2021 U.S. PET SUPPLIES SPENDING $23.81B…Up ↑$8.65B

Total Pet spending grew to $99.98B in 2021, up $16.23B (+19.4%) from 2020, the biggest increase in history. In a big turnaround the Supplies segment led the way with a $8.65B, 57.0% increase to $23.81B. (Note: All numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Surveys)

Spending plummeted in 2019 & 2020 down -$4.6B due to Tarifflation and the Pandemic. In 2021, with lower prices and an easing of restrictions, spending turned up sharply in the 1st half then skyrocketed up in the 2nd half. We’ll “drill down” into the data to try to determine what and who are “behind” the explosive growth in Supplies Spending in 2021.

In 2021, the average household spent $178.20 on Supplies, up 54.3% from $115.52 in 2020. (Note: A 2021 Pet CU (68%) Spent $262.06) This doesn’t exactly match the 57.0% total $ increase. Here are the specific details:

  • 1.8% more CU’s
  • Spent 40.7% more $
  • 9.7% more often

Let’s start with a visual overview. The chart below shows recent Supplies spending history.

Since the great recession, spending in the Supplies segment has been driven by price. Although many supplies are needed by Pet Parents, when they are bought and how much you spend is often discretionary. When prices fall, consumers are more likely to buy more. When they go up, consumers spend less and/or buy less frequently.

2014 was the third consecutive year of deflation in Supplies as prices reached a level not seen since 2007. Consumers responded with a spending increase of over $2B. Prices stabilized and then moved up in 2015.

In 2015 we saw how the discretionary aspect of the Supplies segment can impact spending in another way. Consumers spent $5.4B for a food upgrade and cut back on Supplies – swapping $. Consumers spent 4.1% less, but they bought 10% less often. That drop in purchase frequency drove $1.6B (78%) of the $2.1B decrease in Supplies spending.

In 2016, supplies’ prices flattened out and consumers value shopped for their upgraded food. Supplies spending stabilized and began to increase in the second half. In 2017 supplies prices deflated, reaching a new post-recession low. The consumers responded with a $2.74B increase in Supplies spending that was widespread across demographic segments. An important factor in the lift was an increase in purchase frequency which was within 5% of the 2014 rate.

In 2018 prices started to move up in April and rapidly increased later in the year due to the impact of new tariffs. By December, Supplies prices were 3.3% higher than a year ago. This explains the initial growth and pull back in spending.

In 2019 we saw the full impact of the tariffs. Prices continued to increase. By yearend they were up 5.7% from the Spring of 2018 and spending plummeted -$2.98B. The major factor in the drop was a 13.1% decrease in purchasing frequency.

2020 brought the pandemic. Prices deflated but with retail restrictions and the consumers focus on needed items, both the amount spent and frequency of purchase of Supplies fell.

In 2021 the recovery began with a strong lift in the 1st half that reached record levels in the 2nd half. Pet parents bought all the supplies that they had been putting off for 2 years because of Tarifflation and the Pandemic. It was the greatest lift in history, but 2021 spending ended up where it was headed in 2018 before being “derailed” by outside influences.

That gives us an overview of the recent spending history. Now let’s look at some specifics regarding the “who” behind the 2021 lift. First, we’ll look at spending by income level, the most influential demographic in Pet Spending.

National: $178.20 per CU (+54.3%) – $23.81B – Up $8.65B (+57.0%).

All big income groups spent more but the 50/50 $ divide increased astronomically from $92K to $114K.

  • <$30K (25.5% of CU’s)- $76.26 per CU (+33.0%) $2.62B– Up $0.69B (+35.9%). This group is very price sensitive, but their big spending lift finally put them ahead of 2016 $ despite the fact that they have 15% fewer CUs.
  • $30K>70K (29.7% of CU’s)- $123.83 per CU (+27.2%) $4.91B Up $0.94 (+23.6%). This big, lower income group closely matches both the national pattern and that of the $150K+ group. Tarifflation had a big impact, but COVID and the recovery were less pronounced. Amazingly enough, until 2019 they were the leader in Total Supplies $.
  • $70>$100K (14.8% of CU’s) – $160.38 per CU (+36.3%) – $3.18B Up $0.86B (+37.2%). This middle-income group had been consistent in Supplies spending. 2020 hit them hard but they too rebounded stronger than the drop.
  • $100K>$150K (14.2% of CU’s) – $229.43 per CU (+56.7%)- $4.35B Up $1.59B (+57.6%). This high income group had the 2nd biggest COVID drop & traded Supplies $ for Food & Veterinary. In 2021 they had the 2nd strongest recovery.
  • $150K> (15.8% of CU’s) – $415.37 per CU (+83.9%) $8.75B Up $4.57B (+109.2%). The more money that you have. The more that you can spend. The $200K> segment almost tripled their Supplies spending in 2021.

Every big group spent more but the biggest increases came from higher incomes. Only the $40>49K group spent less in 2021 but they had spent 25% more in 2020 so they returned to pre-pandemic 2019 $pending… but with 9% fewer CUs.

Now, we’ll look at spending by Age Group.

National: $178.20 per CU (+54.3%) – $23.81B – Up $8.65B (+57.0%).

It’s simple. Under 25 spent a little less. Over 25 spent a lot more.

