Petflation 2023 – December Update: Turns up to +5.1% vs 2022

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Inflation turned up in December. The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices fell in Oct>Dec, but in December the CPI actually increased to +3.4% from +3.1% due to a big monthly price drop back in 2022. However, Grocery inflation continues to slow. After 12 straight months of double-digit YOY monthly increases, grocery inflation is now down to +1.3%, 10 consecutive months below 10%. As we have learned, 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 market.

Petflation was +4.1% in December 2021 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 2022. National inflation has slowed considerably since June 2022, but Petflation generally increased until June 2023. It passed the National CPI in July 2022 and at 5.1% in December, it is still 50.0% above the national rate of 3.4%. We will look 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 23 vs 22 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month.
    2. Inflation changes for recent years (21>22, 20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2023 vs 2019 and now vs 2021 to see the full inflation surge.
    4. Average annual Year Over Year inflation rate from 2019 to 2023
  • YTD comparisons (Since it is December, this month’s YTD numbers are the annual inflation rate.)
    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 December 21 to December 23. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in segment patterns and compare them to the overall U.S. CPI. The current year-end numbers from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In December, Pet prices were up from last month as lifts in Vet & Supplies overcame drops in Food & Services.

In December 21, the CPI was +8.5% and Pet prices were +4.5%. Like the CPI, prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation took off. Food prices grew consistently but the other segments had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices continued to grow while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month except for 1 dip by Supplies. In May Products prices grew while Services slowed. In June/July this was reversed. In August all but Services fell. In Sep/Oct this was reversed. In November, all but Food & Veterinary Services fell. In December Supplies & Vet  drove Total Pet prices up 0.7% vs Nov. Petflation has been above the CPI since Nov 22.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices turned up Jan>Sep, then dipped in Oct>Dec, but 35% of the 19.4% increase in the 48 months since December 2019 happened in the 6 months from January>June 2022 – 12.5% of the time.
  • Pet Food – Prices were at or below Dec 2019 levels from Apr 20>Sep 21. They turned up and grew, peaking in May 23. In Jun>Aug they dipped, grew Sep>Nov, then fell in Dec. 93% of the 23% increase has occurred since 22.
  • Pet Supplies – Supplies prices were high in Dec 19 due to added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to Dec 19 prices and essentially stayed there until 2022. They turned up in January and hit an all-time high, beating the 2009 record. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct setting a new record. Prices stabilized in Nov>Dec but turned up in Jan>Feb 23. They fell in March, peaked at a new record in May, then continued their rollercoaster ride with a big lift in Dec.
  • 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 Mar>June. It turned up again July 22>Mar 23 but the increase slowed to +0.1% in April. Prices fell -0.3% in May, turned up again, peaking in Aug, then fell in Sep>Dec.
  • Veterinary – Inflation has been consistent. Prices turned up in March 20 and grew through 21. A surge began in December 21 which put them above the overall CPI. In May 22 prices fell and stabilized in June causing them to fall below the National CPI. However, prices rose again and despite some dips they have stayed above the CPI since July 22. In 23 prices grew Jan>May, stabilized Jun>Jul, fell in Aug, then grew Sep>Dec to a new high.
  • Total Pet – Petflation is a sum of the segments. In Dec 21 the price surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in Dec, grew Jan>May 23 (peak), fell Jun>Aug, grew in Sep/Oct, then fell in Nov. In December big increases in Veterinary & Supplies overcame drops in Food & Services to push Total Pet close to their May 23 high point. Petflation has been above the CPI since Nov 22

Next, we’ll turn our attention to the Year Over Year inflation rate change for December and compare it to last month, last year and to previous years. We will also show total inflation from 21>23 & 19>23. Petflation rose to 5.1%, up from 4.3% in November and it is now 1.5 times the National rate. The chart will allow you to compare the inflation rates of 22>23 to 21>22 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. Again, we’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were -0.1% from November but were +3.4% vs December 22, up from +3.1% last month. Grocery inflation is down again, to +1.3% from +1.7%. 4 of 9 categories had a price decrease from last month – National CPI, Groceries, Pet Food & Services. There were 5 in November. That’s 4 months in a row for Pet Services. The national YOY monthly CPI rate of 3.4% is up but still only 52% of the 21>22 rate. The 22>23 inflation rate is below 21>22 for all categories but Veterinary Services. In our 2021>2023 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred in only 4 segments – Total Pet, Pet Food, Pet Supplies and Veterinary – All Pet. We should also note that the segments with the lowest percentages are Haircuts, Pet Services and Medical Services. Service Segments have generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Services expenditures account for 62.3% of the National CPI so they are very influential. We also see that Pet Products have a very different pattern. The 21>23 inflation surge provided 94.1% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were just starting to recover from a deflationary period.

  • U.S. CPI– Prices are -0.1% from November. The YOY increase is 3.4%, up from 3.1%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 55% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 2 consecutive drops, now another lift – not good news! The current rate is 48% below 21>22 but the 21>23 rate is still 10.0%. That is 51.5% of the total inflation since 2019, but down from 54% last month.
  • Pet Food– Prices are -0.1% vs November and +5.1% vs December 22, down from 5.6%. However, they are still 3.9 times the Food at Home inflation rate. The YOY increase of 5.1% is being measured against a time when prices were 17.0% above the 2019 level, but that increase is still 1.5 times the pre-pandemic 3.4% increase from 2018 to 2019. The 2021>2023 inflation surge has generated 91.3% of the total 23.0% inflation since 2019.
  • Food at Home – Prices are down -0.5% from November. The monthly YOY increase is 1.3%, down from 1.7% in November and radically lower than Jul>Sep 2022 when it exceeded 13%. The 25.3% Inflation for this category since 2019 is 30% more than the national CPI and remains 2nd to Veterinary. 52% of the inflation since 2019 occurred from 2021>2023. The pattern mirrors the national CPI, but we should note that Grocery prices began inflating in 2020>2021 then the rate accelerated. It appears that the pandemic supply chain issues in Food which contributed to higher prices started early and foreshadowed problems in other categories and the overall CPI tsunami.
  • Pets & Supplies– Prices were up 1.4% from November and 0.1% vs December 2022. They still have the lowest increase since 2019. As we noted, prices were deflated for much of 2021. As a result, the 2021>2023 inflation surge accounted for 100% of the total price increase since 2019. They reached an all-time high in October 2022 then prices deflated. 3 months of increases pushed them to a new record high in February. Prices fell in March, bounced back in Apr/May to a new record high, fell in Jun>Aug, grew in Sep>Oct, fell in November, then grew sharply in December.
  • Veterinary Services – Prices are up +1.2% from They are +10.8% from 2022, again the highest rate in the Pet Industry. Plus, they are still the leader in the increase since 2019 with 30.9% compared to Food at home at 25.3%. For Veterinary Services, relatively high annual inflation is the norm. However, the rate has increased during the current surge, especially in 23, so 66% of the 4 years’ worth of inflation occurred in the 2 years from 2021>2023.
  • Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 20>21. Prices grew 0.4% from November but are -0.5% vs 22. Prices have now deflated for 8 straight months. Medical Services are not a big part of the current surge as only 39% of the 2019>23 increase happened from 21>23.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021. December 23 prices were -0.02% from November and only +0.7% vs 22, which is down 50% from 1.4% last month but an amazing 91% drop from 8.0% in March. Now, only 49% of their total 17.0% inflation since 2019 occurred from 21>23.
  • Haircuts/Other Personal Services – Prices are up 0.1% from November and +3.7% from 2022, 2 consecutive months below 4.0%. Inflation has been rather consistent as 48% of the inflation from 19>23 happened from 21>23.
  • Total Pet– Petflation is 53% lower than the 21>22 rate, but still 1.5 times the U.S. CPI. For December, +5.1% is the 4th highest rate since 1997 (2022: 10.9%; 2008: 9.7%; 2007: 5.5%). Vs November, prices grew in Vet & Supplies so Total Pet was +0.7%. An Nov>Dec price increase has happened in 6 of the last 7 years so it was no surprise. Veterinary & Food are still the Petflation leaders, but all segments have an influence. Pet Food has been immune to inflation as Pet Parents are used to paying a lot, but inflation can reduce purchase frequency in the other segments.

