pets, Annual Pet Costs, Pet cost trends, Top 5 Pet Costs