Petflation 2024 – December Update: Drops to +2.0% vs 2023

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The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until it turned up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. Prices fell -0.1% in November but rose 0.04% in December. The CPI rose to +2.9% from +2.7% in November. Grocery prices rose 0.1% from November and inflation grew from 1.6% to 1.8%. However, after 12 months of 10+% YOY monthly increases, grocery inflation has now been below 10% for 22 months. 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 Dec 21 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 22. National inflation has slowed considerably since then, but Petflation generally increased until June 23. It passed the CPI in July 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, fell below in Sep>Oct, rose above in Nov, then fell below in Dec. As we drill into the data, all 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 24 vs 23 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month.
    2. Inflation changes for recent years (22>23, 21>22, 20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2024 vs 2019 and vs 2021 to see the full inflation surge.
    4. Average annual Year Over Year inflation rate from 2019 to 2024
  • YTD comparisons (Note: December YTD = Annual)
    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 Dec 22 to Dec 24. 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 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 down -0.2% from November. The drop came from a mixture of patterns. Food (-0.6%) & Services (-0.5%) were down while Vet (+0.4%) & Supplies (0.1%) were up.

In Dec 22, the CPI was +15.5% and Pet was +16.0%. The Services segments generally inflated after mid-20, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices generally increased but the others had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices grew while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month for all segments except for 1 Supplies dip. In May Products prices grew while Services slowed. In Jun/Jul this reversed. In Aug all but Services fell. In Sep/Oct this flipped. In Nov, all but Food & Vet fell. In Dec, Supp. & Vet  drove prices up. In Jan>Mar 24 Pet prices grew desspite a few dips by individual segments. In April, prices in all but Vet fell. In May, all but Food grew. In June, Products drove a lift. In July, all but Services fell. In Aug, Food drove a drop. In Sep, Products fueled a drop. In Oct, Services drove a lift. In Nov, all were up. In Dec, the segments were split but Total Pet fell.

  • 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 rose Jan>Sep 23, dipped Oct>Dec, rose Jan>Oct 24, fell in Nov, then rose in Dec but 29.9% of the 22.8% increase in the 60 months since Dec 19 happened from Jan>Jun 22 – 10% of the time.
  • Pet Food – Prices were at the Dec 19 level from Apr 20>Sep 21. They grew & peaked May 23. Jun>Aug ↓, Sep>Nov ↑ Dec>Feb ↓, Mar ↑, Apr>May ↓, June ↑, Jul>Oct ↓, Nov ↑, Dec ↓. 91% of the lift was in 22/23.
  • Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices & essentially stayed there until 22. They turned up in Jan and hit a record high, beating 2009. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct to a new record. Prices stabilized in Nov>Dec but grew in Jan>Feb 23. They fell in Mar, but set a new record in May. The rollercoaster continued with Dec>Feb ↑, Mar/Apr ↓, May/Jun ↑, July ↓, Aug ↑, Sep/Oct ↓ & Nov/Dec ↑.
  • Pet Services– Inflation is usually 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but with fewer outlets. Inflation grew in 21 with the biggest lift in Jan>Apr. Inflation was strong in 22 but prices got on a rollercoaster in Mar>Jun. They turned up Jul>Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug ↑, Sep>Dec ↓, Jan>Mar 24 ↑, Apr ↓, May ↑, June ↓, Jul>Nov ↑, Dec ↓.
  • Veterinary – Inflation has been consistent. Prices turned up in Mar 20 and grew through 21. A surge began in Dec 21 which put them above the overall CPI. In May 22 prices fell and stabilized in June causing them to fall below the CPI. However, prices rose again and despite some dips they have stayed above the CPI since July 22. In 23>24 prices grew Jan>May, leveled Jun/Jul, fell Aug, grew Sep>Dec, fell Jan, grew Feb>May, fell Jun>Jul, grew Aug>Dec.
  • 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 Sep/Oct, then fell in Nov. In December prices turned up and grew through March 24 to a record high. Prices fell in April, rose May>June (record), fell Jul>Sep, rose Oct>Nov (record), then fell in Dec. Petflation is again below the National CPI.

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>24 & 19>24. Petflation fell to 2.0%, from 2.9% in November, and it is again below the National inflation rate (by -31.0%). The chart will allow you to compare the inflation rates of 23>24 to 22>23 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. We’ve included some human categories to put the pet numbers into perspective.

Overall, prices were up 0.04% from November and were +2.9% vs Dec 23, up from +2.7% last month. Grocery inflation rose to +1.8% from 1.6%. Only 3 had price decreases from last month – all Pet: Food, Services & Total. There were 2 drops in Oct & Nov but 3 in Aug & Sep and 5 in July. The national YOY monthly CPI rate of 2.9% is up from 2.7%, but it is 15% below the 22>23 rate and 55% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services, Pet Services & Haircuts. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 has only occurred in Total Pet and all Pet segments. Except for Pet Services, where prices have skyrocketed, Service Segments have in the past generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 93% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were still recovering from a deflationary period. Services expenditures now account for 64.6% of the National CPI so they are very influential. Their current CPI is +4.4% while the CPI for Commodities is 0.3%. This clearly shows that Services are driving virtually all of the current 2.9% inflation. The situation in Pet is even more pronounced. Petflation: 2.0%. The combined CPI for the 2 Service Segments is 6.2%. The Pet Products CPI is -0.9%.