  • 35>44 (17.2% of CU’s) $312.65 per CU (+120.3%) – $7.17B; Up $4.0B (+126.3%) This group is second in income and overall expenditures. The strong inflation drove the $ down in 2019 but the Pandemic had little additional impact. Spending skyrocketed in 2021 as 2.8% more CUs spent 92.6% more $, 14.4% more often.
  • 55>64 (18.5% of CU’s) $180.26 /CU (+65.5%) – $4.46B – Up $1.73B (+63.2%). When prices turned sharply up in the 2nd half of 2018 and 2019, spending stalled then dropped. Spending fell again in 2020 as they binge bought pet food. They had a strong recovery in 2021 as 1.4% fewer CU’s spent 51.2% more on Supplies, 9.5% more often.
  • 45>54 (16.7% of CU’s) $186.48 per CU (+27.4%) – $4.15BUp $0.85B (+25.6%). Except for 2019 and now 2021, this highest income age group had been the leader in Supplies spending since 2007. They came back from the pandemic drop but now are in 3rd place for Supplies $. 1.5% fewer CU’s spent 24.4% more, 2.4% more often.
  • 25<34 (15.7% of CU’s) $177.00 per CU (+32.9%) – $3.72B; Up $0.93B (+33.2%). After trading Supplies $ for upgraded Food and Vet Care in 2016, these Millennials turned their attention back to Supplies. The rising prices hit them hard in 2019 but they actually increased spending in the pandemic. The lift grew even stronger in 2021 primarily due to increased purchase frequency. 0.2% more CUs spent 9.7% more $, 21.1% more often.
  • 65>74 (16.1% of CU’s) $130.28 per CU (+35.6%) – $2.80B – Up $0.83B (+42.5%). This older group is very price sensitive so rising prices caused them to cut back on spending in 2019. Like the 25>34 yr-olds, they also increased spending in 2020 and spending soared in 2021. However, it was not due to increased frequency. 5.1% more CUs spent 32.0% more, 2.7% more often. Their purchase size was radically higher.
  • 75> (10.9% of CU’s) $67.13 per CU (+56.0%) – $0.98B, Up $0.34B (+53.7%). This lowest income group is truly price sensitive and their spending was severely impacted by the Pandemic. They had a strong recovery in 2021 but didn’t quite make it back to their 2018 level. 1.4% fewer CU’s spent 22.8% more, 27.1% more often.
  • <25 (4.9% of CUs) $80.11/CU (-27.6%) $0.53B – Down $0.03B (-5.1%). Most moved out of their parents homes but their average CU spending fell a lot. 31.1% more CUs spent 15.8% less $, 14.8% less often.

The COVID recovery was widespread and spectacular. Only <25 spent less and the performance of 35>44 was amazing.

Next, let’s take a look at some other key demographic “movers” in 2021 Pet Supplies Spending. The segments that are outlined in black “flipped” from 1st to last or vice versa from 2020. The red outline stayed the same.

In 2019, in 9 of 12 demographic categories all segments spent less on Supplies. In 2021, in 9 categories all segments spent more. Also in 2019, 97% of 96 demographic segments spent less. In 2021, 97% spent more. Quite a turnaround.

Most of the winners and many losers are in their “usual” spot. Quite frankly, there are no surprises. There were 6 flips. 5 were from last to 1st. 5 Segments held their position from 2020.  4 of them were winners. This chart clearly shows that 2021 was an incredibly positive year for Pet Supplies spending. Your Race or ethnicity, where you lived, how you lived, the makeup and size of your household, your occupation or whether you even had a job didn’t matter. All of the segments in these demographic groups had 1 shared behavior. They spent more on Supplies for their Pet Children.

The $8.65B increase in Supplies $ was the biggest in history, beating the $3.1B lift in 2008 but should it have been expected? Supplies is a discretionary segment, so it is more susceptible to market factors, especially inflation changes, than the more needed segments. Prices deflated from 2016 to 2018, resulting in a $5B increase. Then came Tarifflation and the Pandemic and Spending fell -$4.6B. What if these 2 outside events had never happened? Where would we be  in Supplies Spending? The annual growth rate for Supplies from 2015 to 2018 was +9.9%. From 2018 to 2021 it was +6.6%. A 10% growth rate would be difficult to maintain so it is not surprising that despite the big lift, the Supplies growth rate has fallen. We shouldn’t be surprised by the massive spending lift. Supplies are discretionary, primarily in purchase frequency. Most are still needed. In 2021, Pet Parents just bought the Supplies that they have needed for the past 2 years. The current big, unanswered question is how will the high inflation rates in 2022 affect Supplies spending?

Retail Channel Monthly $ Update – August Final & September Advance

By 2021, the market had generally recovered from the impact of the pandemic. Now we are being hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

The Census Bureau Reports are the Monthly and the Advance Retail Sales Reports. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin with the Final Report for August and then move to the Advance Report for September. Our focus is comparing 2022 to 2021 but also YTD 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2021
    • Current Month Real change – % vs same month in 2021 factoring in inflation
  • Current YTD change – % & $ vs 2021
    • Current YTD Real change – % vs 2021 factoring in inflation
  • Current YTD change vs 2019 – % & $
    • Current Real change YTD vs 2019 – % factoring in inflation
  • Monthly & YTD $ & CPIs which are targeted by channel will also be shown. (CPI details are at the end of the report)

First, the August Final. Total Sales turned up after 2 down months and the $ for all were up for August and YTD vs 2021. However, factoring inflation into the data, only Relevant Retail was down for the month but in YTD $, only Restaurants were up. Here is the August data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The August Final is $2.3B more than the Advance Report. Relevant Retail had the biggest change: +$1.6B; Restaurants: +0.9B; Auto: +$0.5B; Gas Stations: -$0.7B. Sales are up from last month in all but Restaurants & Gas Stations and consumers continue to spend more vs 2021. However, the “real” numbers tell a slightly different story. Only Relevant Retail is really down for the month but again only Restaurants are really up in YTD $. Restaurants had a late pandemic recovery and it is still growing. The inflation impact on Relevant Retail is significant. Their Real YTD $ales vs 2021 have been negative for 5 months. They do have the best performance since 2019 as 63% of their 31.6% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in August

Overall – 8 of 11 were up vs July. Vs August 2021, all reported more $ but only 6 were really up. In YTD vs 2021, all reported increases but only 4 were real. Vs 2019, only Office/Gift/Souvenir & Discount Dept Stores were “really” down.