Now, let’s look at the YTD (Year-End) numbers

The inflation rate for 22>23 is the highest for 2 of 9 categories – both Pet, Pet Food and Veterinary Services. The 22>23 rates for Haircuts, Pet Services & Total Pet are slightly below 21>22. However, the CPI, Pet Supplies, Medical Services and Food at Home are significantly down from 21>22. The average annual national inflation in the 4 years since 2019  is 4.5%. Only 2 of the categories are below that rate – Medical Services (2.7%) and Pet Supplies (2.4%). It comes as no surprise that Veterinary Services has the highest average rate (6.5%), but 3 other categories are over 5% – Groceries (5.8%), Pet Food (5.3%) & Total Pet (5.1%).

The U.S. government began tracking inflation in 1913. It is a critically important measurement as pricing affects spending behavior and the economy. Moreover, the income of over 90 million people is directly tied to changes in the CPI. The US BLS began tracking pricing in Total Pet and the individual industry segments in 1997. Here are some 2023 comments.

  • U.S. CPI – The 2023 rate was 4.1%, the 3rd highest since 1997, trailing 2022 (8.0%) and 2021 (4.7%). It was down 49% from 21>22 and 8.9% less than the average increase from 2019>2023, but it’s 60% more than the average annual increase from 2018>2021. 65% of the 19.2% inflation since 2019 occurred from 2021>23. Inflation is a big problem that started recently.
  • Pet Food – Inflation was 10.6% in 2023, edging out 2022 (10.2%) for 2nd place. The top spot still belongs to 2008 (11.1%). Pet Food has the highest 22>23 & 21>23 rates on the chart. Deflation in the 1st half of 2021 kept YTD prices low then prices surged in 2022. 96% of the inflation since 2019 occurred from 2021>23.
  • Food at Home – The 2023 inflation rate slowed from 11.2% in 2022 to 5.0% but was the 3rd highest rate since 1997 (also trailing 2008’s 6.4%) It also still beat the U.S. CPI by 22%. You can see the impact of supply chain issues on the Grocery category as 67% of the inflation since 2019 occurred from 2021>23.
  • Pets & Pet Supplies – Prices increased in December, but the 2023 inflation rate was only 2.6%, 6th highest since 1997. 1st place belongs to 2022 (7.7%). Supplies’ prices deflated significantly in both 2020 & 2021 which helped to create a very unique situation. Prices are up 10.1% from 2019 but 105% of this increase happened from 2021>23. Prices are up 10.6% from their 2021 “bottom”.
  • Veterinary Services – At 9.4%, 2023 beat 8.8% in 2022 and is now the highest inflation rate in history for Veterinary Services. On the chart they are #1 in inflation since 2019 but they have only the 2nd highest rate since 2021. At +6.5%, they have the highest average annual inflation rate since 2019. Inflation was high and consistent, around 4% from 2019>2021. It took off in 2022 & worsened in 2023. Strong Inflation is the norm in Veterinary Services.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. In 2023 prices have generally been deflating and finished the year at -0.3%, the only deflation in any segment. It was also the only deflationary year since the US BLS began tracking this category in 1935.
  • Pet Services – The January 2023 increase of 8.4% set a new monthly record. Prices have dropped Sep>Dec and they finished the year at 5.7%, tied for 2nd place with 2008. 2022 is the winner at 6.3%. Their price surge started in 2021 when inflation jumped to 4.7% from 2.5% in 2019 & 2020. It appears to have ended in late 2023 but prices are still +20.6% vs 2019.
  • Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. The 4 highest inflation years since 1997 were 2022 (5.4%), 2021 (5.1%), 2023 (4.9%) and 2020 (4.4%). Consumers are paying 21% more than in 2019, which usually reduces the frequency.
  • Total Pet – The Nov>Dec price lift was normal, so it had little impact on the annual numbers. Petflation in 2023 was 8.0%, 2nd place all time to 8.9% in 2022. It only finished 2nd because the rate slowed significantly in the 2nd half of the year. In the 1st half it was 44% higher than the 2022 rate. There was a mixture of roller coaster patterns, but inflation slowed somewhat for all segments during the 2nd  half. However, all did end up with high annual inflation rates and Veterinary even set a new record. 2023 Petflation is about double the CPI. In 2021 it was 43% below the CPI.

Petflation is slowing, but it is still strong, with the 4th highest rate for December and the 2nd highest annual rate in history. It is also double the CPI. In 2021 it was only half of that rate. Even if it slows to 0%, you can’t ignore the fact that inflation is cumulative. Pet prices are 17.7% above 2021 and 22.2% higher than 2019. Those are big lifts. Since price/value is the biggest driver in consumer spending it is likely to affect the Pet Industry. The Services segment will be the least impacted as it is driven by high income CUs. Supplies and Veterinary will likely see a reduction in purchase frequency. Food is the most needed segment so the response will be complex. It could include a movement to online shopping, switching to private label or even downgrading the quality of food. We’ll see what happens.

