Next, we’ll turn our attention to Pets and Supplies. We’ll see definite differences from Pet Food as the spending in the Supplies segment is more discretionary. There are other factors too. Spending can be affected by the spending behavior in other segments as consumers often trade $ between segments. However, the biggest factor is price. Many categories have become commoditized so pricing changes can strongly impact Consumers’ buying behavior. In the 2nd half of 2016, deflation began, and Supplies started a 24 month spending lift, totaling $5B. Prices turned up in mid-2018 due to new tariffs and Supplies $ fell a record -$3B in 2019. In the 2020 pandemic, Supplies weren’t a necessity, so sales continued to drop, -$1.7B. In 2021, Pet Parents caught up with their children’s needs and Supplies spending exploded, +$8.65B.
Let’s see which groups were most responsible for the bulk of Pet Supplies spending in 2021 and the $8.65B increase. The first chart details the biggest pet supplies spenders for each of 10 demographic categories. It shows their share of CU’s, share of Supplies spending and their spending performance (Share of spending/share of CU’s). All groups are the same as Total Pet so its skewed younger than Food. The categories are presented in the order that reflects their share of Total Pet Spending. This highlights the differences in importance. All 10 of the groups have over a 60% market share. The big difference is in performance. There are 6 groups with performance over 120%. That’s one more than Total Pet and Pet Food. However, 9 of 10 groups have performance of 117.8% or higher. That’s the most of any segment and indicates that Supplies spending became less balanced in 2021.
- Race/Ethnic – White, not Hispanic (83.2%) down from 83.3%. This large group accounts for the vast majority of spending in every segment. Their share remained essentially stable and their performance grew from 121.8% to 123.9% but they fell from #4 t0 #6 in importance in Supplies Spending. Minority groups account for 32.8% of all CUs but spend only 16.8% of Supplies $. This is actually their biggest share of any segment. All groups spent more. Most of the increase came from Whites but Asians and Hispanics had the biggest % increases.
- # in CU – 2+ people (83.3%) up from 79.5%. Their performance increased to 119.8%, from 113.3%. All CU sizes, including singles had double digit percentage increases. 2 Person CU’s had the biggest $ increase, +$2.91B but 5+ and 4 person CUs had the highest percentage increase and led in performance.
- Housing – Homeowners (76.9%) down from 77.7%. Homeownership is a big factor in pet ownership and spending in all segments. Their share of Supplies $ fell but their performance grew slightly to 118.9%, from 118.0% due to a 1% drop in homeowner’s share of CUs. They also fell from 6th to 8th place in terms of importance for increased Supplies spending. Homeowners with and without a mortgage and renters all spent at least 46% more on Supplies in 2021.
- Area – Suburban & Rural (76.0%) up from 67.1%. This was a spectacular gain in share and their performance grew to 117.8%, from 106.4% in 2020. The big Suburbs, over 2500 population led the way with a $5.99B, +90.8% increase but all areas, including Center City had double digit percentage increases.
- Income Over $70K (68.4%) up from (61.1%) Another big gain in share and their Performance also grew from 140.5%, to 152.7%. Income remains the most important factor in increased Pet Supplies Spending and got even stronger in 2021. After a 24% increase in 2020, the $40>49K group was the only Income segment to spend less on Supplies in 2021. The highest income group, $200K> led the way with a $4B, +165.9% increase. However, all segments but $40>49K spent at least 32% more on Supplies in 2021. Of Note: All incomes over $100K perform above 100%.
- # Earners – “Everyone Works” (73.4%) up from 72.8%. Their performance grew from 127.0% to 129.5% but they fell from #2 to #4 in importance. In this group, all adults in the CU are employed. The # Earners is more important than in Food but it is income that truly matters. All earner/no earner CUs spent more but 2 Earners led the way, +$5.2B. Only CUs with 2 or more earners perform above 100%.
- Education – College Grads (68.3%) up from 56.7%. Higher Education lost market share in 2020 but they got it back in 2021. Their performance level also radically increased from 121.4% to 144.3% and they took over the #2 spot in importance. The only decrease came from those without a High School Diploma. However, College Grads led the way with a $7.7B lift, 89% of the increase for the entire segment. A College Degree generally leads to a higher income and as we have seen, higher income matters a lot in Supplies spending.
- Occupation – All Wage & Salary Earners (60.9%) down from 68.0%. The performance of this group was 102.6%, down from 110.7%. All occupations and Retirees spent more. The big drop in share and performance happened because 50% of the total $ increase came from CUs without a regular wage/salaried worker.