  • Building Material Stores – A Fall lift has started early. YTD Home Ctr/Hdwe is up 7.7% vs 21 but Farm stores are only +3.4%. The Bldg/Matl group has a YTD inflation rate of 10.9% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which produced sales growth over 36% since 2019 in both channels. Importantly, 60% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.9%, Real: 6.7%; Farm: 11.7, Real: 7.6%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The YTD rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are up from July and vs 2021. Real sales are down vs August 2021 but 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & YTD. Also, only 16% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +6.4%, Real: +1.1%; Drug Stores: +4.6%, Real: +4.0%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Their sales increased in August and 2022 YTD sales are now 1.2% above 2021. Their current inflation rate is 3.8% which is down from 7.5% in April but YTD it is still 6.3%. It was also high in 20>21, +4.8%. However, 71% of their 47% lift since 2019 is real. Their Avg Growth Rate was: +13.8%; Real: +10.1%.
  • Gen Mdse Stores – Only Discount Dept store sales were up from July. However, all are now up for the month and YTD vs 2021. All real measurements vs 2021 are negative for all channels. Disc. Dept Stores were hurting before COVID and now their YTD sales are again “really” down from 2019. The other channels have 38% real growth. Avg Growth Rate: SupCtr/Club: 5.5%, Real: 2.0%; $/Value Strs: +7.5%, Real: +4.1%; Disc. Dept.: +2.4%, Real: -0.2%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up across the board vs July & 2021. The growth vs 2021 has been strong enough that it turned real YTD sales positive vs 2021. However, their real sales vs 2019 are still down -1.7%. Their true recovery is still a ways off. Avg Growth Rate: +2.1%, Real: -0.6%
  • Internet/Mail Order – The growth of the “hero” of the Pandemic is slowing. August Sales are up vs July and 2021 but their YTD growth rate is only half of their average since 2019. However, 90% of their 78.9% growth since 2019 is real. Their Avg Growth Rates is: +21.4%, Real: +19.5%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level by December 2021 as annual sales reached $100B for the first time. In 2022, they are by far the Sales increase leaders over 2021. Their sales dipped in January from December and again in July, but all measurements have been positive for every other month. Plus, 86% of their 59.1% growth since 2019 is real. Average Growth Rate is: +16.7%, Real: +14.7%.They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, all channels reported increases in monthly  and YTD sales over 2021. When you factor in inflation, the number with any “real” growth falls to 6 for monthly & 4 for YTD. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ numbers for September.

We have had memorable times since 2019. Some big negatives, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $600B in a month for the first time and broke the $7 Trillion barrier in 2021.  Relevant Retail was also strong as annual sales reached $4T and all big groups set annual $ales records in 2021. Now, radical inflation is a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. We saw this again in September. Sales fell from August but all groups were up vs September & YTD 2021. However, in the actual amount of product sold YTD vs 2021, all groups but Restaurants were down.

Overall – Inflation Reality is still here. The monthly increase vs 2021 continues to be lower than the inflation rate. The spending for all groups fell from August but all are up for the month and YTD vs 2021. However, the real YTD sales vs 2021 for all but restaurants are down for the 6th straight month.

Total Retail – Every month in 2022 has set a monthly sales record. September $ are $661B, the 8th highest of all time. 2022 has become somewhat normal as sales were stable for 4 months then dipped slightly in September. September $ are -5.7% vs August but are up 8.6% vs September 2021 and 10.1% vs YTD 2021. However, when you factor in inflation, monthly sales are down -0.9% and YTD sales are down for the 7th consecutive month. Plus, only 40% of the 32% growth since 2019 is real. The Avg Growth Rate is: +9.7%, Real: +4.1%. The impact of Inflation continues.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. Sales in the last 9 months of 2021 exceeded $70B and 2021 was the biggest year in history, $876B. January sales fell from December but then turned up, setting new all-time monthly records in March>May. $ fell in June, set a new record in July and then fell again in Aug>Sep. They are the only big group that is positive in all measurements vs 2021 & 2019. Inflation is high at 8.3% for August and 7.2% YTD but it is still the lowest of any big group. 58.0% of their 31.7% growth since 2019 is real. Their Avg Growth Rate: +9.6%, Real: +5.8%. They only account for 12.7% of Total Retail $ales, but their strong performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, June up, July down, August up, September down. They have 4 down months in actual sales which are the only reported sales negatives by any big group vs 2021. This is bad but their real YTD sales numbers are much worse. Extremely high inflation has pushed their real YTD sales down -11.3% vs 2021, the worst of any group. Plus, their 24.6% growth since 2019 is really down -3.1%. Their Avg Growth: +7.6%, Real: -1.1%. Inflation has slowed in the last 4 months. It is likely that the 4 drops in $ales vs 2021 were tied to high inflation.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and obviously need less gas. This group started recovery in March 2021 and reached a record $584B for the year. Sales fell in Jan>Feb turned up in Mar>Jun then fell in Jul>Sep. They have the biggest increases vs 2021 and 2019 but it is not reality. Gasoline inflation has slowed so September $ are really up vs 2021. Inflation is still 18.8% and 40.8% YTD, the highest of any expenditure category. It has even caused consumers to buy 4.3% less than they did in 2019. Avg Growth Rate: +14.5%, Real: -1.4%. The YTD numbers show a big impact of inflation. Consumers spend more but buy less, even less than they bought 3 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This the “core” of U.S. retail and accounts for 60+% of Total Retail Spending. There are a variety of channels in this group, so they took a number of different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales fell in Jan>Feb, then went on an up/down roller coaster from Mar>Sep with September down 5.2%. All months in 2022 set new records but their YTD increase is 14% below their 9.7% avg growth since 2019. Now, we’ll look at the impact of inflation. 62.2% of their 32.0% growth since 2019 is real. However real sales vs 2021 are down -1.7% for the month and -0.8% YTD. This shows that inflation is only a 2022 problem. Their Avg Growth Rate: +9.7%, Real: +6.2%. The performance of this huge group is critically important. This is where America shops. Real YTD sales are down almost 1% so the amount of products that consumers bought in 2022 is less than in 2021. They just paid more. That’s not good.

Inflation is slowing slightly but the impact is still there. All groups but Restaurants have no YTD real growth vs 2021 and Auto & Gas Stations are still “really down” vs YTD 2019. We’ve now had 7 straight months of real YTD drops for Total Retail and 6 straight for Relevant Retail so we are still in Phase II of inflation. Consumer spending grows but the amount bought declines. With actual sales in 4 of the last 7 months down vs 2021, the Auto Group is close to Phase III, when consumers actually cut back on spending. If inflation continues, Phase III could become a reality.

