2022 Total Pet Spending was $102.71B – Where did it come from…?

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Total Pet Spending in the U.S. was $102.71B in 2021, a $2.73B (2.7%) increase from 2021. These figures and others in this report are calculated from data in the annual Consumer Expenditure Survey conducted by the US BLS. 2021 was tumultuous but it was almost all positive. The Food binge couldn’t be repeated so Food $ fell slightly but all other segments had record increases which produced the biggest Pet spending lift in history. 2022 had mixed results. Like the Food segment, the binge spending on Supplies and Veterinary Services was not repeated, so spending fell in both segments. However, Pet Food bounced back with a 12.5% increase and Services continued their spectacular growth. This produced only a small increase in Total Pet $ Spending but it certainly deserves a closer look.

The first question is, “Who is spending most of the $103 billion dollars?” There are of course multiple answers. We will look at Total Pet Spending in terms of 10 demographic categories. In each category we will identify the group that is responsible for most of the overall spending. Our goal was to find demographic segments in each category that account for 60% or more of the total. To get the finalists, we started with the biggest spending segment then bundled it with related groups until we reached at or near 60%.

Knowing the specific group within each demographic category that was responsible for generating the bulk of Total Pet $ is the first step in our analysis. Next, we will drill even deeper to show the best and worst performing demographic segments/groups and finally, the segments that generated the biggest dollar gains or losses in 2022.

In the chart that follows, the demographic categories are ranked by Total Pet market share from highest to lowest. We also included their share of total CU’s (Financially Independent Consumer Units) and their performance rating. Performance is their share of market vs their share of CU’s. This is an important number, not just for measuring the impact of a particular demographic group, but also in measuring the importance of the whole demographic category in Spending. All are large groups with a high market share. A performance score of 120+% means that this demographic is extremely important in generating increased Pet Spending. I have highlighted the 5 groups with 120+% performance.

The only group change from 2021 is that College Grads lost 6% in share and fell below the 60% threshold so Associate’s Degree> returned to the list. There were changes in the numbers and rankings. Homeowners moved up from 3rd to 2nd and the new Education group is 5th. College Grads were 7th in 2021. Again only 5 made the 120%+ club. Associate’s Degree> replaced College Grads in the club. Formal higher education matters. However, higher income remains the single most important factor in Total Pet Spending.

