Archive for category: Pet Market Segments

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 2^nd place in the 21>24 rates. Deflation in the 1^st 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 2^nd 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 2^nd in 19>24 inflation but only 4^th 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.

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 3^rd 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 4^th 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 2^nd 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 5^th 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 2^nd 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 1^st 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 2^nd 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 1^st 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.

Total Pet Spending in the U.S. was $117.60B in 2023, a $14.89B (14.5%) increase from 2022. These figures and others in this report are calculated from data in the annual Consumer Expenditure Survey conducted by the US BLS. 2022 had mixed results. Like the Food segment a year earlier, the 2021 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 2.7% increase in Total Pet Spending. In 2023, the Binge/Bust pattern was over. Even with 8% inflation, all segments had an increase in spending. The lifts for Supplies & Services were small but the Food & Vet lifts were huge. This produced the 3rd largest lift in history. 2023 deserves a closer look!

The first question is, “Who is spending most of the $117.6 billion dollars?” There are of course multiple answers. We will first 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 2023.

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.

There were 2 group changes from 2022. College Grads returned to the list as their share grew while Associate’s fell. A share loss by 45>64 and gain by 65>74 caused the age group to expand. There were also changes in the numbers and rankings. Homeowners fell from 2nd to 3^rd. College Grads returned to the list at #10 but the expanded age group moved up from #10 to #4. Again only 5 made the 120%+ club. College Grads replaced Associate’s Degree> in the club. Formal higher education matters, but higher income remains the single most important factor in Total Pet Spending.

1. Race/Ethnic – White, not Hispanic (82.5%) down from 83.9%. This is the 3rd largest group but it has the largest share of Pet Spending. Their performance was down from 124.9% to 124.4% and they dropped from #3 to #4 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 – 0.44% vs a national average of 1.13%.
2. # in CU – 2+ people (79.7%) down from 80.8%. Singles still have by far the worst performance. In 2023, there was a 2.3% drop in the number of singles, but they spent 20.7% more on their pets. At the same time, 2+ people CUs spent 13.0% more. This explains the small drop in share and a performance decrease from 117.1% to 114.2%.
3. Housing – Homeowners (79.6%) down from 81.2%. Controlling your “own space” is a key to larger pet families and more pet spending. 2023 was not a bad year for Homeowners, with & without Mtges. Homeowners spent $10.2B more but the group’s performance fell from 124.8% to 122.4%. The biggest factor in the decrease was a 24.2% lift in spending by Renters. Homeowners fell from 4th to 5th place in importance. There were some minor changes but the overall homeownership rate remained steady at 65.1%. Those w/o a Mortgage rose from 27.0% to 27.3%
4. Age – 35>74 (75.4%) down from 77.1%.They lost share and their performance fell from 112.8% to 110.5%. All Age groups spent more but the lift of the 45>64 group was far below average. The youngest and oldest groups had the biggest lifts. To meet the 60% share goal, the group had to be expanded. However, Pet Spending is now more balanced by age group and age fell from 7th to 8th in importance.
5. Area – Suburban & Rural (71.8%) up from 71.7% Homeownership is high and they have the “space” for pets. All areas had increases but the Suburbs had the biggest lift. Center City gained more CUs. This combination pushed Suburban/Rural’s performance up from 109.5% to 109.6%. Center City still has the worst performance at 81.8%
6. Income – Over $70K (70.0%) up from 67.5%. They gained share but their performance fell to 138.6% from 142.8%. The disparity was due to a 3.2% lift in CUs. However, CU income is still by far the most important factor in increased Pet Spending. Spending was up for all groups but $40>49K. $30>39K had the biggest % lift, +46%, but all other groups <$70K had increases <5%. $70K> was up +18.6%. Income matters. $100K>: 36.4% of CUs, 55.9% of Pet $
7. # Earners – “Everyone Works” (66.2%) down from 66.8%. These are CUs of any size where all adults are employed. They lost share and their performance fell again, from 114.5% to 112.8%. They dropped out of the 120+% club in 2021 and are only the 7^th most important category. Income is important but # of Earners is less so. All segments spent more. The drops were due to a 37% lift from No Earner, 2+ CUs and only a 4.1% lift from 3+ Earners.
8. Occupation – All Wage & Salary Earners (64.7%) down from 65.7%. Their performance also fell from 109.0% to 106.2%. All but Blue Collar workers & “All Other” spent more on their pets in 2023. However, among workers, only Tech/Sls/Clerical and Self-Employed spent more than the average increase. The drops in share & performance were due to the big spending lift from Self-Employed in conjunction with a 32% increase by Retirees. BTW: “All Other”, includes unemployed and those not working because of illness or attending school.
9. CU Composition – Married Couples (61.4%) down from 61.8%. 2 people, committed to each other, is an ideal situation for Pet Parenting. In 2023, they lost share and their performance fell from 129.3% to 127.4%, but they stayed in 2^nd place in importance even though College Grads returned to the list. Their lift was below average (+13.8%) and the drops in share and performance were due to big spending increases by singles and unmarried, all adult CUs.
10. Education – College Grads (60.6%) up from 59.4%. 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 2022 the Education group was expanded to hit the 60% share goal. In 2023, big lifts in the Service segments returned them to the list. Their 2023 performance fell from 127.0% to 126.7% but they are #3 in importance. In Education, only Associate’s Degree spent less. The gain in share and drop in performance is primarily due to a 2.6% increase in CUs with a college grad.