  • U.S. CPI– Prices are +0.04% from Nov. The YOY increase is 2.9%, up from 2.7%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 45+% higher than the target. The December increase was the 3rd straight lift after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +13.2%, 57.9% of the total inflation since 2019. Inflation was growing in December 2021, +7.0%
  • Pet Food– Prices are -0.6% vs Nov. but -1.7% vs Dec. 23, down from -1.2%. They are still far below the Food at Home inflation rate of +1.8%. The YOY drop of -1.7% is being measured against a time when prices were 23.0% above the 2019 level but the current decrease is still more than double the -0.75% drop from 2019 to 2020. The 2021>2024 inflation surge generated 91% of the 20.9% inflation since 2019. Inflation began in June 2021.
  • Food at Home – Prices are up +0.1% from November and the monthly YOY increase grew from 1.6% to 1.8%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.6% Inflation for this category since 2019 is 21.1% more than the national CPI but only in 3rd place behind 2 Pet Services expenditures. 55.4% of the inflation since 2019 occurred from 2021>24. This is lower than the CPI, but we should note that Grocery prices began inflating in 2020>21 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 +0.1% from November and inflation fell to +1.5% vs Dec 23 from 2.8%. They still have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 99% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a record high in Feb 23. Prices fell in March, rose Apr/May (record), fell Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell Sep>Oct, then rose Nov>Dec.
  • Veterinary Services– Prices are +0.4% from Nov and +6.2% from 2023, down from 7.0%. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +38.9% and since 2021, +28.0%. For Veterinary, relatively high annual inflation is the norm. However, the rate has increased during the current surge, especially in 22 & 23. It is still high in 24, so 72.0% of the cumulative inflation since 2019 occurred from 2021>24.
  • 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 rose +0.1% from Nov, but inflation vs last year slowed to +3.4% from +3.7%. Medical Services are not a big part of the current surge as only 55.0% of the 12.9%, 2019>24 increase happened from 21>24.
  • Pet Services – Inflation slowed in 2020 but began to grow in 21. In 24 prices surged Jan>Mar, fell in April, rose in May, fell in June, rose Jul>Nov, then fell in Dec. Their 11.5% rate is almost double the 6.3% rate in Aug. 68.2% of their total 19>24 inflation has occurred since 21. In Dec 23, it was 49%. Plus, they again have the highest 23>24 rate.
  • Haircuts/Other Personal Services – Prices are +0.03% from Nov and +4.8% from Dec 23. 10 of the last 12 months have been 4.0+%. Inflation has been pretty consistent. 57.2% of the 19>24 inflation happened 21>24.
  • Total Pet– Petflation fell to 2.0% from 2.9% due to a lower rate in all segments. It is 61% less than the 22>23 rate and now 31% below the U.S. CPI. Plus, 2.0% is 31% below the 3.1% average December rate since 1997. Vs Nov, prices fell -0.2%, primarily driven by Food. The Nov>Dec decrease was far below the +0.2% average change and a bit unexpected. A drop has only occurred in 8 of the last 25 years. Another factor in the big CPI drop was that prices rose 0.2% in Nov>Dec 23. In December, the recovery strongly restarted, and we are getting closer to a full recovery.

Now, let’s look at the YTD numbers. (Note: December YTD = Annual)

The 23>24 rate is lower than 22>23 for all but Medical Services & Pet Services (their highest rate). The 22>23 inflation rate was the highest for only 2 of 9 categories – Both Pet – Pet Food & Veterinary. 21>22 has the highest rate for the CPI, Food at Home, Haircuts, Pet Supplies & Total Pet. The average national inflation in the 5 years since 2019 is 4.2%. Only 2 of the categories are below that rate – Medical Services (2.7%) and Pet Supplies (2.1%). It is no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.2% or higher.

  • U.S. CPI – The 23>24 rate is 2.9%, slightly below 3.0% in November, but it is down 29% from 22>23, 64% less than 21>22 and 31% below the average annual increase from 2019>2024. However, it’s still 93% more than the average annual increase from 2018>2020. 70% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
  • Pet Food – Ytd inflation is 0.2%, down from 0.3% in Nov. and 98.1% less than the 22>23 rate. Now, it is also 98.0% lower than 21>22 and 87% below the average rate from 2018>2021. Pet Food has the highest 22>23 rate on the chart and remains in 2nd place in the 21>24 rates. Deflation in the 1st half of 2021 kept YTD prices low then they surged in 2022 and especially in 2023. 96% of the inflation since 2019 occurred from 2021>24.
  • Food at Home – The inflation rate has slowed remarkably. At 1.2%, it is down 76% from 22>23, 89% from 21>22 and 66% from 20>21. Also, it is even 45% lower than the average rate from 2018>20. It is only in 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 18%. You can see the impact of supply chain issues on the Grocery category as 69% of the inflation since 2019 occurred from 2021>24.
  • Pets & Pet Supplies – In 24, prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, rose in Aug, fell Sep>Oct, then rose Nov>Dec. Inflation in 24 is 0.9% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The most significant lift since 2019 was 7.7% in 2022. The 2021 deflation created a unusual situation. Prices are up 11.1% from 2019 but 105% of this lift happened from 21>24. Prices are up 11.6% from their 2021 “bottom”.
  • Veterinary Services – Inflation was high in 2019 and steadily grew until it took off in late 2022. The rate may have peaked in 2023, but it is still going strong in 2024, +7.4%, the highest on the chart. They are also #1 in inflation since 2019 and since 2021. At +6.7%, they have the highest average annual inflation rate since 2019. It is 1.6 times higher than the National Average but 2.5 times higher than the Inflation average for Medical Services. 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 24 it was 2.8%, just slightly above the 2.7% 2019>24 average rate. However, it is being measured against 2023 when prices actually deflated (-0.3%). This was the only deflationary year since the US BLS began tracking this category in 1935.
  • Pet Services – After falling in late 2023, prices surged in 2024, except for drops in Apr, Jun & Dec. The 23>24 inflation rate of 7.0% is 2nd to Veterinary on the chart. It is their highest annual rate and is 2.1 times higher than their 2018>21 average rate. Pet Services is 2nd in 19>24 inflation but only 4th in inflation since 21.
  • Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. 2024 inflation was 4.5%, 17% below its 22 peak, but 27% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the purchase frequency.
  • Total Pet – 2024 Petflation is 2.6%, the same as November. It is 68% less than 22>23 but 8% higher than the 2018>21 average rate. Plus, it is 10.3% below the CPI. Despite the YOY lifts in Aug & Nov, Petflation has slowed in 24. This was primarily driven by lower inflation in Pet Food & Supplies, while prices in Services (Nov) & Vet (Dec) reached new record highs. The patterns were mixed but Products dominate the Pet Industry, so Petflation slowed.