- CU Composition – Married Couples (62.0%) up from 60.0%. Their performance also increased from 123.7% to 130.8% and they stayed 3rd in importance. All types of CU Composition spent more on Supplies. Married Couples with the oldest child 6>17 led the way with a $3.53B increase but the $8.65 spending lift was pretty equally divided between CUs with children, +$4.4B and those with no children, +$4.25B.
- Age – 35>64 (66.3%) up from 60.7%. A big lift from the 55>64 yr-olds caused spending to skew slightly older in 2021 so 35>64 replaced 25>54. The new group’s performance level increased to 126.6% from 113.9% but the age category dropped from #4 to #5 in importance. The <25 Gen Zers spent -$0.03B less but all other age groups had at least a 25% increase. The 35>44 group led the way with a $4B lift that more than doubled their Supplies spending,
Pet Supplies spending skews younger than Food. Spending decreased in the pandemic as consumers focused on needs rather than the more discretionary Supplies. That ended in 2021 as Pet Parents caught up with the many Pet Supplies purchases that had been “put off” for a year or more. However, the increase from 5 to 6 groups with 120+% performance, with 9 over 117.8% indicates increased spending disparity between segments.
Now, we’ll look at 2021’s best and worst performing Pet Supplies spending segments in each category.
Almost all of the best and worst performers are those that we would expect. In Pet Supplies spending, there are only 4 that are different from 2020. That is 1 less than Veterinary, 6 less than Total Pet & Services and 11 less than Pet Food. Supplies has the lowest number of total changes and by far the fewest new winners. As we move deeper into the data, we will see even more differences between the Industry Segments. Changes from 2020 are “boxed”. We should note:
- Income matters in Supplies spending.
- The $200K> was group the top performer in all industry segments but Food, where $150>199K won. However, in Supplies their performance was double that of 2nd place ($150>199K), the biggest gap for any segment.
- # Earners – 2 Earners replaced 3 Earners at the top but again, only these 2 groups performed above 100%.
- Age – Last year 45>54 edged out 35>54 for the win. This year they traded places but the 35>44 yr-olds won by over 70%. Both are mostly Gen Xers which is further proof that Gen Xers “rule” in Supplies spending.
- Region – The West won again but 2 regions performed over 100%. The South returned to its usual spot at the bottom. However, the performance disparity from 1st to last grew from under 20% in 2020 to over 100% in 2021.
- CU Composition – Singles replaced Single Parents at the Bottom. The 2020 winner held their spot. However, in 2021 they were the only Married w/children segment to perform over 100%. Last year they all did.
It’s time to “Show you the money”. Here are segments with the biggest $ changes in Pet Supplies Spending.
In 2019, Tarifflation caused a record $2.98B drop in Supplies spending. 2020 brought the pandemic and pet parents focused on “needs” so the more discretionary Supplies segment fell another $1.65B. In 2021 Pet Parents turned their attention to the multitude of Supplies needed by their “children” and spent a record $8.65B more. In the chart, there are 5 repeats from 2020 – 4 winners and 1 loser. Also, 5 segments switched from last to first and 1 flipped from 1st to last. This is more turmoil than in 2020 when there were 7 repeats but only 2 “flips”. However, the 2021 turmoil was very positive. In 2020 all segments in the Region category spent less. In 2021, all segments in 9 of 12 categories spent more. The record lift in 2021 more than made up for 2 straight years of decreases. Here are the specifics:
- Race/Ethnic – White, Not Hispanic flipped from last to 1st but all racial/ethnic groups spent more.
- Winner – White, Not Hispanic – Supplies: $19.81B; Up +$7.19B (+56.9%) 2020: Asian Americans
- Loser – African Americans – Supplies: $0.75B; Up $0.02B (+3.4%) 2020: White, Not Hispanic
- Comment – Although their share of Pet Supplies $ has fallen from 86.3% in 2018 to 83.2% in 2021, White, Not Hispanics still drive this discretionary segment. They have the highest % of pet ownership and the second highest income. The interaction of these two factors is very clear in the Racial/Ethnic category. Whites had the most to lose and they did in 2020. They also had the most to gain in 2021 and they did that too, +$7.2B.
- Area Type– After 2 years at the bottom, the Big Suburbs flipped from last to 1st, but all areas spent more.
- Winner – Suburbs 2500> – Pet Supplies Spending: $12.58B; Up +$5.99B (+90.8%) 2020: Areas <2500
- Loser – Center City – Pet Supplies Spending: $5.72B; Up $0.73B (+14.6%) 2020: Suburbs 2500>
- Comment– In Supplies spending, more space meant more $ as areas under 2500 pop finished 2nd, +$1.9B (+54%).
- Region – The West flipped from last to first.