  1. Race/Ethnic – White, not Hispanic (83.9%) down from 84.2%. This is the 2nd largest group and has the largest share of Pet Spending. Their performance was down from 125.3% to 124.9% but they moved up from #4 to #3 in importance. Although this demographic, along with age, are 2 areas in which the consumers have no control, spending disparities within the group are enhanced by differences in other areas like Income, CU Composition and homeownership. There are also apparently cultural differences which impact Pet Spending. Asian Americans are first in income, education and total CU spending but they’re last in Pet Spending as a percentage of total spending – 0.40% vs a national average of 1.05%.
  2. Housing – Homeowners (81.2%) up from 80.0%. Controlling your “own space” is a key to larger pet families and more pet spending. 2022 was a good year for Homeowners, with & without Mtges. Homeowners spent $3.5B more and the group’s performance grew from 123.6% to 124.8%. Contributing to the increase was a 3.6% drop in spending by Renters. Homeowners moved up from 5th to 4th place in importance. The homeownership rate grew slightly to 65.1%. The lift came entirely from younger CUs as homeownership remained stable in the older groups.
  3. # in CU – 2+ people (80.8%) up from 80.6%. Singles remain the only group with under 100% performance. In 2022, there was a big increase in the number of singles, but they spent even less on their pets. At the same time, 3 person CUs spent $3.2B more. This explains the change in share and a performance increase from 115.9% to 117.1%.
  4. Area – Suburban & Rural (71.7%) down from 71.8% Homeownership is high and they have the “space” for pets. All areas spent more but Center City had the biggest % lift. This, in conjunction with more CUs, pushed Suburban/Rural’s performance down from 111.4% to 109.5%. Center City still has the worst performance at 82.1%
  5. Education – Associates Degree or more (71.5%) down from 74.7%. Higher Education is usually tied to higher income and Pet spending. It can also be a key factor in recognizing the value in product improvements. In 2021 College Grads binge spent $21.6B more on their pets. This was not repeated in 2022 so we returned to the Associates Degree or higher group. This group’s performance fell from 129.6% to 123.9% but they are #5 in importance. The drops are all due to College Grads. In 2022, the Associates Degree segment increased their share of Pet $ from 9.1% to 12.1% and their performance grew from 88.3% to 110.2%. They earned their spot.
  6. Income – Over $70K (67.5%) down from 68.2%. They lost a little share and their performance fell to 142.8% from 152.3%. However, CU income is still by far the most important factor in increased Pet Spending. Spending was again on a roller coaster: <$40K: -$0.5B; $40>69K: +$2.1B; $70>99K: -$1.2B; $100>199K: +$2.7B; $200K>: -$0.4B. Higher income is important. Consider: $100K> = 33.2% of CUs, 53.3% of Pet $; $150K> = 17..7% of CUs, 32.9% of Pet $
  7. # Earners – “Everyone Works” (66.8%) up from 66.4%. These are CUs of any size where all adults are employed. They gained share but their performance fell again, from 117.0% to 114.5%. They dropped out of the 120+% club in 2021 and are now only the 8th most important category. Income is important but # of Earners is less so. They gained share due to a +$2.77B lift from 2+ Earner CUs but their performance fell because they added 2.5 million more CUs.
  8. Occupation – All Wage & Salary Earners (65.7%) up from 63.2%. Their performance also grew from 106.5% to 109.0%. All but Service Workers spent more on their pets in 2022. Managers and Professionals (+$2.98B) and Blue Collar (+$1.43B) had the biggest spending increases. Blue Collar workers actually spent 30.2% more on their pets. Their gains were enhanced by a -$0.98B drop by Retirees and a -$1.2B decrease by “All Other”, which includes unemployed and those not working because of illness or attending school.
  9. CU Composition – Married Couples (61.8%) down from 62.7%. 2 people, committed to each other, is an ideal situation for Pet Parenting. In 2022, they lost share and their performance fell from 132.4% to 129.3%, but they moved up from 3rd to 2nd place in importance because College Grads dropped out. Their drops in share and performance were due to a -$2.6B decrease from those with an oldest child 6>17 and a big lift by single parents.
  10. Age – 35>64 (61.1%) up from 60.9%. They gained share and their performance grew from 116.2% to 117.2%. A $4.3B increase from 45>64 overwhelmed the $2.3B drop by the 35>44 yr-olds. <25 was +$0.77B while the 65> lift and 25>34 drop cancelled each other out. Pet Spending is slightly more balanced, and age stayed 7th in importance.

Total Pet Spending is a sum of the spending in all four industry segments. The “big demographic spenders” listed above are determined by the total pet numbers. The share of spending and performance of these groups varies between segments. In fact, in the Veterinary & Services segments we altered some groups to better reflect where most of the business is coming from. There’s was some turmoil but in 2022 Pet Spending returned to more normal behavior.

Performance is an important measurement. Any group that exceeds 120% indicates an increased concentration of the business which makes it easier for marketing to target the big spenders. Income over $70K is again the clear winner, but there are other strong performers. High performance also indicates the presence of segments within these categories that are seriously underperforming. These can be identified and targeted for improvement. However, 2022 is a bit more complicated. Many of the big drops in spending came from segments that binge bought Supplies & Vet Services in 2021. These big moves, up or down can affect the total group performance. We’re not there yet but we’re closer to normal.

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

Most of the best and worst performers are expected but there are 4 winners & 3 losers that are different from 21. Last year there were 9 new winners and 1 loser. The situation is becoming more normal. Changes from 2021 are “boxed”.