The Petflation recovery paused in Aug, came back Sep>Oct, paused in Nov, then resumed in Dec. At 2.0%, Dec was 37% below the 25 yr monthly average and the 2.6% rate for 2024 was 17% below the annual average. We tend to focus on monthly/annual inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 18.8% above 2021 and 24.2% higher than 2019. Those are big lifts. In fact, current prices for all segments are within 2% of the highest in history. Only Supplies prices (+10.6%) are less than 20.9% higher than 2019. Since price/value is the biggest driver in consumer spending, inflation will affect the Pet Industry. Services will be the least impacted as it is driven by high income CUs. Veterinary will see a reduction in visit frequency. The product segments will see a more complex reaction. Supplies will likely see a reduction in purchase frequency and some Pet Parents may even downgrade their Pet Food. Products will see a strong movement to online purchasing and private label. We saw proof of this at both GPE & SZ as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

2023 Pet Food Spending was $45.50B – 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 noted the trendy nature of Pet Food Spending. In 2018 we broke a 20 year pattern – 2 years up then spending goes flat or turns down. We expected a small increase in 2018 but we got a $2.27B decrease. This was due to the reaction to the FDA warning on grain free dog food. The warning lost credibility and spending rebounded in 2019, +$2.35B. In 2020 the market was hit by a bigger outside influence – the pandemic. In Pet Food, it created a wave of panic buying, resulting in a $5.65B lift. The panic buying was over so spending fell -$2.44B in 2021. In 2022 spending returned to more “normal” behavior with a strong $4.29B, +12.5% increase to $38.69B. In 2023, spending skyrocketed with a record $6.81B (+17.6%) lift and reached $45.5B. Note: With 10.6% inflation, the lift was really only 6.3%.  Let’s take a closer look.

First, we’ll see which groups were most responsible for the bulk of Pet Food spending and the $6.81B 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 but Education are the same as Total Pet. It was expanded to reach the 60% goal, which was unreachable for Food in 3 categories. 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 more balanced than Total Pet Spending. This is evident by the fact that the Performance of only 3 groups exceeds 120%. In Total Pet there were 5 and Pet Products had 4. In 2023, Pet Food accounted for 66.4% of Pet Products $ and 38.7% of Total Pet, up from 63.8% and 37.7% in 2022. Pet Food is the largest segment but its importance to the Pet Industry is still growing.

  1. Race/Ethnic – White, not Hispanic (79.9%) – down from 83.4%. This large group accounts for the vast majority of spending in every segment. They lost share and their performance decreased to 120.4% from 124.1%, but this category stayed #3 in terms of importance in Pet Food Spending demographic characteristics. Hispanics, African Americans and Asians account for 33.7% of U.S. CU’s and they now spend 20.1% of Pet Food $, up from 16.6% in 2022. All groups had double digit % increases. Hispanics and African Americans both spent over $1.2B more.
  2. # in CU – 2+ people (76.7%) – down from 80.2%. The share of market fell for 2+ CUs and is again well below 80% for Pet Food. Their performance also dropped from 116.3% to 109.9% and their rank fell from #6 to #7. All CUs spent more. In the 2+ group, 2 & 3 People CUs spent $3.5B more while the combined lift for 4 & 5+ CUs was only $0.36B. Singles led the way with a $2.96B, +38.8% increase in Food spending. This caused the drops in share & performance.
  3. Housing – Homeowners (77.6%) – down from 80.8%. Homeownership is a huge factor in pet ownership and pet spending. In 2023, homeowners lost share and their performance fell from 124.1% to 119.2%. They dropped out of the 120% club and fell from 3rd to 4th in importance. All segments had double digit % lifts. However, Renters were up +36.9%. Homeowners were only +13.0%. The $2.74B lift by Renters caused the drops for Homeowners.
  4. Age – 35>74 (73.3%) – down from 78.3%. This expanded group is another indicator of increasing balance. Their performance fell from 114.5% to 107.4% and age dropped from #5 to #8 in importance. All but 45>64 spent more. Pet Food Share by Age: 25>34: 15.0%; 35>44: 18.5%; 45>54: 16.4%; 55>64: 18.6%; 65>74: 19.8%. Very Balanced!
  5. Area – Suburban + Rural (73.8%) down from 74.1%. Their performance fell from 113.1% to 112.7%. but their importance grew to #5, from #8. All segments spent at least $1.86B more. The Suburbs had the biggest $ lift, +$3.09B but Center City had the highest percentage, +18.5%. Overall, the lift was very balanced.
  6. Income – Over $70K (61.0%) – up from 60.5%. Their performance dropped from 127.9% to 120.9% but they stayed 2nd in importance. High income is still very important in Pet Food Spending but is not at the top of the list. The 50/50 $ divide rose slightly from $91K in 2022 to $93K in 2023 but it is still 9% below the average CU income. Only $40>49K & $50>69K spent less (Total: -$1.22B) but the 2 biggest lifts came from the 2 lowest income groups. <$30K led the category with a $1.89B lift but $30>39K was a close second, +$1.74B. All groups with an income over $70K and now $30>39K perform at 100+%. Prices are high but Food is so important that many low income CUs find the $.
  7. # Earners – “Everyone Works” (59.3%) – down from 62.9% and their performance also decreased from 107.8% to 101.1% but they stayed 9th in importance. No Earner CUs were up over 36%. 3 Earner CUs spent less and 2 Earner CUs were only +9.5% (less than inflation). Together, these factors drove the drop in share & performance.
  8. Occupation – All Wage & Salaried Workers (58.8%) – down from 62.4% – The group’s performance fell below 100% from 103.4% to 97.6%. Occupation is again last in importance. Mgrs/Prof and A/O, Unemployed spent less. Retirees were +48.6%. Self-Employeed: +32.4%. This combination caused the group’s drops in share & performance.
  9. CU Composition – Married Couples (59.4%) – down from 61.3%. They lost share and their performance fell from 128.3% to 123.3%, but they stayed #1 in importance. All Married CUs spent more but their lift was only 14.0%. Singles and Unmarried, All Adult CUs spent $4.22B, +32.6% more. This caused the Married Group’s drops.
  10. Education – Assoc. Degree> (64.7%) – down from 66.6%. Performance fell from 115.4% to 110.9% but higher education moved up from 7th to 6th in importance. Associates spent less and Adv Degrees were only +9.6% (less than inflation). Other HS Grads had a great year, +$3.38B, +20.5%. This caused the drops in share and performance.