2022 Pet Food Spending was $38.69B – Where did it come from…?

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As we continue to drill ever deeper into the demographic Pet spending data from the US BLS, we have now reached the level of individual Industry segments. We will start with Pet Food, the largest and arguably most influential of all. We have previously noted the trendy nature of Pet Food Spending. In 2018 we broke a pattern which began in 1997 – 2 years up then spending goes flat or turns downward for a year. We expected a small increase in 2018 but what we got was a $2.27B decrease (-7.3%). This was due to the reaction to the unexpected FDA warning on grain free dog food. A pattern of 20+ years was broken by 1 statement. The grain free warning lost credibility and spending rebounded in 2019, +$2.35B (+7.1%). In 2020 the market was hit by an even bigger outside influence – the pandemic. The impact varied by segment. In Pet Food, it created a wave of panic buying out of fear of shortages, resulting in a $5.65B (18.1%) lift. The panic buying wasn’t repeated in 2021 resulting in a $2.44B (-6.6%) drop in spending. In 2022 spending returned to more “normal” behavior with a strong $4.29B, +12.5% increase to $38.69B, a new record high. Let’s take a closer look.

First, we’ll see which groups were most responsible for the bulk of Pet Food spending and the $4.29B increase. The first chart details the biggest pet food spenders for each of 10 demographic categories. It shows their share of CU’s, share of pet Food spending and their spending performance (Share of spending/share of CU’s). All are the same as Total Pet. The categories are presented in the order that reflects their share of Total Pet Spending. The big difference is that $70K> income has the smallest share of Food $. This difference is magnified in performance. Being Married is the most important factor in Food spending. In Total Pet and other segments, Income is the most important. Food spending is also a little more balanced than Total Pet Spending. This is evident by the fact that the Performance of only 4 groups exceeds 120%. In Total Pet and Pet Products there were 5. In 2022, Pet Food accounted for 63.8% of Pet Products $ and 37.7% of Total Pet. This is better than 59.1% and 34.4% in 2021 but still far below 70.8% of Pet Products and 44.0% of Total Pet in 2020 and even 65.0% and 39.5%  in pre-pandemic 2019. Spending is a little more balanced between industry segments.

  1. Race/Ethnic – White, not Hispanic (83.4%) – down from 84.2%. This large group accounts for the vast majority of spending in every segment. They lost share and their performance decreased to 124.1% from 125.2%, but this category moved up from #4 to a tie for #3 in terms of importance in Pet Food Spending demographic characteristics. Hispanics, African Americans and Asians account for 32.8% of U.S. CU’s, but they spend only 16.6% of Pet Food $. Asians were the only minority to spend less on Food. Hispanics and African Americans spent $1.2B more.
  2. Housing – Homeowners (80.8%) – down from 81.0%. Homeownership is a huge factor in pet ownership and pet spending. In 2022, homeowners lost a little share and their performance fell from 125.1% to 124.1%. However, homeownership moved up from 5th to a tie for 3rd in importance. Renters were +13.8%. Homeowners were +12.1%
  3. # in CU – 2+ people (80.2%) – up from 79.1%. The share of market grew for 2+ CUs and is again back over 80% for Pet Food. Their performance also grew from 113.8% to 116.3% but their rank stayed at #6. Only 2 person CUs spent less, but 79% of the increase in Food $ came from a $2.3B lift from 3 people CUs and a $1.1B lift by 4 people CUs. Although Singles spent more, their increase was only 6.1%, less than half of the 14.1% for 2+ CUs. This drove the increase in share and performance. Singles are the only CU size performing below 100% – 63.7%.
  4. Area – Suburban + Rural (74.1%) up from 69.4%. Their performance grew from 107.6% to 113.1%. (still 8th) Only Center City spent less but 98% of the Food increase came from a $4.2B, +33.0% lift by Suburbs over 2500 population.
  5. Education – Assoc. Degree> (66.6%) – down from 71.5%. College Grads share fell below 60% due to a big lift by <College Grads. The group now includes Associate’s degrees. Performance fell from 123.9% to 115.4% (No longer in the 120+% Club) and higher education fell from 3rd to 7th in importance in increased Pet Food Spending.
  6. Income – Over $70K (60.5%) – down from 63.1%. Their performance also dropped from 140.9% to 127.9% and they fell from 1st to 2nd in importance. High income is still very important in Pet Food Spending but the bar was lowered slightly in 2022. The 50/50 $ divide fell from $92K in 2021 to $91K in 2022. The <$100K group was up $2.2B while $100K> was up $2.09B – pretty balanced. The only spending decrease came from $70>99K, -$0.4B. This caused the drop in share and performance. Pet ownership is common across all income levels but only groups with an income over $70K perform at 100+%.
  7. # Earners – “Everyone Works” (62.9%) – up from 57.6%. This was a huge increase from last year and their performance also increased from 101.7% to 107.8%. They moved up from 10th (last) to 9th in importance. No Earner, 2+ CUs spent $2.2B less while 2+ Earners CUs spent $4.5B more. This drove the lift in share & performance.
  8. Occupation – All Wage & Salaried Workers (62.4%) – up from 60.5% – Only Retirees spent less so this workers group’s performance also grew slightly from 102.0% to 103.4%. However, Occupation is now last in importance in Pet Food spending.
  9. CU Composition – Married Couples (61.3%) – down from 64.8%. They lost share and their performance fell from 136.8% to 128.3%, but they moved up to #1 in importance. Married, Couples Only and those with an oldest child 6>17 years old were the only segments that spent less so Married CUs had a smaller increase than Unmarried CUs.
  10. Age – 35>64 (61.1%) – up from 55.0%. This younger group replaced 45>74 yr-olds. Their performance grew from 105.0% to 117.2% and age moved up from #7 to #5 in importance. 45>64 is in both groups. The change happened because the 35>44 share is 18.6% while 65>74 is 17.2%. Only 25>34 and 75> spent less on Pet Food in 2022.

All of the big spenders for Pet Food are the same as Total Pet. Last year there was 1 special group and in 2020 there were 3. 2022 brought a return to a more normal spending pattern and spending became slightly more balanced. This is best illustrated by the fact that in 2022 the performance for only 4 groups exceeds 120% with the highest at 128.3%. In 2021 there were 5, with 3 over 130%. In 2020 there were 8 at 120+%, 5 of which had a performance level above 130%.

Now, we’ll look at 2022’s best and worst performing Pet Food spending segments in each category.