- Winner – West – Pet Supplies Spending: $9.38B; Up $5.49B (+140.8%) 2020: Midwest
- Loser – Northeast – Pet Supplies Spending: $3.60B; Up $0.96B (+36.2%) 2020: West
- Comment – In 2018, all regions spent more on Supplies. In 2019 and again in 2020 all Regions spent less. Supplies was the only industry segment that was all negative in both years. 2021 brought a big turnaround, as like 2018, all Regions spent more. The West led the way but with “rounding”, the other regions all had $1+B increases.
- # Earners – 2 Earners won with another last to 1st flip, but all segments spent more.
- Winner – 2 Earners – Pet Supplies Spending: $11.77B; Up +$5.18B (+78.7%) 2020: 1 Earner, Single
- Loser – No Earner, Single – Pet Supplies Spending: $1.17B; Up $0.44B (+60.1%) 2020: 2 Earners
- Comment – Income is a big factor and the # of Earners is important in Supplies Spending. 2 Earner CUs had by far the biggest increase and Everyone Works CUs generated 75% of the spending lift. However, the increase was widespread as CUs with No Earners increased their Supplies spending by 68.3%.
- Housing – The winner and loser held their position from 2020 as all segments spent more in 2021.
- Winner – Homeowner w/Mtge – Supplies: $13.32B; Up +$4.97B (+59.6%) 2020: Homeowner w/Mtge
- Loser – Homeowner w/o Mtge – Supplies: $4.99B; Up $1.57B (+45.7%) 2020: Homeowner w/o Mtge
- Comment – You’re in a good position when the “loser” had an increase of 45.7%. Homeowners w/Mtge supplied most of the $ but Renters actually had the biggest percentage increase, +62.2%.
- Education – Advanced College Degrees held their expected spot at the top.
- Winner – Advanced College Degree – Supp. Spending: $8.84B; Up +$4.76B (+116.7%) 2020: Adv College Degree
- Loser – <HS Grad – Supplies Spending: $0.46B; Down $0.29B (-38.3%) 2020: BA/BS Degree
- Comment – The spending flowed just as expected with those without a High School Diploma having the only decrease and those with a College Degree providing $7.7B (88.7%) of the total increase.
- Income – The low income $40>49K flipped from 1st to last
- Winner – $200K> – Pet Supplies Spending: $6.41B; Up +$4.00B (+165.9%) 2020: $40>49K
- Loser – $40>49K – Pet Supplies Spending: $1.01B; Down -$0.26B (-20.6%) 2020: $70>99K
- Comment – Last year’s winner, $40>49K had the only decrease in spending and the $200K> group moved to the top where they belong. Income does matter a lot in Supplies Spending. The $200K group led with a $4B increase. However, CUs $100K> (30%) provided 71% of the lift and were the only segments that performed at 100+%.
- Age – The winner and loser were both new.
- Winner – 35>44 yrs – Pet Supplies Spending: $7.17B; Up $4.00B (+126.3%) 2020: 25>34 yrs
- Loser – <25 yrs – Pet Supplies Spending: $0.53B; Down -$0.03B (-5.1%) 2020: 55>64 yrs
- Comment: Only <25 spent less. The 55>64 yr-olds finished a surprising 2nd with a $1.7B, +63% increase.
- Generation – No flips/repeats. After 3 consecutive years of winning, Millennials were replaced at the top by Gen X.
- Winner – Gen X – Supplies: $9.40B; Up +$3.91B (+71.2%) 2020: Millennials
- Loser – Gen Z – Supplies: $0.50B; Up $0.10B (+25.4%) 2020: Baby Boomers
- Comment – All generations spent more. Baby Boomers, +$2.31B and Millennials, +$2.30B essentially finished in a tie for 2nd The Silent Generation (Born <1946) then came in a distant 4th, +$0.13B.
- CU Composition – Married, Oldest Child 6>17 held on to the top spot.
- Winner – Married, Oldest Child 6>17 – Supplies: $5.89B; Up $3.53B (+149.4%) 2020: Married, Oldest Child 6>17
- Loser – Married, + Other Adults – Supplies: $0.93B; Up $0.14B (+17.7%) 2020: Married, Couple Only
- Comment – All CU types – with or without children spent more. CUs with children (27.1%) accounted for $4.4B, 50.9% of the increase while CUs without children (62.9%) accounted for $4.2B, 49.1%.
- # in CU – 2 People flipped from last to 1st but all sizes spent more than in 2020.
- Winner – 2 People – Pet Supplies Spending: $8.34B; Up $2.91B (+53.6%) 2020: 5+ People
- Loser – 3 People – Pet Supplies Spending: $3.27B; Up $0.87B (+36.3%) 2020: 2 People
- Comment: 5+ CUs finished 2nd +$2.37B, +117%. They more than doubled Supplies spending and are the only segment with increases in 2020 & 2021. 3 People finished last in $ but Singles had the lowest % increase, +28%.