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 every segment we altered at least 1 group (4 in Pet Services) to better reflect where most of the business is coming from. There was some turmoil, but in 2023 Pet Spending had a great year.

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. In 2020>2022 many of the big lifts and drops in spending came from a series of buying binge/busts which affected every segment. All segments had at least a small increase in 2023 so we may be getting closer to normal.

Now, let’s drill deeper and look at 2023’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 22 – the same as last year. The situation is definitely becoming more normal. Changes from 2022 are “boxed”.

• Income is important in Pet Spending, which is shown by the 181.9% performance by the $200K> group and wins by the high income 3 Earners, Mgrs/Prof and Adv College Degrees. All groups over $100K performed at 100+%.
• Occupation – Tech/Sls/Cler joined Mgrs/Professionals & Self-Employed as the only occupations with 100+% performance. Service Workers (75.5%) replaced Retirees at the bottom.
• Age/Generation: Gen X won again but spending moved towards their oldest members & youngest Boomers, 55>64
• Region – The West returned to the top. The Midwest also had 100+% performance.
• CU Size/Composition – The importance of children was maintained with wins by 3 People and those with an Oldest Child 6>17. Single Parents returned to the bottom. The “magic” CU number continues to fall – from 4 to 3.

The winners reflect the continued move back towards more normal spending patterns, but from slightly older CUs. In the next section we’ll look at the segments which literally made the biggest difference in spending in 2023.

We’ll “Show you the money”! This chart details the biggest $ changes in spending from 2022.

In 2022 there was only 1 category in which all segments spent more. In 2023, there were 6 – Race, Area Type, Housing, Region, Earners and Age. There was also more stability. 4 segments held their spot from 2022 and 3 flipped from 1^st to last or vice versa.  In 2022, 3 segments were stable and 9 flipped. However, 83.3% were different from last year, just a little less than 87.5% in 2022. We should also note that with 8% inflation, the 14.5% Total Pet lift was really only +6.0%.