Almost all of the best and worst performers are the ones that we would expect. 2022 produced just 1 surprise – Married, Oldest Child <6 won in CU Composition. There are 4 different winners from 2021 and 7 different losers. This is much different from 2021, which had 10 new winners and 5 new losers. This reflects a more stable environment among the winners. Changes from 2021 are “boxed”. We should also note the performance gap between winner and loser narrowed in 9 categories. Overall, the average gap fell from 82.8% in 2021 to 73.5%. More evidence of increased spending balance. Here are some more performance specifics:

  • Income No changes. Although the gap narrowed from 141% to 112%, this is the only category with a gap over 100%.
  • # Earners – The highest income group moved to the top, but the gap narrowed from 90% to 71%.
  • Occupation – Mgrs/Prof. stayed on top, but Service Workers replaced Blue Collar & the gap widened – 45% to 54%
  • Age, Generation- The high income, 45>54 Gen Xers stayed on top. The oldest replaced the youngest on the bottom.
  • Race – The usual winner and loser. The gap narrowed from 103.2% to 93.9%.
  • Education – Higher education with its higher income mattered in Pet Food Spending but the gap was only 53.7%.
  • Housing – Owning a home is always important. The usual winner & loser returned. The gap narrowed by only 4.1%.
  • CU Comp., CU Size– Married, Oldest Child <6 was a surprise. Singles replaced Single Parents. 3 replaced 5+ CUs.
  • Region – Midwest flipped from Worst to Best and the South took their place at the bottom.
  • Area – The areas <2500 population stayed on top and Center City regained its usual position as the worst performer.

It’s time to “Show you the money”. Here are segments with the biggest $ changes in Pet Food Spending.

There are 2 repeats from 2021. 6 losers won last year and 7 of the winners were 2021 losers. 54% flipped from 1st to last or vice versa, down from 71% in 2021. Almost all of the winners are expected. The only Surprise winner was HS Grad or Less. The surprising losers were Adv. College Degree, 2 People and Married Couple Only. Spending grew 12.5% as 82% of 96 demographic segments spent more. Plus, all segments in the Housing category had increases. Here are the specifics:

  • Area Type – Center City, the 2021 surprise winner, had the only spending decrease, and flipped to last.
    • Winner – Suburbs 2500> – Pet Food Spending: $16.86B; Up $4.19B (+33.0%)          2021: Center City
    • Loser – Center City – Pet Food Spending: $10.05B; Down $0.49B (-4.7%)                  2021: Areas <2500
    • Comment – The Areas <2500 also spent a little more, +$0.59B (+5.3%).
  • Race/Ethnic – White, Not Hispanics flipped to the top and Asians replaced them at the bottom.
    • Winner – White, Not Hispanic – Pet Food Spending: $32.26B; Up $3.28B (+11.3%)            2021: Hispanic
    • Loser – Asian – Pet Food Spending: $0.84B; Down $0.16B (-15.9%)                                        2021: White, Not Hispanic
    • Comment – The U.S. is becoming more racially/ethnically diverse but White, Not Hispanics are by far the biggest spender in every Pet Segment. Asian Americans had the only decrease, but it was not surprising after growing 130% in 2021. Pet Food spending became more balanced. Both African Americans & Hispanics were up 20+%.
  • Education – Higher education fell in importance in Pet Food spending as HS Grads or Less flipped to the top.
    • Winner – HS Grads or less – Food Spending: $7.78B; Up $3.04B (+64.0%)                        2021: BA/BS Degree
    • Loser – Adv College Degree – Food Spending: $10.03B; Down $0.36B (-3.5%)                 2021: HS Grads or less
    • Comment – The $3.04B lift was almost equally divided between those with only a HS Diploma and those without. Those with an Associate’s Degree finished in 3rd place with a $1.14B, 36.5% increase. In fact, only those with an Advanced College Degree spent less on Pet Food in 2022. Note: In 2021 they were up $2.63B, +33.9%
  • Region – The Midwest flipped from last to 1st.
    • Winner – Midwest – Pet Food Spending: $9.58B; Up $2.99B (+45.5%)                           2021: South
    • Loser – West – Pet Food Spending: $8.56B; Down $0.43B (-4.7%)                                   2021: Midwest
    • Comment – In 2021, only the Midwest spent less. In 2022, it was only the West, but their decrease was only -4.7%.
  • # Earners – The winner and loser flipped putting both in a more normal position.
    • Winner –– 2 Earners – Pet Food Spending: $15.08B; Up $2.99B (+24.7%)                     2021: No Earner, 2+ CU
    • Loser – No Earner, 2+ CU – Pet Food Spending: $3.13B; Down $2.22B (-41.5%)          2021: 2 Earners
    • Comment – 1 Earner, Singles were the only other segment to spend less, and their drop was only -$0.01B (-0.3%). All other segments were up at least 17.5%. The number of earners is definitely less important than income.
  • # in CU – 2 People CUs flipped to the bottom.
    • Winner – 3 People – Pet Food Spending: $7.17B; Up $2.26B (+46.1%)                       2021: 2 People
    • Loser – 2 People – Pet Food Spending: $14.23B; Down $0.34B (-2.3%)                     2021: 4 People
    • Comment: Only 2 People CUs spent less on Pet Food in 2022. While 3 People CUs had the biggest increase, 4 People CUs were also up $1.11B (+25.5%) and 5+ CUs grew by $0.82B (+24.3%).
  • Housing – Homeowners w/Mtges held onto their expected position on top.
    • Winner – Homeowners w/Mtge – Food: $20.90B; Up $2.13B (+11.3%)                        2021: Homeowners w/Mtge
    • Loser – Renters – Food: $7.44B; Up $0.90B (+13.8%)                                                       2021: Homeowners w/o Mtge
    • Comment – All segments spent more so Renters “lost” with a $0.90B increase. Homeowners w/o Mtge, also spent $1.3B more so they are at $10.05B, +22.5% vs 2019. They have recovered from the binge & drop in 20/21.
  • Occupation – After 4 years away, Managers & Professionals returned to the Top. Retirees flipped to the bottom.
    • Winner – Mgrs & Professionals – Pet Food Spending: $12.97B; Up $2.12B (+19.6%)               2021: Retired
    • Loser – Retired – Pet Food Spending: $7.13B; Down $1.31B (-15.5%)                                          2021: Self-Employed
    • Comment – Only Retirees spent less. All occupations including A/O & Unemployed spent more. Mgrs/Profess. had the biggest $ lift but the highest % increase belonged to Blue Collar Workers, +40.2%.
  • Generation – Gen X held on to the top spot.
    • Winner – Gen X – Pet Food Spending: $13.08B; Up $1.96B (+17.6%)                             2021: Gen X
    • Loser – Born <1946 – Pet Food Spending: $1.88B; Down $1.73B (-47.9%)                   2021: Baby Boomers
    • Comment – Much of the 2020>21 Pet Food spending boom and bust was due to the Boomers. Gen X has now taken over and held on to the top position. Only those Born <1946 spent less on Pet Food in 2022. After their big drop in 2021 the Boomers again spent more on Pet Food. However, their $1.50B increase ranked only 3rd behind Gen X, +$1.96B and Millennials, +$1.56B. Gen Z also spent +158% more so they are now entering the “game”.
  • Age – The Winner and loser both flipped.
    • Winner – 55>64 yrs – Pet Food Spending: $8.60B; Up $1.86B (+27.5%)                        2021: 75+ yrs
    • Loser – 75+ yrs – Pet Food Spending: $2.23B; Down $1.53B (-40.8%)                            2021: 55>64 yrs
    • Comment: Only 25>34 & 75> spent less. The big drop by 75> may have been from them downgrading their food due to high inflation. The 55>64 group is about 70% high income Boomers which produced most of their lift.
  • CU Composition – Again the winner and loser both flipped.
    • Winner – Married, Oldest Child 18> – Food: $4.04B; Up $1.46B (+56.7%)             2021: Married, Couple Only
    • Loser – Married, Couple Only – Food: $10.82B; Down $0.78B (-6.7%)                    2021: Married, Oldest Child 18>
    • Comment – Only Married, Couple Only and those with an Oldest Child 6>17 spent less. There were strong increases in a number of unexpected segments. Those with an Oldest Child <6 were +$1.24B. Single Parents were +$1.22B as were Unmarried, 2+ All Adult CUs. Overall, CUs with Children were +3.29B.
  • Income – In a second consecutive flip, $100>149K flipped again to the top.
    • Winner – $100 to $149K – Pet Food Spending: $6.71B; Up $1.25B (+23.0%)            2021: $150 to $199K
    • Loser – $70 to $99K – Pet Food Spending: $5.81B; Down $0.40B (-6.5%)                  2021: $100 to $149K
    • Comment – The $70>99K group was the only segment to spend less. Spending increases were widespread but $50>69K was +$1.23B, a very close 2nd. $40>49K was +40.5%. This made <$70K +20.5% compared to $70> +7.8%.