All of the big spenders for Pet Food but Education  are the same as Total Pet. 2022 brought a return to a more normal spending pattern. In 2023 we had a record lift that was widespread and more balanced. This is best illustrated by the fact that in 2023 the performance for only 3 groups exceeds 120% with the highest at 123.3%. In 2022 there were 4, with the highest at 128.3%. To put the balance into better perspective, in 2020 there were 8 at 120+%, 5 over 130%.

Now, we’ll look at 2023’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. 2023 produced just 2 surprise winners – Married, + Adults and 65>74 yrs old. There are 6 different winners from 2022 and 5 different losers. This is the same total as 2022, but it had 4 new winners and 7 new losers. More new winners reflects the widespread nature of 2023’s record increase in Pet Food spending. Changes from 2022 are “boxed”. We should also note the performance gap between winner and loser narrowed in 11 of 12 categories. Overall, the average gap fell from 73.5% in 2022 to 59.1% in 2023. This is strong evidence of increased spending balance. Here are some more performance specifics:

  • Income – $40>49K replaced <$30K on the bottom. The gap narrowed from 112% to 86%, and is now below 100%.
  • # Earners – Winner & loser are new. The Winner has only an average income. The gap narrowed from 71% to 39%.
  • Occupation – Self Employed replaced Mgrs/Prof. on top. The gap narrowed from 54% to 38%.
  • Age, Generation- Boomers moved to the top in both and the oldest stayed on the bottom. Both gaps fell -16+%.
  • Race – The usual winner. Asians replaced African Americans on the bottom. The gap narrowed from 94% to 83%.
  • Education – Both are new but a college degree still mattered in Pet Food spending. The gap fell from 54%.to 35%.
  • Housing – Owning a home is always important. The usual winner & loser returned. The gap narrowed – 97% to 74%.
  • Area – The usual winner/loser – Rural on top & Center City on the bottom. The gap narrowed a little 85% to 82%.
  • Region – Both kept their spots but this category had the only increase in the performance gap – 24.5% to 30%.
  • CU Comp, CU Size– Size: No change. Married, +Adults was a surprise. Both gaps narrowed. Comp: -11%; Size: -6%

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

There are 4 repeats from 2022 and 4 flipped from 1st to last or vice versa. Last year there were 2 repeats and 13 flips -much more turmoil. The Surprise winners were Retired, 65>74, <$30K and 3 different singles. The surprising losers were Gen X, Mgrs, 45>54 and 3+ Earners. Spending grew 17.6% as 87.5% of demographic segments spent more. (With inflation, it was 80%) Plus, all segments in 5 categories had increases. In 2022 there was 1. Here are the specifics:

  • Race/Ethnic – Both White, Not Hispanics and Asians held their positions.
    • Winner – White, Not Hispanic – Pet Food Spending: $36.33B; Up $4.07B (+12.6%)                              2022: White, Not Hispanic
    • Loser – Asian – Pet Food Spending: $0.94B; Up $0.11B (+12.6%)                                                               2022: Asian
    • Comment – The U.S. is becoming more racially/ethnically diverse but White, Not Hispanics are by far the biggest spender in every Pet Segment. All segments spent more. Asian Americans had the smallest lift. African Americans & Hispanics had $1B increases. African Americans almost doubled their spending, +95.5%.
  • Generation – Millennials are a new winner. Gen X flipped to the bottom
    • Winner – Millennials – Pet Food Spending: $12.67B; Up $3.87B (+44.1%)                                                      2022: Gen X
    • Loser – Gen X – Pet Food Spending: $11.43B; Down $1.65B (-12.6%)                                                               2022: Born <1946
    • Comment – Much of the 2020>21 Pet Food spending boom and bust was due to the Boomers. Gen X took over the top spot in 21 & 22. In 2023, they had the only spending decrease. Millennials edged out Boomers, +$3.87B to $3.23B for the win. We should note that Millennials increased their Pet Food spending $5.43B 2021>2023.
  • Occupation – The 2022 winner & loser flipped in 2023. This was the only dual flip in 2023 Pet Food.
    • Winner – Retired – Pet Food Spending: $10.60B; Up $3.47B (+48.6%)                                                   2022: Mgrs & Professionals
    • Loser – Mgrs & Professionals – Pet Food Spending: $12.43B; Down $0.53B (-4.1%)                          2022: Retired
    • Comment – Only Mgrs/Professionals and A/O, Unemployed spent less. Retirees had the biggest lift in both $ & %. In fact, their increase was double the size of 2nd place – +$1.73B by Tech/Sls/Cler.
  • Area Type – The Suburbs won again and Center City stayed on the bottom, even though they tied for the loss.
    • Winner – Suburbs 2500> – Pet Food Spending: $19.95B; Up $3.09B (+18.3%)                                                           2022: Suburbs
    • Loser – Center City/Rural – Ctr City: $11.91B; Up $1.86B (+18.5%); Rural: $13.64B; Up $1.86B (+15.8%)            2022: Ctr City
    • Comment – All segments spent more. The Suburbs won with a $3B lift and Center City tied for the bottom spot despite having a lift of $1.86B.
  • Education – Both winner and loser are new. A college degree is still important..
    • Winner – BA/BS Degree – Food Spending: $14.44B; Up $2.98B (+26.0%)                                                   2022: HS Grads or less
    • Loser – Asssociate’s Degree – Food Spending: $4.01B; Down $0.27B (-6.2%)                                            2022: Adv College Degree
    • Comment – Only Associates Degrees and those without a HS diploma spent less. This was not surprising because in 2022 they both had $1+B lifts. In 2023, HS grads with no additional degree spent $3.4B more. BA/BS had a strong year but Adv. Degrees were only up 9% after a drop in 2022.
  • CU Composition – The winner & loser are both new
    • Winner – Singles – Food: $10.60B; Up $2.96B (+38.8%)                                                                      2022: Married, Oldest Child 18>
    • Loser– Single Parents – Food: $1.33B; Down $0.74B (-35.7%)                                                           2022: Married, Couple Only
    • Comment – Only Single Parents spent less. There were strong increases in unexpected segments. Singles account for 30.2% of CUs. Their spending performance is still low, but they had a $2.96B, 38.8% lift. Unmarried, 2+ All Adult CUs. (16.5% of CUs) spent $1.25B, 23.8% more. Spending became more balanced in this category.
  • # in CU – Again, the winner and loser are new.
    • Winner – 1 Person – Pet Food Spending: $10.60B; Up $2.96B (+38.8%)                                        2022: 3 People
    • Loser – 4 People – Pet Food Spending: $5.63B; Up $0.17B (+3.1%)                                                 2022: 2 People
    • Comment: All segments spent more but the larger CUs, 4 & 5 people had lifts <4.5%. 1 person led the way and 3 People was a little above average at +17.7%. Only 2>4 People CUs perform above 100%.
  • Region – The West flipped from last to 1st.
    • Winner – West – Pet Food Spending: $11.35B; Up $2.79B (+32.6%)                                                      2022: Midwest
    • Loser – South – Pet Food Spending: $14.81B; Up $0.97B (+7.0%)                                                           2022: West
    • Comment – All Regions spent more and all but the South had double digit percentage lifts.
  • Housing – Homeowners w/Mtges held onto their position on top. w/o Mtge replaced Renters at the bottom.
    • Winner – Homeowners w/Mtge – Food: $23.66B; Up $2.76B (+13.2%)                                            2022: Homeowners w/Mtge
    • Loser – Homeowners w/o Mtge – Food: $11.66B; Up $1.30B (+12.6%)                                              2022: Renters
    • Comment – All segments spent more with double digit % lifts. Arguably, Renters had the best year. Their $2.74B lift was only $0.02B behind the winner and their +36.9% increase was far better than all Homeowners.
  • Age – The Winner and loser are both new and surprising.
    • Winner – 65>74 yrs – Pet Food Spending: $9.00B; Up $2.35B (+35.4%)                                             2022: 55>64 yrs
    • Loser – 45>54 yrs – Pet Food Spending: $7.45B; Down $0.42B (-5.3%)                                                 2022: 75+ yrs
    • Comment: 45>64 spent less while <45 and 65> spent more. The drop was driven by Gen Xers while Millennials & Boomers drove the lift. The biggest % increase came from 75> group. They spent $1.35B, 60.5% more.
  • Income – Both the winner & loser are new and the winner is a big surprise.
    • Winner – <$30K – Pet Food Spending: $6.63B; Up $1.89B (+39.7%)                                                    2022: $100 to $149K
    • Loser – $40 to $49K – Pet Food Spending: $2.11B; Down $0.82B (-28.0%)                                          2022: $70 to $99K
    • Comment – Only the $40>69K groups spent less. Under $40K spent $3.63B more, which was only slightly less than the $3.74B increase by $100K>. The $30>39K group joined the groups over $70K with 100+% performance.
  • # Earners – The winner and loser are both new
    • Winner –– No Earner, Single – Pet Food Spending: $4.67B; Up $1.63B (+53.9%)                             2022: 2 Earners
    • Loser – 3+ Earners – Pet Food Spending: $4.53B; Down $0.11B (-2.3%)                                              2022: No Earner, 2+ CU
    • Comment – 3+Earners had the only spending decrease, and it was only -2.3%. All other segments had increases over $1B. No Earner CUs were up $3B, +49%.

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>23 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 2023 result was 87.5% of all demographic segments spent more which drove a record lift of $6.81B, +17.6% to $45.5B. Even considering inflation, 80% spent more on Pet Food. 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 widespread. The first thing that you notice is that while food prices are high, lower income groups like African Americans and $30>39K still “found a way” and increased their spending… over 70%. Gen Z continues to reinforce their commitment to Pet Parenting and in 2023 the oldest American joined the movement. Both spent over 50% more. Also, many groups that usually finish at or the bottom in spending comparisons stepped up in 2023. Renters and Center City are still the worst performers in their category but in 2023 they both increased their Pet Food spending over $1.8B. Income is important in Pet Food spending but family commitment is still #1. The strong performance of these segments demonstrates just how widespread the commitment to our Pet “Children” has become.

Summary

Pet Food has been ruled by trends over the years. The drop in 2018 due to the FDA grain free warning broke a 20 year pattern of 2 years up followed by 1 year of flat or declining sales. This trendy nature increased with the move to premium foods in 2004. The 2007 Melamine crisis 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 lift. These consumers were generally more educated with higher incomes. Unfortunately, they often paid for the upgrade by spending less in other segments. In 2016, spending dropped as many value shopped, especially online. They spent some of the $3B “saved” Food $ in other segments but not enough so Total Pet Spending was down $0.46B. In 2017, due to a price competitive market, we got 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, but spending fell $2.26B in reaction to the FDA warning on grain free dog food. The big decrease 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 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.