• Race/Ethnic – White, Not Hispanics stayed on top, but all segments spent more.
  • Winner – White, Not Hispanic – Pet Spending: $97.06B; Up $10.88B (+12.6%)                                 2022: White, Not Hispanic
  • Loser – Asian – Pet Spending: $3.19B; Up $0.51B (+18.9%)                                                                   2022: Hispanic
  • Comment – African Americans & Hispanics were up 20+%. Asians “lost” with +18.9%. Average lift: +14.5%
• Area Type – Both winner and loser held their positions, and all segments spent more – just like 2022.
  • Winner – Suburbs 2500> – Pet Spending: $53.72B; Up $7.26B (+15.6%)                                               2022: Suburbs 2500>
  • Loser – Areas <2500 – Pet Spending: $30.67B; Up $3.49B (+12.9%)                                                        2022: Areas <2500
  • Comment – The Big Suburbs stayed in their usual spot at the top. Center City had a +$4.13B lift and Areas <2500 have fully recovered from a drop in 2021. The increases were pretty balanced, ranging from +12.9% to +15.6%.
• Housing – All spent more but Homeowners w/o Mtge flipped from 1^st to last – That’s two consecutive flips for them.
  • Winner – Homeowner w/Mtge – Pet Spending: $63.44B; Up $6.93B (+12.3%)                                   2022: Homeowner w/o Mtge
  • Loser – Homeowner w/o Mtge– Pet Spending: $30.22B; Up $3.28B (+12.2%)                                    2022: Renter
  • Comment – Homeowners w/Mtge returned to their usual spot on top. Renters were up $4.67B, +24.2%. Their lift percentage was almost double the +12.2% for Homeowners.
• Generation – These “rising stars” finally made it to the top of the chart with a $6.56B increase.
  • Winner – Millennials – Pet Spending: $32.18B; Up $6.56B (+25.6%)                                                       2022: Gen Z
  • Loser – Born <1946 – Pet Spending: $4.86B; Down -$0.34B (-6.5%)                                                        2022: Born <1946
  • Comment – Boomers had the 2^nd biggest lift and only the oldest generations, born <1946 spent less.
• Occupation – Retirees flipped from last to 1^st – their 2^nd consecutive flip.
  • Winner –– Retired – Pet Spending: $22.85B; Up $5.53B (+32.0%)                                                      2022: Managers & Professionals
  • Loser – Blue Collar – Pet Spending: $6.01B; Down -$0.16B (-2.5%)                                                    2022: Retired
  • Comment– Only Blue Collar & Unemployed/All other spent less.
• # in CU – A new winner and loser but no flips.
  • Winner – 2 People – Pet Spending: $45.12B; Up $5.51B (+13.9%)                                                           2022: 3 People
  • Loser – 4 People – Pet Spending: $14.79B; Down -$0.56B (-3.6%)                                                            2022: 5+ People
  • Comment: Only 4 people CUs spent less. The lift was definitely skewed towards smaller CUs. 1>3 person CUs have 77.8% of CUs but generated 94% of the lift. 1 & 3 person CUs were up 20+% – the only above average lifts.
• Region – All segments spent more and the winner and loser were both new.
  • Winner – Northeast – Pet Spending: $21.92B; Up $5.45B (+33.1%)                                                         2022: Midwest
  • Loser – South – Pet Spending: $36.38B; Up $1.81B (+5.2%)                                                                       2022: West
  • Comment – The West had the 2^nd biggest increase, +$4.89B. They did spend less on Supplies but had a big turnaround from -$3.99B in 2022. The South spent less on Supplies and Services, the only other Segment $ drops.
• Education – Associate’s degrees flipped from 1^st to last and had the only spending decrease in the category.
  • Winner – BA/BS Degree – Pet Spending: $37.53B; Up $5.24B (+16.2%)                                                2022: Associates Degree
  • Loser – Associates Degree – Pet Spending: $11.90B; Down -$0.50B (-4.0%)                                        2022: Adv. College Degree
  • Comment – Except for HS Grads w/some College, +27.8%, the lifts from <College were all significantly below the 14.5% average. College Grads (47.8% of CUs) generated 68.9% of the Total Pet lift – 144% performance.
• # Earners – All Segments spent more. The highest income 3+ Earner segment is a bit of a surprise at the bottom.
  • Winner – 2 Earners, 2+ CU – Pet Spending: $47.56B; Up $5.18B (+12.2%)                                           2022: 1 Earner, 2+ CU
  • Loser – 3 Earners, 2+ CU – Pet Spending: $14.46B; Up $0.58B (+4.1%)                                                 2022: No Earner, 2+ CU
  • Comment – 1 Earner, Singles: 2022: -$0.48B, 2023: +$3.44B; No Earner, 2+CU: 2022: -$2.53B, 2023: +$2.84B
• CU Composition – Children became less important as the lift for Married, w/children was only 9.6%. Avg lift: 14.5%
  • Winner – Married, Couple Only – Pet Spending: $33.438; Up $4.58B (+15.9%)                                 2022: Married, Child 18>
  • Loser – Single Parent – Pet Spending: $2.99B; Down -$1.00B (-25.0%)                                                2022: Married, Child 6>17
  • Comment – Only Married, Oldest Child 18> and Single Parents spent less. Bundled together, singles and unmarried, all adult CUs had a $7.16B (+22.7%) increase. That was 48.1% of the 22>23 Total Pet lift.
• Income – All segments but $40>49K spent more.
  • Winner – $200K> – Pet Spending: $24.41B; Up $4.26B (+21.2%)                                                            2022: $100>149K
  • Loser – $40>$49K – Pet Spending: $5.25B; Down -$0.95B (-15.4%)                                                        2022: $70>99K
  • Comment – No spending rollercoaster this year. $30>39K had the biggest percentage lift, +46.0% but all other segments <$100K were below average. The $100K> segments (36.4% of CUs) generated 73.8% of the Total lift.
• Age – All groups spent more. However, the 45>54 yr-olds flipped to the bottom and 65>74 was a surprise winner.
  • Winner – 65>74 yrs – Pet Spending: $19.71B; Up $3.27B (+19.9%)                                                           2022: 45>54 yrs
  • Loser – 45>54 yrs – Pet Spending: $22.51B; Up $0.72B (+3.3%)                                                                2022: 35>44 yrs
  • Comment: Only 45>64 had a below average lift. All ages from 25>74 have 90+% performance. More balanced.