  • Income is important in Pet Spending, which is shown by the 195.5% performance by the $200K> group and wins by the high income 3 Earners, Mgrs/Prof, 45>54 and Adv College Degrees. All groups over $70K performed at 100+%.
  • Occupation – Mgrs/Professionals & Self-Employed are the only occupations with 100+% performance. Retirees edged out Service Workers (76.9%) for the bottom spot.
  • Age/Generation – Gen X won again but spending skewed towards their older members with the 45>54 win.
  • Region – The Midwest returned to the top. The West (the usual winner) also had 100+% performance.
  • CU Size/Composition – The importance of children was maintained with wins by 4 People and those with an Oldest Child over 18. Single Parents had a strong year and moved off the bottom. The “magic” CU number fell from 5 to 4.

The winners reflect the continued move back towards more normal spending patterns from slightly older CUs. In the next section we’ll look at the segments which literally made the biggest difference in spending in 2022.

We’ll “Show you the money”! This chart details the biggest $ changes in spending from 2021.

Like 2021, in 1 category, all segments spent more – Area Type. In 2021, it was # of Earners. Only 3 segments held their spot from 2021 while 9 switched from winner to loser or vice versa. There was considerable internal turmoil but much less than in 2021 when 17 flipped. However, 87.5% were different from last year, just a little better than 96% in 2021.