In 2023 inflation got even stronger, +10.6%, but so did Pet Parents’ commitment to their Pet Children. Most prioritized their spending which put Pet Food high on their shopping list. The 22>23 lift of $6.81B set a new record and was widespread. In 5 categories, all spent more and overall,  87.5% of demographics increased spending. Even considering inflation, 80% spent more. 2023 was also more balanced as only 3 big groups performed over 120% and the average discrepancy between the best and worst performers dropped from 73.5% to 59.1%. 2023 was a great year for Pet Food.

Finally – The Ultimate Pet Food Spending CU is 3 people – a married couple and 1 other adult. They are 65>74 years old and White, but not Hispanic. At least one has an Advanced College Degree and 2 of them work in their own business. This generates an income of $200K>. They are still paying the mortgage on their house in a small Midwestern suburb.

2023 Pet Products Spending was $68.52B – Where did it come from…?

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We looked at the Total Pet Spending for 2023 and its key demographic sources. Now we’ll start drilling down into the data. The first stop in our journey of discovery will be Pet Products – Pet Food and Supplies. These are the industry segments that are most familiar to consumers. They are stocked in over 200,000 outlets, plus the internet. Every week over 21,700,000 households buy food and/or treats for their pet children. Pet Products accounted for $68.52B (58.3%) of the $117.60B in Total Pet $ in 2023. This was up $7.89B (+13.0%) from the $60.63B that was spent in 2022. However, inflation in 2023 was 7.4% so the “real” lift was 5.2%. Pet Food had a record lift after the small increase in 2022 that followed the binge/bust in 20/21. Supplies also was on a spending rollercoaster. After falling in 2020, there was a record surge in 2021. As expected, spending fell in 2022, but there was a small lift in 2023.

Overall, in 2023 Pet Food spending rose +$6.81B and Supplies spending increased $1.08B. 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 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 2023.

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). All but 1 of the biggest spending groups are the same as Total Pet. To reach 60%, Education added Associates. The categories are shown in the order that reflects their share of Total Pet Spending. This highlights any differences. There is only 1. The bigger education group obviously has a bigger share of spending than College grads only. 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+%, the same as last year and 1 less than Total Pet in 2023. 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 (81.1%) down from 82.7%. They are the 3rd largest group but still account for the vast majority of spending in every segment. Their performance fell from 123.1% to 122.2% but they stayed 3rd in terms of importance in Pet Products Spending demographic characteristics. All groups spent more but while Hispanics, African Americans and Asian American account for 33.7% of U.S. CU’s, they only spend 18.9% of Pet Products $. Although the minority share of Pet Poducts $ is still low, it is up 47.7% from 12.8% in 2020. Pet ownership is relatively high in Hispanic households, but it is significantly lower for African Americans and Asians.
  2. # in CU – 2+ people (78.2%) down from 81.4%. The share for Pet Products is now lower than for Total Pet, 79.7%. However, If you put 2 people together, pets very likely will follow and you must spend money on food and supplies. Their 112.0% performance is down from 117.9%. Only 4 People CUs spent less but the lift was below average overall and for all segments but 3 people. The big driver in the drops was a 32.2% increase by Singles.
  3. Housing – Homeowners (77.9%) down from 80.0%. Controlling your “own space” has long been the key to pet ownership and more pet spending. Their performance fell from 123.0% to 119.7% but they stayed 4th in terms of importance for increased pet products spending. However, they are only still in the 120% club if you round up their performance. Both Homeowners and Renters spent more on Pet Products in 2023 but the increase for Renters was +25.3% while the lift for Homeowners was only +9.9%. This drove the drops in share and performance. BTW – Those w/o a mortgage were +8.3% while those w/Mtge were +10.7%.
  4. Age – 35>74 (74.1%) down from 77.1%. Their performance also fell from 112.8% to 108.5%. All age groups but 55>64 had increases. However, the only above average lifts were from <35 & 65>. In fact, the share of spending is now 18.8% for all groups 35>64. The drops came because spending is becoming increasingly balanced by age group.
  5. Area – Suburban & Rural (73.4%) up from 72.7%, and their performance grew from 111.0% to 112.1%. Suburban households are the biggest pet product spenders but all segments had double digit % increases. However, Rural was again the best peformer as their 17.4% lift was the only above average increase.
  6. Income – Over $70K (64.7%, up from 64.3%). 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 128.2% from 136.0%, CU income continues to be the single most important factor in increased Pet Products Spending. As a rule,  Higher Income = Higher Pet Products Spending. 2023 didn’t always follow that rule. Only $40>49K & $50>69K spent less but $30>39K had the biggest lift. A big factor in the share lift & performance drop was a 7.2% increase in $70K> CUs.
  7. # Earners – “Everyone Works” (63.4%) down from 65.3%. Their performance is 108.0%, down from 111.9%. In this group, all adults in the CU are employed. All Earner segments spent more but the drop in share and performance for Everyone Works comes from a couple of factors. Their lift was 9.6% while the other segments were +19.5%. No Earners CUs were even 31+%. Also, the Everyone Works group had 0.7M more CUs while the other group was -0.2M. 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 (62.4%) down from 64.7%. Their performance also fell from 107.2% to 102.4%. Only Mgrs/Professionals spent less but the Wage & Salary group was only +9.0%. Self-Employed were +27.7% and Retirees were +33.0%. This caused the drops in share & performance.
  9. CU Composition – Married Couples (60.0%) down from 61.1%. Their performance fell from 134.4% to 127.8% but they stayed 2nd in importance. Only Married, with an Oldest Child 18> and Single Parents spent less. The drops in share and performance were largely due to a huge, 32.2% spending lift by Singles.
  10. Education – Assoc Degree> (66.5%) down from 68.6%. The performance of the expanded group also dropped from 118.9% to 114.0%. However, Education remains 5th in importance in Pet Products spending. The drops in share and performance were due to a combination of factors. Associates had a small drop, which was the only decrease in the category. The other <College segments were +20% while College Grads were +11.9% with 2.6% more CUs.

For Pet Products, only the Education spending group is different than 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 most demographic categories.