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

2023 was a great year for segments that are usually at or near the bottom in Pet Spending. Gen Z had lifts in all segments. Only their Services lift was less than 50%. They are becoming even more committed to Pet Parenting. Big lifts by $30>39K and No Earner, 2+ CUs reflect the exceptionally strong performance of Retirees, especially the 65>74 yr old newly retired group. HS Grads w/some College are definitely in the HS Grad/College Grad gap and are rarely noticed. In 2023 they had double digit % increases in all segments. They deserve to be noticed. Renters and 1 Person CUs are usually at the bottom in spending lifts and/or performance. Both still have the lowest performance in their category but their $4B Total Pet spending increases should be noticed and applauded.

Summary

To review 2023, we must look at 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 fell in 2016 and each segment had at least one down year. There were a number of factors driving both growth and tumult. Positives: The move to super premium foods and the increase in pet services outlets. Negatives: 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.

In 2021 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 big increase in Total Pet (+$16.23B) and in all segments but Food. Spending skewed younger and to more traditional winners, like Homeowners w/Mtges and Incomes over $200K.

In 2022, the spending lift was much smaller. Big lifts in Food & Services overcame the “binge drops” in Veterinary and Supplies and produced a 2.7% increase in Total Pet $. 72% of 96 demographic segments spent more on their pets, down from 83% in 2021. Spending became a little more balanced with strong performances by those without a college degree, Blue Collar workers, African Americans and Gen Z. Income is still important as Gen X stayed on top. Spending also skewed a little older towards the older Gen Xers, 45>54 yr olds. Baby Boomers are still the “heart” of the Pet Industry, but Gen X will likely lead CU spending for a number of years, until they are eventually displaced by the Millennials.

In 2023 Total Pet Spending took off, up $14.89B (+14.5%) to $117.6B. All segments had increases. The lifts in the more discretionary segments – Services & Supplies, were small but the Food & Veterinary lifts were huge. The Food increase even set a new record. The lift was widespread as 91% of 96 demographic segments spent more. Even considering 8% inflation, 78% spent more. Income is still the most important factor in all segments but Food and growing in importance. However, 2023 became a little more balanced in many categories, especially Age. Also, many underperforming segments, like Singles and Renters had big increases. 2023 was a great year and Gen X still spends the most Pet $ per CU.

Before we go…The Ultimate Total Pet Spending CU in 2023 has 3 people, a married couple with an oldest child 6>17. They are 55>64 yrs-old, but are Gen Xers, not Boomers. They are White, but not Hispanic. Both work and even their child has a part time job. 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 an area with a population under 2500 in the West.

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 23, then turned up Jan>Oct 24. With a 0.1% increase in prices from last month, the CPI rose in October to +2.6% from +2.4% in September. Grocery prices rose 0.1% from September but inflation slowed to 1.1%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 20 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 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, but Sep>Oct are again below it. We will look deeper into the data. The 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
  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 Oct. 22 to Oct. 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 and those from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In Oct., Pet prices were up 0.2% from Sep. The price lift was driven by Pet & Vet Services. The Product segments were both down.

In October 22, the CPI was +16.0% and Pet was +15.4%. Prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices consistently grew 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 dip by Supplies. 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 despite a few drops. 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 August, Food drove a drop in prices. In Sep, Products fueled a drop. In Oct, Services drove a lift.

• 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 23, dipped in Oct>Dec, then rose Jan>Oct 24, but 31.6% of the 22.8% increase in the 58 months since Dec 2019 happened from Jan>Jun 2022 – 10.3% of the time.
• Pet Food – Prices were at Dec 19 levels from Apr 20>Sep 21. They grew & peaked in May 23. In Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose in Mar, fell Apr>May, grew in June, fell in Jul>Oct. 99% 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 lifts, Mar/Apr drops, May/Jun lifts, July drop, Aug lift & Sep/Oct drops.
• 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 to Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug: ↑, Sep>Dec: ↓, Jan>Mar 24: ↑, Apr: ↓, May: ↑, June: ↓, Jul>Oct: ↑.
• 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>Oct.
• 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 prices turned up and grew through March 24 to a record high. Prices fell in April, rose May>June (a record), fell Jul>Sep, rose in Oct, but Petflation is still below the U.S. CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for October 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 2.1% in September, and it is again below the National rate (-13.1%). In August, it was +12.0%. 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 0.1% from September and were +2.6% vs Oct 23, up from +2.4% last month. Grocery inflation slowed to +1.1% from 1.3%. Only 2 had price decreases from last month – Pet Food and Pet Supplies. There were 3 drops in Aug & Sep, but 5 in July. The national YOY monthly CPI rate of 2.6% is up from 2.4%, but it is 19% below the 22>23 rate and 66% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services and Pet Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 has now only occurred in Total Pet and all Pet segments. Except for Pet Services, where prices are skyrocketing, 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 95% 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 +4.7% while the CPI for Commodities is -1.0%. This clearly shows that Services are driving all of the current 2.6% inflation. There is a similar situation in Pet. Petflation: 2.0%. The CPI for the 2 Service Segments is 6.1%. The Pet Products CPI is -0.7%.