We’ve now seen the “winners” and “losers” in terms of increase/decrease in Pet Food Spending $ for 12 Demographic Categories. In 2020, very specific segments binge bought Pet Food. In 2021, their pets “ate up” the overstock so Pet Food spending fell. 2022 brought a new challenge, strong inflation. However, most of America remains firmly committed to high quality Pet Food. Super premium Food already had high prices, so income is still very important in Pet Food spending. The pandemic and inflation have accelerated value shopping, especially on the internet. The result was 82% of all demographic segments spent more on Pet Food in 2022 producing a $4.29B, 12.5% increase. We have identified the winning segments in performance and $ increase but they were not alone. Not every good performer can be a winner. Some “hidden” segments should also be recognized for performance. They don’t win an award, but they get…

HONORABLE MENTION

This group clearly demonstrates that the lift in Pet Food spending was very demographically widespread. The first thing that you notice is that the youngest Americans have become much more committed to Pet Parenting. Gen Z and the <25 group (All Gen Z) more than doubled their Pet Food spending in 2022. Also, Super Premium Pet Food prices are high and inflated in 2022 but lower income groups still “found a way”. Single Parents, African American, Blue Collar Workers and $40>49K CUs all have low incomes and are under tremendous financial pressure. They often finish at the bottom in performance, but not in 2022. Single Parents more than doubled their Pet Food spending and the other groups increased spending over 40%. Pet Parenting is widespread, and all are committed to the welfare of their children.

Summary

Pet Food has been ruled by trends over the years. The drop in 2018 due to the FDA grain free warning broke a pattern of 2 years up followed by 1 year of flat or declining sales which had been going on since 1997. This trendy nature increased with the first significant move to premium foods in 2004. The Melamine crisis in 2007 intensified the pattern and resulted in a series of “waves” which became a tsunami with the introduction of Super Premium Foods.

The 25 to 34 yr old Millennials were the first to “get on board” with Super Premium in the 2nd  half of 2014. In 2015, many more groups began to upgrade. The result was a $5.4B spending increase. These consumers were generally more educated and had higher incomes. Unfortunately, they often paid for the upgrade by spending less in other segments. In 2016 the anticipated drop in spending happened. Many value shopped for their new food and found great deals, especially online. They spent some of the $3B “saved” Food $ in other segments but not enough to make up for the drop in Food. Total Pet Spending was down $0.46B. In 2017 we were ready for a new “wave”. However, due to a price competitive market, what we got was a deeper penetration of Super Premium. These upgraders were mostly middle-income and not college educated. The result was a $4.6B increase but this time there was no trading of segment $.

In 2018 we were “due” a small annual increase in Pet Food. Spending in the 1st half was +$0.25B but then the bottom dropped out as spending fell $2.51B in the 2nd  half in reaction to the FDA warning on grain free dog food. The big decrease in spending came directly from the groups who had fueled the 2017 increase. In fact, 71% of the demographic groups with the biggest change in Pet Food $ switched from first to last or vice versa from their position in 2017.

That brought us to 2019. The FDA warning was false, so Pet Parents returned to Super Premium or even pricier options. Supplement $ also grew as the health of their Pet Children remained the #1 priority. Pet Food $ grew $2.35B with 75% of demographic segments spending more. Income and related categories mattered more, and Pet Food Spending became less demographically balanced. In 2020 the Pandemic accelerated this trend. Fear of shortages led to binge buying and a $5.65B increase. This behavior was driven by very specific groups. This spending disparity was manifested in the fact that the performance of 8 of 10 big spending groups exceeded 120% while 49% of all segments spent less.

In 2021, the retail market strongly recovered but the turmoil in Pet Food continued. The 2020 binge buying didn’t increase usage, so Pet Food spending fell by $2.44B. Every segment with the biggest increase in 2020 had the biggest decrease in 2021. The resulting drop in $ hid the fact that 65% of all demographic segments spent more on Pet Food.

In 2022 the situation returned to a more normal, balanced pattern in spending. Pet Parents renewed their commitment to high quality food for their children. Despite strong inflation, 82% of demographic segments increased spending generating a $4.29B (+12.5%) lift and reaching a new record high of $38.69B – even exceeding the 2020 binge by $1.85B.