- Occupation – Managers & Professionals held their spot at the top.
- Winner – Managers & Professionals – Supplies Spending: $7.79B; Up +$2.13B (+37.7%) 2020: Mgrs/Profess.
- Loser – Operators & Laborers – Supplies Spending: $0.64B; Up $0.15B (+30.7%) 2020: Retired
- Comment – Only Managers & Professionals and Self-Employed spent more in both 2020 & 2021. In 2021 all Occupations, including Retirees, spent more on Supplies.
We’ve now seen the winners and losers in Pet Supplies Spending $ for 12 Demographic Categories. In 2020, only 18 of 96 segments spent more and 1 category had no segments with an increase. In 2021, 93 segments spent more, and 9 categories had no segments that spent less. In performance, there were no surprise winners and 10 of 12 were the same as 2020. All of the winners were either 1st or 2nd in CU income for segments in their category, which reflects the importance of income in Supplies spending. However, not every good performer can be “the” winner and some of these “hidden” segments should be recognized for their performance. They don’t win an award, but they deserve…
In 2019, all numbers from these segments were negative. In 2020, 5 were positive. Now, in the spectacular 2021, the worst performer was up over 53%. Some are unexpected and again it is an eclectic mix. Asian Americans have a high income but a low percentage of households with pets. They doubled the $ spent on Supplies. Supplies $ are usually tied to Marriage & Kids but Unmarried Adult 2+ CUs spent $1.6B more. Supplies spending has increasingly skewed younger but 2021 was a strong year for 55>64, mostly young Boomers. Homeowners “rule” Supplies spending but Renters spent over $2B more in 2021. 2020 was the year of “bosses”, but 2021 brought a widespread lift. This included a $1.3B lift from lower-level White Collar workers, Tech/Sls/Clerical. Gen X was the leader in 2021 Pet Spending, but Millennials are still a major player, especially in Supplies where they had a $2.2B, 53% increase. 2021 was arguably the best year in history for the Supplies Segment. We have selected these 6 segments for Honorable Mention but 93 of 96 demographic segments spent more on Supplies in 2021. This group probably should have a lot more members.
While Pet Food spending has shown a definite pattern, Pet Supplies have been on a roller coaster ride since 2009. Many Supplies categories have become commoditized and react strongly to changes in the CPI. Prices go up and spending goes down…and vice versa. Supplies spending has also been reactive to big spending changes in Food. Consumers spend more to upgrade their Food, so they spend less on Supplies – trading dollars. We saw this in 2015. In 2016 the situation reversed. Consumers value shopped for Food and spent some of the “saved” money on Supplies.
That brought us to 2017. Both Supplies and Food prices deflated while the inflation rate in both of the Services segments dropped to lows not seen in recent years. Value was the “word” and it was available across the market. Perhaps the biggest impact was that the upgrade to super premium Food significantly penetrated the market. This could have negatively impacted Supplies Spending, but it didn’t. Supplies’ spending increased in 93% of all demographic segments.
2018 started out as expected with a $1B increase in Supplies and a small lift in Food. Then the government got involved. In July the FDA issued a warning on grain free dog food and spending dropped over $2B. New tariffs were implemented on Supplies and spending flattened out then turned down $0.01B in the 2nd half. The full retail impact of Tariffs hit home in 2019 when spending fell -$2.98B, affecting 97% of all demographic segments.
In 2020 The pandemic caused consumers to focus on needs. That resulted in big spending lifts for Food and Veterinary and big drops in Supplies and Services. Pet Parents traded $. Some good news was that Supplies spending became more balanced. The performance gap between best and worst narrowed by 10.25%.
That brought us to 2021. The overall Retail Market strongly recovered but with no replication of the 2020 buying binge Pet Food $ dropped. In the Supplies segment, the pent-up buying desires of Pet Parents were unleashed. They bought all the Supplies items that had been on purchase “hold” for the last 2 years. The result was the biggest spending increase in history, over twice the size of the previous best. In fact, the $8.65B lift was larger than the annual Supplies spending for all years prior to 2003. While the bulk of the $ increase came from higher income groups the lift was truly widespread as 97% of all demographic segments spent more on Supplies. Prices are still important in Supplies Spending. They remained low throughout 2021 then skyrocketed to record highs in 2022. We’ll see how or if this impacted spending.
Finally – The “Ultimate” Pet Supplies Spending CU consists of 5 people – a married couple, with an oldest child 6>17. They are 35>44 yrs old. They are White, but not of Hispanic origin. They both work and at least one has an Advanced College Degree and is a Manager or Professional. They’re doing well with an income over $200K. They live in a small suburb in the Western U.S. and are still paying off the mortgage on their home.