  • Region – The winner and loser both flipped. This only happened in the Region Category.
    • Winner – Midwest – Pet Spending: $25.36B; Up $6.39B (+33.7%)                                2021: West
    • Loser – West – Pet Spending: $26.32B; Down -$3.99B (-13.2%)                                     2021: Midwest
    • Comment – In 2021 the Midwest had the only decrease in Total Pet $. In 2022 they had double digit increases in all segments. The South also spent more, +$1.9B. The West spent less in all but Services.
  • Education – Adv College degrees flipped to last, but all College Grads spent less in every industry segment.
    • Winner – Associates Degree – Pet Spending: $12.41B; Up $3.33B (+36.7%)                       2021: Adv. College Degree
    • Loser – Adv. College Degree – Pet Spending: $28.70B; Down -$3.74B (-11.5%)                 2021: < HS Grads
    • Comment – All segments w/o a College Degree spent more but those with an Associate’s Degree had an especially strong year. Their Vet spending was only +5.8% but Services was +116.3% and Products was +47.5%.
  • Age – The 35>44 yr-olds flipped to the bottom as they “gave back” the 2021 big lifts in Supplies & Veterinary.
    • Winner – 45>54 yrs – Pet Spending: $21.80B; Up $3.29B (+17.8%)                              2021: 35>44 yrs
    • Loser – 35>44 yrs – Pet Spending: $19.05B; Down $2.34B (-10.9%)                             2021: 55>64 yrs
    • Comment: The high-income 45>54 yr-olds are back on top but only the 25>44 and 75+ groups spent less.
  • # in CU – A new winner and loser but no flips.
    • Winner – 3 People – Pet Spending: $17.73B; Up $3.23B (+22.2%)                                2021: 2 People
    • Loser – 5+ People – Pet Spending: $10.27B; Down -$1.21B (-10.6%)                            2021: 4 People
    • Comment: All groups spent more on Services but less on Veterinary. Only 2 People CUs spent less on Food while only 3 People CUs spent more on Supplies. However, only 2 & 5+ people CUs spent less Total Pet $.
  • Occupation – Retirees flipped from 1st to last.
    • Winner –– Managers & Professionals – Pet Spending: $37.57B; Up $2.98B (+8.6%)           2021: Retired
    • Loser – Retired – Pet Spending: $17.32B; Down -$0.98B (-55.3%)                                           2021: Self-Employed
    • Comment– Only Retirees, Service Workers & Unemployed/All other spent less. Blue & White collar spent more.
  • CU Composition – With big lifts in all but Veterinary, Married with an oldest child over 18 flipped from last to 1st.
    • Winner – Married, Oldest Child 18> – Pet Spending: $11.498; Up $2.70B (+30.7%)                       2021: Married, Couple Only
    • Loser – Married, Oldest Child 6>17 – Pet Spending: $14.52B; Down -$2.58B (-15.1%)                  2021: Married, Child 18>
    • Comment – Married, oldest child 6>17 spent more on Services but were the only group with a drop in Total Pet $
  • Income – With double digit increases in all but Veterinary, $100>149K flipped to the top.
    • Winner – $100>149K – Pet Spending: $20.99B; Up $2.49B (+13.4%)                              2021: $200K>
    • Loser – $70 to $99K – Pet Spending: $14.58B; Down -$1.16B (-7.3%)                             2021: $100>149K
    • Comment – There was no clear pattern. This category was on a spending rollercoaster. <$40K: -$0.54B; $40>69K: +$2.13B; $70>99K: -$1.16B; $100>199K: +$2.72B; $200K>: -$0.41B.
  • # Earners – After their surprising win in 2021, No Earner 2+ CUs flipped to the bottom.
    • Winner – 1 Earner, 2+ CU – Pet Spending: $19.01B; Up $2.17B (+12.9%)                        2021: No Earner, 2+ CU
    • Loser – No Earner, 2+ CU – Pet Spending: $7.67B; Down $2.53B (-24.8%)                      2021: 1 Earner, Single
    • Comment – 1 Earner, singles also spent less. All other groups including No Earner, Singles spent more.
  • Race/Ethnic – White, Not Hispanics stayed on top.
    • Winner – White, Not Hispanic – Pet Spending: $86.18B; Up $2.04B (+2.4%)                2021: White, Not Hispanic
    • Loser – Hispanic – Pet Spending: $9.45B; Down -$0.54B (-5.4%)                                     2021: African American
    • Comment – African Americans had a huge, +43.9% increase but Hispanics and Asians spent less.
  • Generation – In a true surprise, Gen Z is on top. They are “growing up” and Pet Parenting is radically increasing.
    • Winner – Gen Z – Pet Spending: $3.48B; Up $1.84B (+112.6%)                                          2021: Gen X
    • Loser – Born <1946 – Pet Spending: $5.19B; Down -$1.46B (-22.0%)                               2021: Baby Boomers
    • Comment – Boomers had the 2nd biggest lift and only the oldest generations, born <1946 spent less.
  • Housing – Homeowners w/o Mtge flipped from last to 1st
    • Winner – Homeowner w/o Mtge – Pet Spending: $26.94B; Up $1.79B (+7.1%)             2021: Homeowner w/Mtge
    • Loser – Renter – Pet Spending: $19.27B; Down -$0.73B (-3.6%)                                       2021: Homeowner w/o Mtge
    • Comment – The win by Homeowners w/o Mtge was driven by CUs who have paid off their home but haven’t retired. They just edged out Homeowners w/Mtge, +$1.67B. Only Renters spent less.
  • Area Type – Both winner and loser held their positions and all segments spent more.
    • Winner – Suburbs 2500> – Pet Spending: $46.46B; Up $0.99B (+2.2%)                          2021: Suburbs 2500>
    • Loser – Areas <2500 – Pet Spending: $27.18B; Up $0.81B (+3.1%)                                  2021: Areas <2500
    • Comment – The Big Suburbs stayed in their usual spot at the top. Center City had a +$0.93B lift and Areas <2500 rebounded from a drop in 2021. The increases were pretty balanced, ranging from +2.2% to +3.3%.

We’ve seen the best overall performers and the “winners” and “losers” in terms of increase/decrease in Total Pet Spending $ for 12 Demographic Categories. Now, here are some segments that didn’t win an award, but they deserve….