Finally – The Ultimate Pet Food Spending CU is 3 people – a married couple with a child over 18. They are 45>54 years old and White, but not Hispanic. Everyone works and at least one has an Advanced College Degree and is a Manager or Professional. They earn $150>$199K but are still paying the mortgage on their house in a small suburb in the Midwest.

2022 Pet Products Spending was $60.63B – Where did it come from…?

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We looked at the Total Pet Spending for 2022 and its key demographic sources. Now we’ll start drilling down into the data. Ultimately, we will look at each individual segment but the first stop in our journey of discovery will be Pet Products – Pet Food and Supplies. Food and Supplies are the industry segments that are most familiar to consumers as they are stocked in over 200,000 U.S. retail outlets, plus the internet. Every week over 20,000,000 U.S. households buy food and/or treats for their pet children. Pet Products accounted for $60.63B (59.0%) of the $102.71B in Total Pet $ in 2022. This was up $2.42B (+4.2%) from the $58.21B that was spent in 2021. Pet Food spending rebounded after the big drop in 2021 following the binge buy in 2020. Supplies had its own spending rollercoaster. After falling during the 2020 pandemic, there was a record surge in 2021. This couldn’t be repeated so spending fell in 2022.

Overall, in 2022 Pet Food spending rose +$4.29B, while Supplies spending fell a -$1.86B. We’ll combine the data and see where the bulk of Pet Products spending comes from.

We will follow the same methodology that we used in our Total Pet analysis. First, we will look at Pet Products Spending in terms of the same 10 demographic category groups that were responsible for 60+% of Total Pet spending. Then we will look for the best and worst performing segments in each category and finally, the segments that generated the biggest dollar gains or losses in 2022.

The first chart details the biggest pet product spenders for each demographic category. It shows their share of CU’s, share of pet products spending and their spending performance (spending share/share of CU’s). Although their share of the Pet Products $ may be different from their share of the Total Pet $, the biggest spending groups are the same. The categories are shown in the order that reflects their share of Total Pet Spending. This highlights the differences. In Pet Products spending share, larger CUs and age are more important while income matters less. However, we should note that, like Total Pet Spending, Income is the highest performing demographic characteristic. In Pet Products there are only 4 groups with a performance rating of 120+%, 1 less than last year and 1 less than Total Pet in 2022. This reflects the fact that Pet Products spending, especially on Food, is spread more evenly across the category segments.

  1. Race/Ethnic – White, not Hispanic (82.7%) down from 83.8%. They are the 2nd largest group but still account for the vast majority of spending in every segment. Their performance fell from 124.8% to 123.1% but they moved up from 4th to 3rd in terms of importance in Pet Products Spending demographic characteristics. Hispanics, African Americans and Asian American account for 32.8% of U.S. CU’s, but they only spend 17.3% of Pet Products $. Although the minority share of Pet Poducts $ is low, it has improved considerably from 12.8% in 2020. Pet ownership is relatively high in Hispanic households, but it is significantly lower for African Americans and Asians.
  2. Housing – Homeowners (80.0%) up from 79.3%. Controlling your “own space” has long been the key to pet ownership and more pet spending. Their performance grew from 122.6% to 123.0% and they officially moved up from 5th to 4th in terms of importance for increased pet products spending. Although both Homeowners and Renters spent more on Pet Products in 2022, 76% of the increase came from Homeowners w/o a Mortgage. Those with a Mortgage spent $0.51B, +1.6% more but that was much better than Renters. Overall, Homeowneers were +5.2% while Renters were +0.6%. This disparity caused the positive change in Share & Performance for Homeowners.
  3. # in CU – 2+ people (81.4%) up from 80.8%. The share for Pet Products is higher than for Total Pet, 80.8%. If you put 2 people together, pets very likely will follow. If you have a pet, you must spend money on food and supplies. Their performance of 117.9% is up from 116.2%. Only 2 & 5 People CUs spent less but this was overcome by a 33% lift from 3 People CUs. Singles were only +1.0%. This combination improved share & performance for 2+ People CUs.
  4. Area – Suburban & Rural (72.7%) up from 72.1%, but their performance fell from 111.8% to 111.0%. Suburban households are the biggest pet spenders and they are growing in popularity. The increase in the number of CUs is what pushed the group performance down. Rural CUs alone grew by 1331, +5.5%.
  5. Education – Assoc Degree> (68.6%) down from 73.4%. Their performance level also dropped sharply from 127.2% to 118.9%. They fell from 2nd to 5th in importance and are no longer in the 120+% club. The drops in share and performance are only due to a $3.5B decrease in spending by College Grads. All groups with less than a College Degree spent more on Pet Products. The Associates Degree group did especially well, +46.5%.
  6. Income – Over $70K (64.3%, down from 65.3%). Pet Parenting is common in all income groups but money is a big driver in the spending behavior for all industry segments. Although their performance fell to 136.0% from 145.7%, CU income continues to be the single most important factor in increased Pet Products Spending. As a general rule,  Higher Income = Higher Pet Products Spending. In 2022 there was an up & down rollercoaster in Pet Products spending but performance grew with income. All and only, income segments over $70K perform at 100+%.
  7. # Earners – “Everyone Works” (65.3%) up from 64.1%. Their performance is 111.9%, down from 113.0%. In this group, all adults in the CU are employed. While 1 Earner, Singles spent $0.44B less, 2+ Earner CUs spent $2.75B more. This produced the increase in share. The drop in performance was due to a 2.45 million increase in CUs (Note: other groups were down -1.98 million CUs) along with a $2.14B spending lift from 1 Earner, 2+ People CUs. Income is the top priority in Pet Products Spending, but how many people work to get it is less important.
  8. Occupation – All Wage & Salary Earners (64.7%) up from 60.7%. Their performance also grew from 102.2% to 107.2%. Mgrs/Professionals had the biggest lift but only Tech/Sls/Cler spent less among the employed. Blue Collar $ were +32.5%. Retirees & A/O,Unemployed spent $2.1B less. Together, this produced the lift in share & performance.
  9. CU Composition – Married Couples (61.1%) down from 63.7%. Their performance fell from 134.4% to 127.8% but they went from 3rd to 2nd in importance. Only Married, Couple Only & CUs with a Child 6>17 spent less, -$4.1B. Single Parents & Unmarried, 2+ Adult CUs were +$2.3B. These were key factors in the drops in share & performance.
  10. Age – 35>64 (61.3%) up from 59.7%. Their performance also grew from 113.9% to 117.7%. Even with a -$1.26B drop by 35>44, their spending grew by +$2.49B. Outside of the group the combined change was -$0.07B. This produced the big gains in share and performance. However, they stayed in 7th place in terms of importance.