  • Relevant Retail: Avg Growth Rate: +9.7%, Real: +6.2%. All 11 channels were down vs August but 10 were up vs September & YTD 2021. The negative impact of inflation is less but still there in the “real” data.
  • All Dept Stores – This group was struggling before COVID, and the pandemic hit them hard. They began to recover in March 2020 and have continued to grow in 2022. Their YTD numbers have been positive vs 2019 since April but they are still down in “real” terms in all measurements vs both 2019 & 2021. Avg Growth: +0.3%, Real: -2.5%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is a big factor in their current numbers. Sales are down from August but up vs 2021. Their real numbers are all down vs 2021 and only 37.9% of their 19.0% lift from 2019 is real. Avg Growth: +6.0%, Real: +2.4%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are down from August. The increases vs 2021 are strong but inflation is stronger. Real sales are down and only 14.3% of the growth since 2019 is real. Avg Growth: +6.5%, Real = +1.0%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales dipped in August but are ahead in all measurements vs 2021 – actual & “real”. Their inflation rate is low so 89% of their 15.8% growth from 2019 is real. Their Avg Growth is: +5.0%, Real: +4.5%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 2021 and resulted in explosive growth through May 2022. September sales are +4.5% from 21 but real sales are -0.9%. YTD $ are up 7.8%% and 87% of their growth from 2019 is real. Avg Growth: 5.0%, Real: +4.4%.
  • Home Furnishings – They were also less impacted by COVID. Sales dipped Mar>May in 2020. Then as consumers’ focus turned to their homes, furniture became a priority. Inflation is high. Sales are up slightly vs 2021 but all of their real numbers vs 2021 are very negative. Only 19.3% of their growth since 2019 is real. Avg Growth: +6.5%, Real: +1.3%.
  • Electronic & Appliances – This channel has problems beyond the pandemic. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are down from August and in all measurements vs 2021. Actual sales are even down vs 2019. However, deflation did keep their “real” YTD sales up +0.6% vs 2019. Avg Growth: -0.2%, Real: +0.2%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. This year’s spring lift ended in May. Sales dropped in September after an unexpected sharp increase in August. Monthly & YTD sales are up vs 2021, but when you factor in double-digit inflation, the real amount sold is down for both measurements. However, 58.8% of their strong 37.1% sales growth since 2019 is real. Their Avg Growth is: +11.1%, Real: +6.8%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. September $ fell 11.7% from August but are still ahead of 2021, monthly & YTD. However, real YTD $ are still down vs 2021. Inflation in this group is lower than most groups and most comes from Sporting Goods. 78.6% of their 38.3% growth since 2019 is real. Avg Growth is: +11.4%, Real: +9.2%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21. They set a new monthly $ales record in December. Sales are down 7.5% from August but since April they have held the top spot in YTD increase vs 2021. Their YTD growth since 2019 is 2nd only to NonStore. Plus, 81.8% of the 45.1% growth since 2019 is real. Their Avg Growth is: +13.2%, Real: +11.0%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021. In December monthly sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their YTD Growth has slowed significantly in 2022 but all measurements are positive. 88.1% of their 73.3% increase since 2019 is real. Their Avg Growth is: +20.1%, Real: +18.1%.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail. While the timing varied between channels, by the end of 2021 it had become very widespread. In late 2021 and now in 2022, a new challenge came to the forefront – extreme inflation. It isn’t the worst in history, but it is the biggest increase in prices in 40 years. Overall, and in most product categories it has slowed in Jul>Sep. However. it continues to grow in Services. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group continue to grow but the growth rate has markedly slowed compared to last year. Overall, the retail market is generally in phase II of strong inflation – spending grows but the amount purchased falls. The channels in the graph illustrate this perfectly and show how widespread that it has become. 10 of 11 channels are up vs September & YTD 2021. However, if you factor in inflation, only 4 are up for either measurement. Inflation is real and there are real and even worse consequences if it continues.

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates.

Monthly CPI changes of 0.2% or more are highlighted.

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. Non-store is not all internet. It also includes Fuel Oil Dealers, the non-motor fuel Energy Commodity.
  2. Why is there no Food at home included in Non-store or Internet?
    1. Online Grocery purchasing is becoming popular but almost all is from companies whose major business is brick ‘n mortar. These online sales are recorded under their primary channel.
  3. 6 Channels have the same CPI aggregate but represent a variety of business types.
    1. They also have a wide range of product types. Rather than try to build aggregates of a multitude of small expenditure categories, it seemed better to eliminate the biggest, influential groups that they don’t sell. This method is not perfect, but it is certainly closer than any existing aggregate.
  4. Why are Grocery and Supermarkets only tied to the Grocery CPI?
    1. According to the Economic Census, 76% of their sales comes from Grocery products. Grocery Products are the driver. The balance of their sales comes from a collection of a multitude of categories.
  5. What about Drug/Health Stores only being tied to Medical Commodities.
    1. An answer similar to the one for Grocery/Supermarkets. However, in this case Medical Commodities account for over 80% of these stores’ total sales.
  6. Why do SuperCtrs/Clubs and $ Stores have the same CPI?
    1. While the Big Stores sell much more fresh groceries, Groceries account for ¼ of $ Store sales. Both Channels generally offer most of the same product categories, but the actual product mix is different.

Petflation 2022 – September Update: Prices increase to +11.0% above 2021

Inflation continues to make headlines. There have been year over year increases in the monthly Consumer Price Index (CPI) larger than we have seen in decades. September prices rose 0.2% from August, and the CPI was still up +8.2% vs 2021, but down from +8.3% last month. Food at Home (groceries) prices continue to surge, up 13.0% over 2021. That’s 7 straight months of double-digit YOY monthly percentage increases. These are the first 10+% increases since 1981. As we have seen in recent years, even minor price changes can affect consumer pet spending, especially in the discretionary pet segments, so we will continue to publish monthly reports to track petflation as it evolves in the marketplace.

