The Pet Care Industry is a Frisky Investment
October 22, 2015 Leave a comment
In 2013 United States consumers spent $55.72 billion dollars on their pets. Those figures are continuing to show steady growth, especially when earlier data is analyzed: Pet owners spent $28.5 billion on their pets in 2004. That’s a significant increase and has drawn the attention of pet care industry manufacturers who want to grow their businesses and investors looking for sustainable markets.
Increased spending on pets is not limited to the U.S. In Latin America the pet care market is also growing. It has been reported that Brazil will eclipse Japan as the second largest pet care market in the world, after the US. Investors with vision, and perhaps a much-loved dog or cat, have their eye on this market. Martin Escobari, Managing Director of General Atlantic’s Sao Paulo office, sees continued growth in this industry and is on the Board of Directors for Orofino Saúde Animal, a manufacturer offering products for pets and farm animals.
But where does that money actually go? Break down that $55.72 billion, and you’ll discover four categories that provide useful markets for investors in search of a niche:
- Pet Food: $21.57 billion
- Supplies and Over the Counter Medications: $13.4 billion
- Veterinary Visits: $14.37 billion
- Live Animal Purchases: $2.23 billion
- Grooming, Boarding and Other Services: $4.41 billion
The pet care industry is fueled by the change in relationship between pets and their owners. As pets become more commonly identified as members of the family—sometimes in lieu of children—owners spend more on their care and maintenance. Trends to watch include pet health and pet food.
Pet obesity is increasingly impacting pets in the U.S. This problem prompts pet owners to seek premium pet food that is often marketed as fresh, raw, or more nutritious than non-premium brands. Pet owners are increasingly purchasing pet food at grocery stores that market themselves as purveyors of natural or organic foods.
In Latin America pet care is a booming industry. Spending on pets there reached $11 billion in the last five years. Single people and young couples without children are being identified as “pet parents” and frequently treat their dogs to expensive grooming sessions featuring painted claws and special dog fashions such as designer shoes.
China is also part of the pet industry boom: 7% of the people own dogs, and 2% have cats. Middle class Chinese consumers without children prefer premium products for their pets. It’s not uncommon for owners to bring their pets to pet salons for specialized grooming sessions and even mud baths. One married couple in Shanghai, without children, reportedly spends an average of $600 a month for pet food and related services.
For additional insights into the pet care industry review this SlideShare: Trends and Insights in the Global Pet Care Market 2014