Now, let’s drill deeper and look at 2023’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 7 that are different from 2022, 2 less than last year but the same as Total Pet this year. Changes from 2022 are “boxed”. We should note that half of the Product winners are different from Total Pet. This reflects the influence of Services and the differences between Services & Product spending behavior. These differences are usually minor and often a contiguous segment.

The average performance of the 2023 Product winners was 130.4%, down from 136.1% – 9 were down. The average for the losers was 64.7%, up from 60.7% – 9 were up. The gap between best and worst narrowed from 75.4% to 65.7% indicating that Pet Products spending became more balanced across America in 2023. We should also note:

  • Generation – Baby Boomers replaced Gen X at the top. The Gen Z surge should keep Born <1946 on the bottom.
  • Education – BA/BS replaced Adv. Degree but only won by 1.9%. These 2 are the only 100+% Education performers.
  • Income, # Earners – There were no changes in winners or losers. All are at or near the top or bottom of the income “ladder”. The importance of income is reinforced in many categories like Age, Occupation and Education.
  • CU Composition – The winner’s oldest child is younger, 6>17 rather than 18>. Single Parents replaced singles at the bottom, which is no surprise. All Married CUs perform at 100+%.
  • Race/Ethnic – White, Not Hispanic are the perennial winners in the pet industry but we do see an exception to the high income rule. Asians have the highest income but the worst performance – because they have fewer pets.
  • Occupation – Self-Employed has the highest income & are bosses. They replaced Managers on top. Young Retirees had a great year & were replaced on the bottom by Service Workers, who have the lowest income of any worker.

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 5 repeats from 2022 and only 4 Segments flipped from first to last or vice versa. This is much less turmoil than 2022 which had only 2 repeats but 12 flips. Most of the winners are somewhat surprising but in 5 categories, all segments spent more. Also, 86% of 96 demographic segments spent more. Considering 7.4% inflation, that number falls to 77%. Here are the specifics:

  • Race/Ethnic – Both White, Non-Hispanics and Asians held their spots.
    • Winner – White, Not Hispanic – Products Spending: $55.57B; Up $5.43B (+10.8%)                          2022: White, Not Hispanic
    • Loser – Asian – Products Spending: $1.61B; Up $0.11B (+7.3%)                                                             2022: Asian 
    • Comment – All groups spent more. African Americans (+40.1%) and Hispanics (+19.8%) led the way. All spent a lot more on Food and African Americans had the only drop in Supplies. They made up for it with a 95.5% lift in Food. Food was the big driver as all but Asians had a $1+B increase.
  • Generation – Millennials stayed on top, but Gen X replaced Born <1946 on the bottom.
    • Winner – Millennials – Products Spending: $19.33B; Up $4.18B (+27.6%)                                           2022: Millennials
    • Loser – Gen X – Products Spending: $19.14B; Down $0.97B (-4.8%)                                                      2022: Born <1946
    • Comment – Millennials stayed on top with a big lift in Food. In 2022, Supplies was the driver. Gen X had a 2nd consecutive drop in Product $. In 2022, it was due to a big drop in Supplies. In 2023, Food was -$1.65B.
  • CU Composition – Both the winner and loser are new…and neither is married, which is unusual.
    • Winner – Singles – Products: $14.95B; Up $3.64B (+32.2%)                                                                 2022: Married, Oldest Child 18>
    • Loser – Single Parents – Products: $1.93B; Down $0.93B (-32.6%)                                                    2022: Married, Oldest Child 6>17
    • Comment – Single Parents and Married, Oldest Child 18> were the only segments to spend less on Pet Products. Overall, Married couples were up 11.0% in Products (Avg: 13.0%) and had lifts in both Food & Supplies. However, 2023 was spectacular for Singles. Products: +32.2%; Food: +38.8%; Supplies: +18.6%.
  • # in CU – Both the winner and loser are new. Only 4 People CUs spent less on Products
    • Winner – 1 Person – Products Spending: $14.95B; Up $3.64B (+32.2%)                                             2022: 3 People
    • Loser – 4 People – Products Spending: $8.49B; Down $0.30B (-3.4%)                                                2022: 5+ People
    • Comment: 1 Person was the runaway winner but all spent more on Food. Only 2 & 4 spent less on Supplies.
  • Housing – Homeowners w/o Mtge flipped from 1st to last but all segments spent more on both Food & Supplies.
    • Winner – Homeowner w/Mtge – Products: $15.93B; Up $3.50B (+10.7%)                                       2022: Homeowner w/o Mtge
    • Loser – Homeowner w/o Mtge – Products Spending: $12.10B; Up $1.33B (+8.3%)                        2022: Renter
    • Comment– Renters had the biggest % lift, +25.3% and were only 0.02B behind the winner.
  • Occupation – Both the Winner and Loser flipped.
    • Winner – Retired – Products Spending: $13.61B; Up $3.38B (+33.0%)                                                2022: Mgrs & Professionals
    • Loser – Mgrs & Professionals – Products Spending: $20.57B; Down $0.76B (-3.6%)                       2022: Retired
    • Comment – All but Managers/Professionals and All Other/Unemployed spent more. They also had the only drops in Food but 5 of 8 spent less on Supplies. Tech/Sls/Cler had the biggest % lift in Products, +40.8%.
  • Education – Both winner and loser are new.
    • Winner – BA/BS Degree – Products Spending: $21.76B; Up $3.38B (+18.4%)                                   2022: HS Grad or Less
    • Loser – Associate’s Degree – Products Spending: $7.21B; Down $0.09B (-1.3%)                              2022: Adv College Degree
    • Comment – Only Associates spent less. HS Grads w/some College had the biggest % lift, +31.3%, while Adv. Degrees had the lowest, +4.5%. Overall, <College were +14.4% and College Grads were +11.9% -2 straight wins.
  • Area Type – The winner and loser held their spots and again all Area Types spent more.
    • Winner – Suburbs 2500> – Products Spending: $29.88B; Up $3.18B (+11.9%)                                 2022: Suburbs 2500>
    • Loser – Center City – Products Spending: $18.24B; Up $1.68B (+10.1%)                                            2022: Center City
    • Comment – Rural had the biggest % lift, +17.4%. The only drop was that Center City spent -2.8% less on Supplies.
  • Region – All regions spent more but both the winner and loser are new.
    • Winner – Northeast – Products Spending: $12.67B; Up $2.99B (+30.9%)                                           2022: Midwest
    • Loser – South – Products Spending: $21.80B; Up $0.32B (+1.5%)                                                         2022: West
    • Comment – All regions spent more on Food. The South and West spent less on Supplies.
  • Age – The 55>64 yr-olds flipped from first to last – a 2nd consecutive flip.
    • Winner – 65>74 yrs – Products Spending: $12.13B; Up $2.60B (+27.3%)                                            2022: 55>64 yrs
    • Loser – 55>64 yrs – Products Spending: $12.87B; Down $0.38B (-2.9%)                                             2022: 75> yrs
    • Comment: 55>64 had the only Product $ drop. They spent less in Food & Supplies. The only other Food drop came from 45>54. 25>34 & 75+ also bought less Supplies. The lift for 65>74 was driven by a big increase in Food.
  • # Earners – Both the winner and loser are new, but all segments spent more.
    • Winner – 1 Earner, Single – Products Spending: $9.30B; Up $2.31B (+32.9%)                                  2022: 1 Earner, 2+ CU
    • Loser – 3+ Earners – Products Spending: $8.39B; Up $0.45B (+5.7%)                                                 2022: No Earner, 2+ CU
    • Comment – While income matters most, the # of Earners is still not a major factor in Pet Products spending as 1 Earner segments won in 22 & 23. In 23, No Earner segments were up 31+% and 3+ Earners had the smallest lift.
  • Income – Both the loser and winner are low income – unusual!
    • Winner – $30>39K – Products Spending: $5.39B; Up $1.91B (+55.0%)                                                2022: $100>149K
    • Loser – $40>49K – Products Spending: $3.16B; Down $1.00B (-24.0%)                                               2022: $200K>
    • Comment – A limited spending rollercoaster: <$40K = +$3.73B; $40>69K = -$1.24B; $70K> = +$5.38B. Only Drops: <30K: Supplies; $40>49K: Products, Food & Supplies; $50>69K: Products & Food; $100>149K: Supplies