Total Pet prices were 4.1% higher in December 2021 than in December 2020, while the overall CPI was up 7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June. National inflation has slowed since July but Petflation has increased, passing the National rate in July and is +11.0% in September, 34.5% higher than the national rate of 8.2%. We need to look a little deeper into the numbers. This and future reports will include:

  • A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
  • Monthly comparisons of 22 vs 21 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month
    2. Inflation changes for recent years (20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2022 vs 2019
    4. Average annual Year Over Year inflation rate from 2019 to 2022
  • YTD comparisons
    1. YTD numbers for the monthly comparisons #2>4 above

In our first graph we will track the monthly change in prices for the 24 months from September 2020 to September 2022. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus those from 12 and 24 months earlier are included as are the year-end numbers for 2020 & 2021.This will give you some key waypoints for comparisons. (Note: Some key peaks and valleys are also highlighted.)

The pandemic hit home in early 2020. In September, the national CPI was only +1.3% and Pet prices were down -0.2%. There are 2 different patterns between the Services and the Products segments. Veterinary and Services prices generally inflated after mid-2020, similar to the overall CPI. Food and Supplies prices generally deflated until late 2021. After that time, Petflation took off. Pet Food prices consistently increased but the other segments had mixed patterns until July, when prices in all segments increased. In August & September Petflation accelerated, especially in Food & Veterinary.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul/Aug 2022. 44% of the overall 15.5% increase since 2019 happened from Jan>June 2022.
  • Pet Food – Prices stayed generally below December 2019 levels from April 2020 to September 2021, when they turned up. There was a sharp increase in December but 89% of the 14.4% increase has happened since January.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022 when they turned sharply up reaching a new all-time pricing high in January, beating the 2009 record. Prices plateaued from February> May but turned up in June. The CPI flattened in July but turned up in Aug/Sept.
  • Pet Services – Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in March then turned up July>September.
  • Veterinary – Inflation has been generally consistent in Veterinary. Prices began rising in March 2020 and increased through 2021. Then a pricing surge began in December which pushed them past the overall CPI. In May prices fell and stabilized in June. Then strong increases in July>September again put them above the National CPI.
  • Total Pet – The blending of the different segment patterns made the Pet Industry appear calm. That ended in December 2021 as prices surged in all. After mixed up and downs, in Jul>Sep inflation grew in all segments.

Next, we’ll turn our attention to the Year over Year inflation rate change for September and compare it to last month, last year and to previous years. We’ve added some human categories to put the pet numbers into perspective.

Overall, Prices were up 0.2% vs August but were up 8.2% vs September 2021. The Grocery increase is now 13.0% which is a big negative but there is another area of concern. Only 3 of 9 categories had increases over 1% from last month, but they are all “Pet”. The National CPI rate is slowing but Petflation, especially in Food & Veterinary, is getting worse.

  • U.S. CPI– Prices are up 0.2% from August. The YOY increase is +8.2%, down from the 9.1% peak in June. The targeted inflation rate is <2% so we are still 4 times higher than the “target”. However, a 3rd slight decline is a good start.
  • Pet Food– Prices are +1.3% vs August and 14.0% vs Sep 21. They also exceeded the Food at Home inflation rate for the 1st time. The YOY increase is being measured against a time when prices were at 2019 levels, but that increase is over 4 times the pre-pandemic 3.3% increase from 2018 to 2019.
  • Food at Home – Prices are up 0.6% from June. The increase from 2021 is 13.0%, down slightly from 13.5% last month. Inflation for this category since 2019 is the highest on the chart and is 47% more than the national CPI.
  • Pets & Supplies – Prices only grew 0.3% from August but set a new record high. They fell from to 2nd to 3rd in terms of monthly increase over 2021 for industry segments and still have the lowest increase since 2019.
  • Veterinary Services – September prices grew 1.7% from August. They are +11.6% from 2021 and trail only Food in the Pet Industry. They also remain 2nd in the increase since 2019 with 19.7% compared to Food at home at 22.9%.
  • Medical Services – Prices sharply increased at the start of the pandemic in 2020 but then inflation slowed and fell to a low rate in 2021. In 2022 prices are turning sharply up again, +48% vs the pre-pandemic 2018>19 rate.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021/22. Prices are +0.6% from August and +6.3% vs 2021. Prices hit a new record high in September, passing the previous record set in May.
  • Haircuts & Other Personal Services – Prices are +0.3% from Aug. and +5.1% from 2021. They are +16.0% since 2019.
  • Total Pet – Petflation is strong, 3+ times the rate of last year and is 34.5% ahead of the National CPI. All segments increased prices in September, but inflation is primarily being driven by Food & Veterinary. Inflation can cause reduced purchase frequency in Supplies, Services and Veterinary. Super Premium Food has been generally immune as consumers are used to paying a lot and it is needed every day. We’ll see if consumers are willing to pay the new high prices for food and buy the more discretionary products/services at the same frequency as they did in the past.

Now here’s a look at Year-to-Date numbers. How does 2022 compare to previous years…so far?

The increase from 2021 to 2022 is the biggest for 7 of 9 categories. The average annual increase since 2019 is 3.8% or more for all but Pet Food & Pet Supplies. This is largely due to deflation in the 1st half of 2021.

  • U.S. CPI – The current increase is still almost double the average increase from 2019>2022, but almost 4 times the average annual increase from 2018>2021. Inflation is a big problem that started recently.
  • Pet Food – Inflation is growing stronger, especially after deflation in the 1st half of 2021 kept YTD prices low.
  • Food at Home – The 2022 YTD inflation beat the U.S. CPI by 27%. You can see the impact of supply chain issues.
  • Pets & Pet Supplies – Prices have been at record levels since January. Although the 2021>22 increase is being measured against a “flat” 2021, it is significant and just slightly behind Food & veterinary in the Pet Industry.
  • Veterinary Services – Trails only Food at Home in inflation since 2019 and is the only segment on the chart with a 3+% inflation rate each year throughout the pandemic and recovery. No matter what, just charge more.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. In 2022 there is another pricing surge as the inflation rate is 40% higher than pre-pandemic 2018>19.
  • Pet Services – February & May set records for the biggest year over year monthly increases in history. Prices began to grow again in July, reaching a record high in September. The current September YTD increase of 6.0% is the largest in history. Demand has grown for Pet Services while the availability has decreased, a formula for inflation.
  • Haircuts & Personal Services – The services segments, essential & non-essential were hit hardest by the pandemic. After a small decrease in March, prices turned up again. The YTD rate is just behind 2020>21 but still 89% more than 2018>19. Consumers are paying 15% more than in 2019. This usually reduces the purchase frequency.
  • Total Pet – We have seen basically two different inflation patterns. After 2019, Prices in the Services segments continued to increase, and the rate accelerated as we moved into 2021. The product segments – Food and Supplies, were on a different path. They generally deflated in 2020 and didn’t return to 2019 levels until mid-year 2021. Food prices began a slow increase, but Supplies remained stable until we neared yearend. In 2022, everything changed as Food and Supplies prices turned sharply up. Food prices continued to climb. Supplies pricing stabilized then grew in Jun>Sep. The Services segments have had some ups & downs, but both are inflating now. The net was a September YTD Petflation increase vs 2021 of 8.1%, 97.6% of the high 8.3% National rate. It was only 72.5% back in March.