The biggest spending groups are the same for Pet Products as for Total Pet, but there are subtle differences in market share and performance. Money matters most but how many earners, their occupation and education matters less. It also appears that Pet Products Spending is becoming more balanced  across almost all demographic categories.

Now, let’s drill deeper and look at 2022’s best and worst performing Products spending segments in each category.

Most of the best and worst performers are the ones that we would expect. However, there are 9 that are different from 2021. That is 2 less than last year but 2 more than Total Pet this year. Changes from 2021 are “boxed”. We should note: Only 2 of the Product winners are different from Total Pet – $150>199K rather than $200K> and 3 People CUs rather than 4 people CUs. These differences are slight, and both reinforce the importance of Income & Family in Pet Spending.

The average performance of the 2022 Product winners was 136.1%, down from 148.6% – 10 were down. The average for the losers was 60.7%, up from 56.3% – 10 were up. The gap between best and worst narrowed from 92.3% to 75.4% indicating that Pet Products spending became more balanced across America in 2022. We should also note:

  • Generation – Gen X continues to hold their spot at the top. However, Gen Z has “awakened” which has pushed the oldest group, those Born <1946 to the bottom.
  • Income, # Earners – The new winners are still at or near the top In CU income. The importance of income is also reinforced by a number of other winners, including Mgrs/Prof., 45>54, Adv. College Degree & Gen X.
  • CU Composition, CU Size – Families and children remain important. Married, w/Children now outperforms Married, Couple Only. All Married CUs perform at 100+% but even Single Parents are up to 97%.
  • Age – The high-income 45>54 group replaced 35>44. After the “youth” spending surge in 2021, especially on Supplies, spending is skewing towards older Gen Xers.
  • Region – The Midwest took the top spot from the West, and they are the only 2 Regions performing at 100+%. However, the “under performers” are from 91>93% so spending is still relatively regionally balanced.

It’s time to “Show you the money”. Here are segments with the biggest $ changes in Pet Products Spending.

In this section we’ll see who drove Pet Products spending up. There are 2 repeats from 2021 and 12 Segments switched positions – from first to last or vice versa. This is slightly less turmoil than 2021 which had only 1 repeat but 16 flips. There is only 1 truly surprising winner, High School Grads or Less. In 2 categories, all spent more. Here are the specifics:

  • Region – Both the 2021 winner and loser flipped in 2022.
    • Winner – Midwest – Products Spending: $14.93B; Up $4.05B (+37.2%)                     2021: West
    • Loser – West – Products Spending: $14.54B; Down $3.83B (-20.9%)                           2021: Midwest
    • Comment – The West had drops in both Food & Supplies. The NE had the only other decrease – in Supplies only.
  • Education – Both winner and loser flipped.
    • Winner – HS Grad or Less – Products Spending: $10.45B; Up $3.37B (+47.5%)                        2021: Adv College Degree
    • Loser – Adv College Degree – Products Spending: $15.87B; Down $3.36B (-17.5%)                2021: Less than HS Grad
    • Comment – There was a clear dividing line in the 2022 Pet Products spending pattern. Those with at least a BA/BS degree spent less. All segments without a college degree spent more.
  • # in CU – Both the winner and loser are new. Only 3 People CUs spent more on both Food & Supplies.
    • Winner – 3 People – Products Spending: $10.88B; Up $2.70B (+33.1%)                      2021: 2 People
    • Loser – 5+ People – Products Spending: $7.14B; Down $0.64B (-8.2%)                       2021: 4 People
    • Comment: All but 3 people CUs spent less on Supplies but only 2 and 5+ CUs spent less on Pet Products.
  • Occupation – Retirees flipped from 1st to last.
    • Winner – Mgrs & Professionals – Products Spending: $21.33B; Up $2.70B (+14.5%)                        2021: Retired
    • Loser – Retired – Products Spending: $10.23B; Down $1.13B (-9.9%)                                                   2021: Self-Employed
    • Comment – All but Retirees, Tech/Sls/Cler and All Other/Unemployed spent more. Retirees $ were down due to a big drop in Food. The other drops came because of a big decrease in Supplies spending.
  • CU Composition – Again, both the winner and loser flipped.
    • Winner – Married, Oldest child 18> – Products: $6.96B; Up $2.63B (+60.8%)                     2021: Married, Oldest Child 6>17
    • Loser – Married, Oldest Child 6>17 – Products: $8.08B; Down $3.40B (-29.6%)                 2021: Married, Oldest Child 18>
    • Comment – Married Couple Only and Married, Oldest Child 6>17 were the only segments to spend less on Pet Products, but their drop was enough to turn Total Married Couples negative. Most segments were up in Food but down in Supplies. Only Oldest Child 18> and Married, plus Adults, but no kids were up in both Food & Supplies $.
  • # Earners – The winner is new but No Earner, 2+ People CUs flipped to the bottom spot.
    • Winner – 1 Earner, 2+ CU – Products Spending: $12.22B; Up $2.14B (+21.2%)                             2021: No Earner, 2+ CU
    • Loser –– No Earner, 2+ CU – Products Spending: $4.47B; Down $2.58B (-36.6%)                          2021: 2 Earners
    • Comment – While income matters most, the # of Earners is still not a major factor in Pet Products spending as 1 Earner, 2+ CUs won. Only 1 Earner, Singles and No, Earner, 2+ People CUs spent less.
  • Age – The 55>64 yr-olds flipped from last to first and 75> moved to the bottom due to a big drop in Food $
    • Winner – 55>64 yrs – Products Spending: $13.25B; Up $2.04B (+18.2%)                                   2021: 35>44 yrs
    • Loser – 75> yrs – Products Spending: $3.41B; Down $1.32B (-27.9%)                                         2021: 55>64 yrs
    • Comment: The only spending drops came from 25>44 and over 75. The 45>74 yr-olds spent more in both Food & Supplies. Only 25>34 yr-olds spent less on both – minor decreases. Supplies $ drove the 35>44 group down.
  • Income – Both winner and loser flipped.
    • Winner – $100 to $149K – Products Spending: $11.67B; Up $1.86B (+19.0%)                          2021: $200K>
    • Loser – $200K> – Products Spending: $9.77B; Down $1.88B (-16.1%)                                        2021: $100>149K
    • Comment – A spending rollercoaster: <$40K = -$0.63B; $40>69K = +$2.07B; $70>99K = -$0.32B; $100>199K = +$3.19B; $200K> = -$1.88B. Most Impressive: $40>49K was +34.6% and spent more on both Food & Supplies.
  • Housing – Homeowners w/o Mtge flipped from last to 1st but all segments spent more on Pet Products.
    • Winner – Homeowner w/o Mtge – Products: $15.93B; Up $1.84B (+13.1%)                           2021: Homeowner w/Mtge
    • Loser –– Renter – Products Spending: $12.10B; Up $0.07B (+0.6%)                                          2021: Homeowner w/o Mtge
    • Comment– Wealthier Homeowners who have paid off their homes, but are not retired, were the big drivers.
  • Generation – Both the winner and loser are new.
    • Winner – Millennials – Products Spending: $15.14B; Up $1.59B (+11.8%)                              2021: Gen X
    • Loser – Born <1946 – Products Spending: $2.77B; Down $1.71B (-38.2%)                              2021: Baby Boomers
    • Comment – There were only 2 Pet Products negatives – Gen X had a strong lift in Food, but it was overcome by a huge drop in Supplies $ and Born <1946, who were up slightly in Supplies but had a big drop in Food $.
  • Area Type – The larger Suburbs held their spot on top. Center City is a new loser, but all Area Types spent more.
    • Winner – Suburbs 2500> – Products Spending: $26.70B; Up $1.44B (+5.7%)                         2021: Suburbs 2500>
    • Loser – Center City – Products Spending: $16.56B; Up $0.31B (+1.9%)                                    2021: Population <2500
    • Comment – <2500 was the only area to spend more on Supplies & Food. Center City had the only drop in Food $.
  • Race/Ethnic – White, Non-Hispanic held their spot on top while Asians replaced African Americans at the bottom.
    • Winner – White, Not Hispanic – Products Spending: $50.14B; Up $1.34B (+2.7%)                       2021: White, Not Hispanic
    • Loser – Asian – Products Spending: $1.50B; Down $0.29B (-16.4%)                                                 2021: African American 
    • Comment – African Americans didn’t win but they spent 59.7% more overall and were the only group to spend more on Supplies – and on both Food & Supplies. On the flip side, Asians were the only group to spend less on both Food & Supplies. White, Not Hispanic “won” because a $3.28B Food lift overcame a $1.94B drop in Supplies.