HONORABLE MENTION

It was not a good year for College Grads but it was a great year for those without a BA/BS. Associates had the biggest lift but those w/o a HS diploma more than doubled their Pet $. Single parents are often on the “bottom” in Pet Spending, but they spent 54% more in 2022. In 2021, African Americans had the only drop in spending by a racial/ethnic group. In 2022 they rebounded with a +43.9% increase, by far the biggest percentage lift of any group in the category. Not all Gen Zers are under 25 but all CUs below 25 are Gen Z. The <25 group have radically increased their Pet Parenting responsibility and spending. Pet Spending continues to be centered in the higher income groups but almost 70% of all CUs have pets. They are an important part of the family for all Pet Parents. Although they didn’t win any awards, the 28% Pet Spending increases by Blue Collar Workers and the low income $40>49K group clearly demonstrate the widespread importance of the Pet members of U.S. households.

Summary

To properly review 2022, we must put it into context with recent history. Total Pet Spending reached $78.60B in 2018, a $14.28B, 22.2% increase from 2014. However, it was not a steady rise, Total spending actually fell in 2016 and each segment had at least one down year. There were a number of factors driving both the growth and tumult within the industry. Two big positives were the movement to super premium pet foods and the rapid expansion of the number of outlets offering pet services. On the downside were value shopping, trading $ between segments and outside influences like the FDA dog food warning and tariffs. Pricing, inflation/deflation was also a negative/positive factor in some cases.

In 2019, the industry had another small decrease, -$0.16B (-0.2%) which was largely driven by a huge drop in spending in Supplies caused by Tarifflation. This affected virtually every demographic segment and caused Supplies $ to fall below 2014. Services spending also fell slightly as consumers value shopped. The good news was that Pet Food bounced back from the impact of the 2018 FDA warning to reach a new record high. Veterinary $ also increased 2.7%. Unfortunately, this was entirely due to a 4.1% increase in prices. The amount of Vet Services sold actually decreased.

That brings us to 2020 and the Pandemic turmoil. The effect was positive for Food and Veterinary, especially Food. Out of fear of shortages, many Pet Parents binge bought Pet Food. Spending also increased in Veterinary, as consumers focused on their Pets’ needs. The discretionary segments suffered. Supplies prices stayed high, so spending continued to decline. Services saw the biggest negative pandemic impact as many outlets were subject to closures and restrictions.

2021 was a new year and brought a change in attitude as the marketplace returned to “normal”. The Food binge buying wasn’t repeated but Pet Parents caught up with all their “children’s” wants and needs. This produced a record increase in Total Pet +$16.23B) and in all segments but Food. Gen X took back the top spot in $ and  Pet spending skewed younger and back to more traditional winners, like Homeowners w/Mtges and Incomes over $200K.

In 2022, the spending lift was much smaller. Food $ increased by 12.5% and Services had another record increase, +$3.26B. This was enough to overcome the big “binge drops” in Veterinary and Supplies and produce a 2.7% increase in Total Pet $. 72% of 96 demographic segments spent more on their pets. This is good but down considerably from 83% in 2021. The lift was not quite as widespread as 2021 but in some ways, spending became a little more balanced with strong performances by those without a college degree, Blue Collar workers, African Americans and Gen Z – to name a few. Income is still important as Gen X stayed on top. Spending also skewed a little older towards the oldest Gen Xers, 45>54 yr olds. Baby Boomers are still the “heart” of the Pet Industry, but Gen Xers are likely to stay on top in $ for a number of years, until they are eventually displaced by the Millennials.

Before we go…The Ultimate Total Pet Spending CU in 2022 has 4 people, a married couple with an oldest child 18>. They are 45>54 yrs-old. They are White, but not Hispanic. Both work and so does their oldest child. At least one has an Advanced College Degree and is a Mgr/Professional. They earn $200K+. They still have a mortgage on their house located in a small suburb in the Midwest.