Petflation is growing stronger. Will it impact spending? Let’s put it into perspective. The 8.1% current YTD increase in Total Pet is still below the 8.9% record set in 2009 but 5+ times more than the 1.5% avg since then. Pet spending continues to move to higher income groups, but the impact of inflation varies by segment. Supplies is the most affected as many categories are price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a reduction in visit frequency. Spending in the Services segment is driven by higher incomes, so inflation is less impactful. We’ll just have to wait and see the overall impact on Pet Spending of the continued strong Petflation.

2021 U.S. PET FOOD SPENDING $34.41B…Down ↓$2.44B

After the pandemic turmoil in 2020, there was a strong recovery in 2021. Total Pet spending had a record increase and reached $99.98B, up $16.23B (+19.4%). Food spending fell after the record “panic” increase in 2020 but the other essential segment, Veterinary had record growth. The discretionary segments – Supplies & Services were hit hard by the pandemic. In 2021, Pet Parents gave them the attention they deserve…and a lot more. Here are the specifics:

  • Pet Food – $34.41B; Down $2.44B (-6.6%)
  • Pets & Supplies – $23.81B; Up $8.65B (+57.0%)
  • Veterinary – $32.67B; Up $7.82B (+31.5%)
  • Pet Services – $9.10B; Up $2.20B (+32.0%)

The industry truly is a “sum” of its integral segments, and each segment has very specific and often very different buying behavior from the many consumer demographic segments. For this reason, we’re going to analyze each of the industry segments first. This will put the final analysis of Total Pet’s Record Spending into better perspective. Note: The numbers in this report come from or are calculated by using data from the current and past US BLS Consumer Expenditure Surveys. In 2021, this was gathered by the U.S. Census Bureau from over 42,000 interviews and spending diaries. The final data was then compiled and published by the US BLS.

We will start with the largest Segment, Pet Food (and Treats). In 2021 Pet Food Spending totaled $34.41B in the U.S., a $2.44B (-6.6%) decrease from 2020. The current trend in high priced, super premium foods magnifies the results of any changes in consumer purchasing behavior. In earlier research we discovered a distinct, long-term pattern in Pet Food Spending. In 2018 we broke the pattern due to outside influences – 1st the FDA warning, then with COVID in 2020. Here is Pet Food Spending since 1997 in full Retail Dollars and adjusted for inflation.

The pattern began in 1997. Retail Pet Food Spending increases for 2 consecutive years then reaches a plateau year or even drops. There was a notable exception in the period from 2006 to 2010. During this time, there were two traumas which directly impacted the Pet Food Retail market. The first was the Melamine recall, which resulted in radically increased prices as consumers insisted on made in USA products with all USA ingredients. The second affected everyone – the great Recession in 2009. This was the first time that annual U.S. retail spending had declined since 1956. The net result was that the plateau period was extended to include both 2009 and 2010.

For 20 years, Pet Food was driven by short term trends. A new food trend catches the consumers’ attention and grows …for 2 years. Then sales plateau or even drop…and move to the next “must have”. After 2014, the changes  became more pronounced and the situation got more complicated due to a number of factors starting with the move to high priced super premium foods, but including increased competition, especially from the internet, and behavioral changes, like increased value shopping. In 2018, outside influences came into prominence. The first was the FDA warning on Grain Free dog food. This caused many Pet Parents to back away from certain foods. When the warning was determined to be bogus, the Food segment began recovery. Then came COVID. Fear of possible shortages caused certain groups to binge buy food. Now, that’s over. With the spending dip in 2021 after 2 years of increases, perhaps the spending pattern is back on track. Now, let’s take a closer look at spending since 2014.

First, some specifics behind the $2.44B (-6.6%) decrease to $34.41B. In 2021, the average U.S. Household spent a total of $258.09 on Pet Food. This was an -7.9% decrease from the $280.38 spent in 2020, which doesn’t exactly “add up” to the -6.6% decrease in total Food Spending. With additional data provided from the US BLS, here is what happened.

  • 1.5% more U.S. CUs
  • Spent 12.7% less $
  • 5.5% more often

By the way, if 68% of U.S. CUs are pet parents then their annual Pet Food Spending is $379.54. Here’s a rolling history.

2014 marks the beginning of the Super Premium era. It began in the 2nd half of 2014 with the 25>34-year-old Millennials making the 1st move. In 2015 the Baby Boomers got on board in a big way, producing a $5.42B increase in spending, the biggest lift in history at the time. 2016 saw a spending change that was accelerated by the high prices of Super Premium Pet Foods. After consumers upgraded to a more expensive pet food, their #1 priority became, “Where can I buy it for less?” Value Shopping on the internet was a major contributing factor in the big spending drop in 2016.

2017 was an up year which should have been due to a “must have” trend. However, a closer look at the data showed that the $4B increase in Pet Food spending in 2017 came not from a new trend but from a deeper demographic penetration of Super Premium foods. Value shopping in a highly competitive market, especially on the internet had made Super Premium pet foods more accessible to a broad swath of consumers.