We’ve now seen the winners and losers in terms of increase/decrease in Pet Products $ for 12 Demographic Categories. 2023 was a good year for Pet Products Spending. Food $ took off with a record lift after the small increase in 2022. Supplies spending seems to be mirroring Food. A Binge, a Bust and now a Small lift. The 2023 result was a 13.0% lift in which 86% of 96 demographic segments spent more on Pet Products. Even with inflation, that number was 77% – Still Very Good! 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 $7.89B in 2023 from a record increase in Food and a small lift in Supplies. The lift in Pet Products spending was widespread as 86% 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 continued their growing commitment to Pet Parenting with a 59% lift after doubling their Pet Products spending in 2022. Some other low-income segments that often finish on the bottom in spending also had a good year. No Earner, 2+CUs, Renters, <$30K and Single Parents all increased spending by 25+% and had lifts over $1.5B. The number of Earners is less important but so is being “the Boss”. The lower level White Collar Technical/Sales/Clerical group has an average income, but they are firmly committed to their Pets. They spent $3.3B (+40.8%) more on Pet Products in 2023. Formal, higher education is also a little less “necessary” as HS Grads w/some college had a $2.7B (+31.3%) increase in Pet Products spending. The lift in Pet Products spending was definitely widespread and more balanced so there were many “heroes”.

Summary

Pet Products spending has seen a lot of turmoil since 2015. 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. They seized the opportunity and spent $7B more. In 2018 the FDA warning on grain free dog food caused many consumers to downgrade their food and new tariffs on Supplies flattened spending growth. Products $ fell -$1B. In 2019 Pet Food spending rebounded to a record level but the higher prices in the Supplies segment really hit home. Supplies Spending fell $2.98. Pet Products $ fell -$0.64B, the second consecutive decrease.

2020 brought the COVID pandemic. Pet Parents binge bought Pet Food in the 1st half of the year. As Pet Parents focused on “needs”, discretionary Supplies $ dropped significantly. However, Pet Products spending still grew by $3.99B to $52B.

In 2021, the Food binge was not repeated so spending fell, but Pet Parents caught up on purchasing all the Supplies that they had postponed buying. The result was a record increase in Supplies and a $6.21B increase in Pet Products $.

2022 was more normal. Pet Food spending increased $4.29B, +12.5%. The Supplies binge was not repeated but Supplies spending only fell -7.8%. The net was a $2.42B, +4.2% increase which pushed Pet Products $ up to $60.63B. The lift was widespread as 70% demographic segments spent more. 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 definitely improved

In 2023, Food had a record lift while Supplies $ rose 4.9% as they began to recover from their 2022 “bust”. The $7.89B (+13.0%) lift was widespread as 86% of demographic segments had increases. Even with 8.0% inflation, 77% spent more. While Income remains the most important factor, Pet Products spending continued to become a little more balanced. The best way to measure this is to compare the disparity between the best and worst performers. Overall, the disparity fell from 75.4% in 2022 to 65.7% in 2023. Again, the gap narrowed in 10 of 12 categories. Area & Region were the only exceptions. Gen Z’s growth also continued, and they were joined by the 65> group. 2023 was a great year.

Finally,… The “Ultimate” 2023 Pet Products Spending CU is 3 people, a married couple with a child 6>17. They are in the 45>54 age range and are White, but not Hispanic. At least one has an Advanced College Degree. They own their own business and everyone works, including their child (part time), producing a CU income of $150>199K.They still have a mortgage on their house located in an area with a population <2500 in the Midwest.