We’ve now seen the winners and losers in terms of increase/decrease in Pet Products $ for 12 Demographic Categories. 2022 was a positive, but mixed year for Pet Products Spending. Food rebounded after the big 2021 drop from the binge buy in 2020. The lift was enough to overcome the drop in Supplies $ after the record post pandemic spending surge in 2021. In 2022, 52% of segments still spent more on Supplies, but 82% spent more on Food so that 70% spent more on Pet Products. Of course, not every good performer can be a winner but some of these “hidden” segments should be recognized for their outstanding effort. I’ve narrowed the group down to 6. They don’t win an award, but they deserve…

Honorable Mention

Pet Products spending was up $2.42B in 2022. A rebound in Food exceeded the big drop in Supplies. The lift in Pet Products spending was widespread as 70% of 96 demographic segments spent more. Income was still the most important factor, but spending became a little more balanced. In our honorable mention group, you see that Gen Z truly got into the game by more than doubling their Pet Products spending. Although 2022 spending skewed towards the older Gen X group, 70% lifts by the <25 group and CUs with an oldest child <6 showed that the younger groups were still “strong” pet parents. Some other low-income segments that often finish on the bottom in spending also had a good year. Single Parents and African Americans both increased their Pet Products spending by 58+%. Finally, Higher Education became a little less important. College Grads spent less on Pet Products while all demographic segments w/o a college degree spent more. Those with an Associate’s degree were a big contributor with a 46% increase. The lift in Pet Products spending was widespread and more balanced so there were many “heroes”.

Summary

Pet Products spending has seen a lot of turmoil since 2015. Many consumers upgraded to Super Premium Food and cut back on Supplies in 2015. In 2016 they value shopped for Food and Spent some of the saved money on Supplies. In 2017 there was increased availability and value in both segments. More Consumers recognized the opportunity and spent $7B more. 2018 was calm, until the second half when the FDA warning on grain free dog food caused many consumers to downgrade their food and new tariffs on Supplies flattened spending growth. The result was -$1B drop in Products $.

In 2019 Pet Food spending rebounded to a new record level but the full impact of higher prices in the Supplies segment really hit home, with a record $2.98 decrease in spending. The drop was almost universal as 93 of 96 demographic segments spent less. The result was a -$0.64B drop in Pet Products $, the second consecutive decrease.

2020 brought the COVID pandemic. Out of fear of reduced availability, Pet Parents binge bought Pet Food in the 1st half of the year. As Pet Parents focused on “needs”, discretionary Supplies dropped significantly in importance and $. However, Pet Products spending still grew by $3.99B and exceeded $50B for the 1st time at $52.0B.

In 2021, the Food binge was not repeated and pets “ate down” the overstock so Pet Food spending fell. However, Pet Parents caught up on purchasing all the Supplies that they had postponed buying due to the pandemic. The result was a record increase in Supplies and a $6.21B increase in Pet Products $.

2022 brought a return to more normal spending behavior. Pet Food spending increased $4.29B, +12.5%. Obviously, the binge was not repeated but Supplies spending only fell -7.8% and 52% of demographic segments still spent more. The net was a $2.42B, +4.2% increase which pushed Pet Products $ up to $60.63B. Overall, the lift was widespread as 70% of 96 demographic segments spent more. While the Spending leader remained Gen X, the $ moved towards their older members in the 45>54 yr-old age group. However, the youngsters also made their presence felt as Gen Z more than doubled their Pet Products spending. Spending also became more demographically balanced. The most visible feature of this change was in the big groups doing at least 60% of the dollars. In order to reach the 60% minimum, the Education group was downgraded from College Grads to those with an Associate’s Degree or more. However, the balancing act was not limited to Education. 10 of 12 categories narrowed the gap between their best and worst performing segments. Overall, the average gap narrowed from 92.3% in 2021 to 75.4% in 2022. It’s still big but definitely improving.

Finally,… The “Ultimate” 2022 Pet Products Spending CU is 3 people, a married couple with a child over 18. They are in the 45>54 age range and are White, but not Hispanic. At least one has an Advanced College Degree and is a Mgr/Professional. Everyone works, including their child, producing a CU income of $150>199K.They still have a mortgage on their house located in a small suburb  in the Midwest.