Like Pet Food, human behavior has changed over the years in regard to our pets. In the 90’s, Pet Owners became Pet Parents. Then, after 2000 we began truly humanizing our pets which is very accurately reflected in the evolution of Pet Food. We became more focused on fulfilling the health needs of our pets, beginning with the first move to premium foods in 2004. This radically increased after the Melamine scare in 2007. Now consumers read pet food labels, research ingredients and expect their pet foods to meet the same quality standards as the best human foods. This was very evident in 2018. It should have been a year of increased spending but the consumers’ reaction to the FDA grain free warning threw the pattern out the window. In 2019 the warning lost credibility. Pet Food spending stabilized in the 1st half of the year and then grew by $2.3B in the 2nd  half. Some Pet Parents began to return to the topline Super Premium Foods while others opted for even more expensive varieties. Also, new groups got on board the Super Premium Express.

After the 2019 recovery came the pandemic of 2020. There is nothing more necessary to a Pet Parent than pet food. This spurred binge buying, especially in the 1st half of the year and drove the biggest annual spending increase in history. However, binge buying doesn’t increase usage, so spending has fallen in 2021. Another factor was the ongoing strong search for value & convenience which drove many consumers online. Consumers spent less per purchase which reflects the end of the binge as well as their search for value. There were 1.5% more CUs and they bought more frequently. The increase in frequency came from more regularly scheduled deliveries but some pet parents also downsized their purchases to lower the price. When you put all these factors together, the small drop in spending is not a surprise.

The growth of Pet Food spending since 2014 reflects the rise of Super Premium but also another trend – the spectacular increase in the number and use of Pet Medications and Supplements, which are often produced in the form of treats. Together, the strength of Pet Food and these product subcategories reflect the Pet Parents’ absolute number 1 current Concern – the health, wellbeing and safety of their Pet Children, which starts with the quality of their food.

Now let’s look at some specific 2021 Pet Food Spending Demographics. First, we’ll look at income. Prior to 2014 it was a less dominant factor in Food spending. However, the move to Super Premium has brought it more to the forefront. In 2015 the spending of the over $70K group exceeded the <$70K for the first time. In 2021, $70K> had a big drop in $ but was still 71% more than <$70K. The $100>150K had the biggest decrease while <$30K, $70>100K and $150K> actually spent more. Due to the recent movement to higher income groups, we now also report spending over/under $100K. In 2015, the 50/50 divide on Pet Food spending was about $70K. In 2019 it was $87K. In 2020 it was about $107K, breaking the $100K barrier for the first time. In 2021 it fell to $92K, about 5% more than the average CU income but 30% more than the median income. Higher income is still important in Pet Food spending. The chart below shows the annual spending for the major income groups from 2016 > 2021. This should put the 2021 numbers into better perspective.

Before we get into the details for 2021, we should note the uniqueness of 2017. With competitive pricing on Super Premium Foods and the consumers’ commitment to pet health, 2017 was the only year since 2015 with spending growth in every major income group. Since then, we have seen the major impact on various groups by outside influences. In mid-2018 it was the FDA grain free warning and in 2020 it was the pandemic.

2021 National Numbers: $258.09 per CU (-7.9%); $34.41B; Down $2.44B (-6.6%); 2016>2021 – Up $7.91B (+29.8%)

The spending pattern was mixed. The spending by the <$70K groups was stable. There was a huge drop by the 2020 binge buying $100>150K group which was somewhat mitigated by lifts from $70>100K & $150K> groups.

Here are 2021 specifics:

  • Under $30K: (25.5% of CU’s) – $142.61 per CU (-3.0%) – $4.67B – Up $0.06B (+1.3%). Obviously, this group is very price sensitive. It was also strongly impacted by the pandemic. The number of CU’s was up 4.2% in 2021 after steadily declining for years. In 2020, CUs were down 18.8% from 2015. They don’t have a lot of $ to spend but they did do some binge buying in 2020. Their spending lift in 2021 was entirely due to more CUs. They are still fully committed to their Pets. This is evidenced by the fact that they spend 1.02% of their Total CU expenditures on their pets, including 0.43% on Pet Food. The national averages are: Total: 1.12%; Food: 0.39%.
  • $30K>$70K: (29.7% of CU’s) – $194.37 per CU (+0.2%) – $8.03B – Down $0.14B (-1.7%). They are also very price sensitive and 2021 didn’t make things any better. Their average income was unchanged from 2020 to 2021 while the national average increased by 3.7%. They had a 1.9% decrease in the number of CUs which negated their slight increase in CU spending. The Pet Food spending within this big group was definitely mixed. The $30>39K group lost 7% in CUs and radically decreased spending, -$1.0B (-33.3%). The $40>49K group fell -4.5% in numbers but they increased their CU spending by 2.8%. However, their $ still fell by -$0.04B. Now, the most positive group, $50>69K. They gained 3.5% in CUs but spent 25.5% more per CU on Pet Food. These 2 factors pushed their Total Pet Food Spending up $0.90B (+30.0%). It was a big lift but not enough to overcome the decreases from $30>49K.
  • $70K>$99K: (14.8% of CU’s) – $313.68 per CU (+54.4%) – $6.21B – Up $2.45B (+65.4%). This group has a regular up/down spending pattern. They got “on board” with Super Premium food in 2017 but they became very sensitive to outside influences – the FDA warning in 2018 and COVID in 2020. However, they came back strong from both. They are middle income, with family responsibilities and under considerable monetary pressure.
  • $100>150K (14.2% of CU’s) – $289.71 per CU (-62.0%) – $5.46B – Down $8.92B (-62.1%). This group was the driver in the 2020 panic, binge buying of Food in 2020. It was an emotional reaction, but they had the $ to do it. They are “eating down” the excess inventory as the 2021 drop was $1.7B more than the 2020 lift. However, they are still spending the money “saved” on Food on their pets, with a 36+% spending lift in all other industry segments.
  • $150K> (15.8% of CU’s) – $485.93 per CU (+68.6%) – $10.05B – Up $4.12B (+69.5%). This group shows that there were strong pandemic recoveries for some groups as their Pet Food CU spending grew by 68.6%. They also illustrate the growing importance of income in Pet Spending – the higher the better. They had by far the biggest increase in Pet Food $ but they also were responsible for 87% of the $16.2B increase in Total Pet spending.

