Research Firm: Pet Industry Sales Still Trending Up

Overall pet product sales continue to grow on multiple fronts, with many driving trends, notably the humanization of pets and the rise of natural products, especially beneficial to the pet specialty segment, according to Scott Bender, senior research analyst and partner at market research firm Cleveland Research Co., during his “Sales Trends in the Pet Industry” presentation Tuesday at the PIDA Management Conference.  

As these trends are expected to continue and the rate of pet acquisition appears to be accelerating, Cleveland expects the pet industry’s growth outlook to continue to be stable and positive. Moreover, the industry would benefit from further improvement in the economy and especially the housing market.

That household penetration of pets has held steady in the United States for more than 10 years has provided a foundation for this continued growth, despite the recession. Although that penetration peaked at 63 percent in 2004 and 2006, it has held steady at 62 percent since then and has been above 60 percent since 1998, Bender presented.

Bender cited American Pet Products Association data showing that the annual pet industry growth rate has remained fairly steady for the past 10 years in the mid-single digits, although a “touch softer post-recession” at about 5 percent compared to 7 percent before the recession. APPA’s 2012 estimate was actually 4 percent, the lowest rate since at least 2003, when the industry grew 10 percent.

Overall, industry expenditures contine to grow toward $53 billion in 2012, with a new APPA estimate for 2013 expected to be announced during Global Pet Expo next month.

But what really drives the growth has been annual expenditures per pet, which has nearly doubled (up 80 percent), over the past 10 years from about $80 in 2002 to $140 in 2012, according to Cleveland Research estimates.

That type of spending would offset modest declines in overall pet ownership, as reported recently by the American Veterinary Medical Association.

Although Bender didn’t address the AVMA data directly (or I completely missed it), he did report that new pet adoptions and acquisitions appeared to be picking up, based on improvements in the housing market and Pethealth Inc.’s PetPoint report that tracks adoption trends at shelters using Pethealth’s shelter management software. That data showed pet adoptions were up 6 percent in 2012 vs. up 2 percent in 2011.

Similarly, Bender reported that, although still softer than before the recession, the housing market had improved slightly over the past 12 to 18 months, both for existing home sales and new housing starts. This is significant for the pet industry in that new pet acquisitions tend to rise with the housing market.