APPA dives deep into pet industry trends, consumer behaviors in new report



STAMFORD, CONN. — On Nov. 28, the American Pet Products Association (APPA) released its new report, “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond,” to provide additional insights on its National Pet Owners Survey (NPOS). It breaks down statistical differences, generational trends and more in the pet industry.

From pet ownership trends to consumer spending behaviors to the industry’s economic impact, APPA’s new report covers the gamut of the entire pet and pet nutrition industries.

Respondents include owners of dogs, cats, fish, horses, reptiles, birds and small mammals, that were at least 18 years old. It also considers pre-COVID (2018), COVID (2020), and post-COVID (2022) data.

 

Pet ownership

According to APPA’s “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report, 66% of US households currently own a pet, which means that about 172.24 million adult consumers live in a pet-owning household.

Pet ownership levels have remained steady, despite financial and economic worries. In 2022, 66% of US households owned some type of pet, an increase from 62% in 2010. Dogs and cats remain the most popular pets in the United States, with 50% of households owning a dog and 35% owning a cat in 2022.

Forecasted pet ownership rates show continued success for the industry, as APPA anticipates that in 2024 69% of US households will own a pet, of which 52% will own dogs and 36% will own cats. Ownership levels are expected to dip slightly in 2028, with an anticipated 68% of households set to own a pet, 50% of which will own dogs and 36% will own cats.

Though the percentage of households may experience a miniscule “yo-yo” effect, the actual number of US pet-owning households is set to remain strong. According to the “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report, 87 million households owned a pet in 2022, an increase from 73 million in 2010. Sixty-five million owned dogs, an increase from 46 million in 2010, and 47 million owned cats, an increase from 39 million in 2010.

Looking to the future, the number of pet-owning households is set to hit 92 million in 2024, with 69 million owning dogs and 49 million owning cats. Ownership is then anticipated to reach 95 million US households in 2028, with 70 million owning dogs and 49 million owning cats.

In addition to strong ownership levels, APPA detailed that the amount of multi-pet households (that own two or more pets) has also steadily risen. In 2022, an estimated 66% of pet-owning households owned multiple pets, an increase from 63% in 2018. According to the association, this 3% increase can be almost entirely explained by Gen Z and Millennial households.

In 2022, 71% of Gen Z households owned multiple pets, an increase from 66% in 2018. Seventy-three percent of Millennial households had multiple pets in 2022, an increase from 67% in 2018. Gen X and Boomers’ multi-pet ownership levels are much lower.

With such a large pet population, the pet industry significantly contributed to the US economy in employment, earnings, income and national taxes. According to a study by Michigan State University, in 2022 the industry provided an overall economic contribution of $260 billion, an increase of 18% from $221 billion in 2015. Total annual household expenditures for pets, pet services and pet products amassed to $93.95 billion in 2022. Additionally, the pet food industry specifically generated a total of $23.31 billion in annual tax revenue.

 

Spending 

With a wealth of pets to cater to, pet industry sales have been flourishing for years, and are only set to continue. According to APPA’s “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report, pet owners’ expenditure grew from $46 billion in 2009 to $75 billion in 2019, representing a compound annual growth rate (CAGR) of 4.7%. In 2020, expenditures reached $104 billion and topped $137 billion in 2022, representing a 9.7% CAGR.

Looking ahead, APPA anticipates that the industry’s sales will hit $171 billion in 2024 and later $279 billion in 2030. Pet food is expected to account for the largest chunk of this forecast, reaching around $121 billion in 2030, followed by vet care at $71 billion, pet supplies and over-the-counter medications at $66 billion, and other services, including live animal sales, at $24 billion.

Despite the various hardships facing consumers throughout 2022, 39% of pet owners reported spending more on their four-legged companions than in previous years. Additionally, 76% claimed that the economy did not have a downward impact on their pet spending.

According to APPA, in 2022 pet owners mostly spent their money on pet foods and products, which includes beds, crates, carriers, chews, grooming aids, harnesses, medications, food accessories, toys, and vitamins and supplements. Dog owners spent 32% of their wallet share on dog products, 26% on food, 28% on veterinary care, 13% on services, and 2% on other pet-related purchases. Cat owners spent 40% of their wallet on cat products, 34% on food, 21% on veterinary care, 3% on services, and 2% on other pet-related purchases.