The 2020 pandemic had a slightly positive impact on the <$70K income groups. However, except for the binge buying by the $100>150K group, it was negative for higher incomes. 2021 spending was down because there was not a repeat in the binge but all groups but <$40K & $100>150K spent more per CU on Pet Food in 2021. In fact, the $70>100K & $150K> groups combined to spend $6.6B more on Pet Food in 2021 than in 2020. We should also note that Pet Food spending is up $3.22B from pre-pandemic 2019, +10.3%, a growth rate of 5.0%, which is close to the 5.3% from 2014>19.

Now, Spending by Age Group…

2021 National Numbers: $258.09 per CU (-7.9%); $34.41B; Down $2.44B (-6.6%); 2016>2021 – Up $7.91B (+29.8%)

The overall assessment appears simple. The 55>64 yr-old, young Boomers spent less, while all other groups spent more.

  • 55>64 (18.5% of CU’s) – $275.79 per CU (-52.7%) – $6.75B – Down $7.89B (-53.9%). This group (all Baby Boomers) has been at the forefront of recent major spending swings. In 2015 they upgraded to Super Premium. In 2016 they shopped for a better price. In 2017 they led a deeper penetration of the upgrade. In 2018 they had a -$3.5B reaction to the FDA warning. They began to recover in 2019 but then came 2020, which saw a huge lift in spending. There were 3 major contributing factors. First was panic, binge buying due to pandemic. They also were still recovering from the FDA warning. Finally, the pandemic caused the loss of over 2 million <25 CUs. Many of them moved back with their parents bringing their pets with them. That brought us to 2021. There was no repeat of the panic buy and they “ate up” some of the extra stock. Many of their kids moved out again. Together this caused a big drop in $.
  • 45>54 (16.7% of CU’s) – $292.68 per CU (+18.3%) – $6.58B – Up $1.12B (+20.6%). This group is #1 in income and total CU expenditures. Up until 2015 they were #1 in Pet Food spending. They bought premium food but didn’t “buy in” to Super Premium until 2017. They were negatively impacted by the FDA warning, but they rebounded stronger than any other group. In 2020, their spending dropped significantly. Although some may have dialed back their purchases. It is likely that most found value and cheaper prices by buying on the internet. In 2021, they opted for even more expensive food, spending 24% more per purchase which produced a 20.6% increase in $.
  • 65>74 (16.1% of CU’s) – $291.80 per CU (+17.5%) – $6.13B – Up $0.93B (+17.8%). This group is now all Baby Boomers and growing. They are Boomers so their Pets are a major priority. They spend 1.27% of their total CU expenditures on their pets, the highest percentage of any group. They are also the only group to spend more on Food every year since 2016. They are starting to retire but many are still working (0.6 per CU). Their income was up 5.4% vs 2020, compared to a national increase of 3.7%. They obviously spent some of the extra money on their pets.
  • 35<44 (17.2% of CU’s) – $249.89 per CU (+27.9%) – $5.62B – Up +$1.24B (+28.3%). They are primarily young Gen Xers. They are 2nd in income and CU spending but have the biggest families. Their spending pattern matches the older Gen Xers but is usually less volatile. They spent 17.9% more 8.5% more often for the 2nd biggest increase in $.
  • 25>34 (15.7% of CU’s) – $225.51 per CU (+1.3%) – $4.91B – Up +$0.12B (+2.6%). In recent years the spending pattern of these Millennials has foreshadowed the overall market for the following year. In pandemic 2020 they spent 22.3% more but just essentially held their ground in 2021. They spent 12.9% more, 10.2% less often.
  • 75> (10.9% of CU’s) – $261.20 per CU (+85.3%) – $3.76B – Up +$1.76B (+88.3%). Both the effort and the expense of Pet Parenting become issues as we reach 75+. However, they remain committed to their Pets. They got fully on board with Super Premium Pet Food in 2021. They spent 87.8% more per purchase, 1.2% less often.
  • <25 (4.9% of CU’s) – $98.30 per CU (+31.6%) – $0.66B – Up +$0.27B (+68.2%). Many of this group that had moved back in with their parents, left home again. This is apparent as 27.8% more CUs bought Pet Food 47.3% more often.

In 2020 the 55>64 yr old Boomers binge bought Pet Food. As a result, in 2021 they had a big drop in spending, which was the only decrease by any age group. The Pandemic caused more Pet Parents to focus on the health & wellbeing of their Pet Children. The result is that there is an even broader commitment to high quality, Super Premium Pet Food.

We going to drill deeper, but a little differently than we normally do. The pandemic had a major impact on Pet Food, with the 2020 binge buying by some groups followed by an inevitable big drop in 2021. We have noted that despite the decrease in 2021 $, the average growth rate from 2019>21 was 5.0%, just about equal to the 5.3% rate from 2014>19. We will identify the segments with the biggest change from pre-pandemic 2019 to post-pandemic 2021.

The first thing that you notice is that the biggest increases are radically larger than the biggest decreases. That’s always a good indication of progress. Also, we should note that whether you rent or own your home, you spent more on Pet Food after the pandemic than you did before.

About half of the winners are the “usual suspects”:

  • Advanced College Degree
  • West
  • White, Not Hispanic
  • $200K> Income
  • 2 People
  • Homeowners w/Mtge

However, some are surprises:

  • Retired
  • Center City
  • No Earner, 2+ CUs
  • 75> yrs old

These winners indicate another impact of the pandemic. We focused on home and family, including our Pet Children. Our #1 pet concern became their health & wellbeing. Even low-income groups committed to high quality pet food.

Among the “losers”, you see some of the groups that binge bought Pet Food in 2020 in fear that it might become unavailable:

  • Self-Employed
  • Married, Child 18>
  • $100>149K
  • 55>64
  • Boomers

Each of these groups increased 2020 Pet Food Spending by an average of $7.7B, +118% over 2019. Panic, Binge buying of Pet Food doesn’t get repeated and it doesn’t increase usage. It only increases your backup stock. When you think of the situation, it’s amazing that they got back to a spending level in 2021 relatively close to that of 2019.

The pandemic was a traumatic event for everyone. However, the Pet Food segment has essentially returned to the strong growth rate that it’s had since 2014. Now, we just need a hot new trend to further “fuel the growth fire”.