With COVID impacting several other CPG industries, the pet industry remained resilient especially when it came to consumer spending habits. According to APPA, nearly half (46%) of pet owners spent the same amount on their pets in 2022 compared to the previous year, while 39% reported spending more since the beginning of COVID. In addition, a majority of pet parents feel very strongly about the importance of their pet’s diet, as 75% claimed they do not plan to make changes regardless of the current economy or their personal finances.

Though pet purchases are becoming more of a necessity, many pet parents are still conscientious about how they spend their money. In 2022, 69% of pet owners agreed with the statement that they spend money very carefully, a decrease from 72% in 2018; and 67% consider their pets in their budgets, an increase from 60% in 2020. To help stave off financial pressures, an increasing number of pet owners are turning toward coupons or seeking the best deals in their pet product purchases. In 2022, 60% claimed they shop for the best deals or use coupons when purchasing pet products, an increase from 57% in 2018.

 

Shopping methods

Pet product shopping has been consistently dominated by brick-and-mortar stores and e-commerce. According to APPA’s “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report, 38% of pet parents purchased pet products in-person via a brick-and-mortar retailer, 34% purchased online with direct shipping, 12% browsed online and then purchased at a brick-and-mortar store, 7% purchased online and picked up in-store, and 7% browsed in-store and then purchased online from a different retailer. This underscores the increasing importance for pet food and product companies to implement an omnichannel strategy to capture consumers using a dual shopping approach.

Though browsing for pet products in-store has bounced back to pre-COVID levels, according to APPA, many pet parents are still learning about new products through the internet or social media. In 2022, 52% of pet owners became aware of new products in stores, a decrease from 56% in 2018; while 38% used social media to become aware of new products, an increase from 34% in 2020. Additionally, 45% used the internet to learn about new products in 2022, an increase from 41% in 2018. Those most likely to use the internet or social media include the Millennials and Gen Zers.

In relying on the internet to learn about new pet products, pet parents use various sources, from company and retailer websites to social media platforms and review sites. Learning about products via a product company’s website remains king with 50% utilizing this method in 2022, though this has significantly decreased from 60% in 2018. Other decreasing methods for learning about new products include Facebook, which dropped from 44% in 2018 to 42% in 2022, and product review sites, which dropped from 44% in 2018 to 33% 2022.

Increasing methods for learning about new products include:

  • YouTube, which rose from 35% in 2018 to 45% in 2022;
  • Retailer websites, which rose from 36% in 2020 to 43% in 2022;
  • Instagram, which rose from 21% in 2018 to 32% in 2022;
  • TikTok, which witnessed a drastic increase from 14% in 2020 to 25% in 2022.

Pet parents using e-commerce to buy pet products are homing in on pet foods, treats and toys. According to APPA, 80% of pet owners purchased pet food online in 2022, up significantly from 59% in 2018; and 76% purchased pet treats, an increase from 56% in 2018.

With e-commerce flourishing throughout the pet category, many online retailers have started offering subscriptions, offering consumers additional convenience. Nearly half of pet parents leverage some type of subscription-based purchase as a result of COVID, according to APPA. Though this has somewhat normalized after COVID, subscription-based purchasing remains highly popular. Forty-nine percent of pet owners used a subscription for pet-related purchases in 2022, an increase from 39% in 2018. Pet food subscriptions are the most popular, with 28% of pet owners using them in 2022  compared to 25% in 2018. The popularity of pet treat subscriptions have remained relatively the same from 2018 to 2022 at 18% of pet owners. Medication and vitamin/supplement subscriptions have decreased from 18% in 2020 to 16% in 2022,and those for toys, litter/bedding and grooming supplies have also witnessed decreases in pet parent usage.

 

Premiumization

Homing in on pet food purchases specifically, both in-store and online, premium formulas are overtaking the category in terms of consumer purchasing, according to APPA’s “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report.

Looking at dog parents, 45% purchased premium dog food in 2022, up from 37% in 2018. Twenty-six percent purchased basic formulas in 2022, a decrease from 29% in 2018, and 20% purchased natural formulas in 2022, a decrease from 22% in 2018.

Cat parents are also interested in more premium formulas, however basic cat foods are still highly purchased. Purchases for premium cat foods have remained flat, with 40% of cat owners purchasing in 2018 and 2022. Thirty-eight percent purchased basic formulas in 2022, a miniscule decrease from 39% in 2018. Those owning felines are also a lot less willing to purchase natural formulas, with only 19% buying them in 2022, a decrease from 20% in 2018.

Learn more in APPA’s full “Strategic Insights for the Pet Industry: Pet Owners 2023 and Beyond” report.

Keep up with the latest pet food trends on our Trends page.

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