• U.S. CPI– Prices are +0.1% from Sep. The YOY increase is 2.6%, up from 2.4%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 30+% higher than the target. The October increase was a big change after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +14.1%, 62.1% of the total inflation since 2019. Inflation was growing in October 2021, +6.2%
• Pet Food– Prices are -0.3% vs Sep. and -1.3% vs Oct. 23, down from -0.9%. They are still significantly below the Food at Home inflation rate, +1.1%. The YOY drop of -1.3% is being measured against a time when prices were 23.1% above the 2019 level and the current decrease is actually less than the -1.7% drop from 2019 to 2020. The 2021>2024 inflation surge generated 98% of the 21.3% inflation since 2019. Inflation began in 2021.
• Food at Home – Prices are up 0.1% from September but the monthly YOY increase slowed from 1.3% to 1.1%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.2% Inflation for this category since 2019 is 19.8% more than the national CPI but tied for 3rd place behind 2 Services expenditures. 59.2% 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 -0.4% from Sep and inflation fell to +1.0% vs Oct 23 from 1.5%, and they have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 92% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a new record high in Feb 23. Prices fell in March, rose in Apr/May to a new record, fell in Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell in Sep>Oct.
• Veterinary Services– Prices are +1.0% from Sep and +7.3% from 2023. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +38.5% and since 2021, +28.8%. 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 74.8% 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 +0.4% from Sep and inflation vs last year rose to +3.8% from +3.6%. Medical Services are not a big part of the current surge as only 55.3% of the 13.2%, 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, then rose Jul>Oct. to a new peak of 8.3%. This is up from Sep: 7.3% & Aug: 6.3%. 67.3% 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 +0.2% from Sep and +4.5% from Oct 23. 8 of the last 10 months have been 4.0+%. Inflation has been pretty consistent. Just 58.8% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation fell to 2.0% from 2.1% due to price drops in Products. It is still 62% less than the 22>23 rate and 13.1% less than the U.S. CPI. 2.0% is 35.5% below the 3.1% average rate since 1997. Vs Sep, prices rose 2%, driven by Vet & Services. The biggest Aug>Sep price increase was +0.7% in 2022 but a lift was to be expected. It has occurred in 15 of the last 20 years. A big factor in the small CPI drop was that the Sep>Oct price lift in 23 was a little bigger than 24. 2024 appears to be moving back towards a more normal pattern, but there is still a ways to go.

Now, let’s look at the YTD numbers.

The inflation rate for 22>23 was the highest for 4 of 9 categories – All Pet – Pet Food, Services, Veterinary & Total Pet. The 23>24 rate is usually much lower than 22>23 for all but Medical Services. 21>22 still has the highest rate for Food at Home, the CPI & Pet Supplies. The average annual 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 comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.3% or higher.

• U.S. CPI – The 23>24 rate is 3.0%, the same as September, but it is down 30% from 22>23, 64% less than 21>22 and 29% below the average YOY increase from 2019>2024. However, it’s still 27% more than the average annual increase from 2018>2021. 72% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
• Pet Food – Ytd inflation is 0.5%, down from 0.7% in Sep. and 96% less than the 22>23 rate. Now, it is also 95% lower than 21>22 and 43% below the average rate from 2018>2021. Pet Food has the highest 22>23 rate on the chart and remains in 2^nd place in the 21>24 rates. Deflation in the 1^st 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 1.1%, it is down 81% from 22>23, 90% from 21>22 and 62% from 20>21. Also, it is even 49% lower than the average rate from 2018>20. It is only tied for 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 17%. You can see the impact of supply chain issues on the Grocery category as 71% 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. Inflation in 24 is 0.7% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The only significant increases were 7.5% in 22 & 3.3% in 23. The 2021 deflation created a unusual situation. Prices are up 11.2% from 2019 but 105% of this increase happened from 2021>24. Prices are up 11.8% 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, +7.6%, 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. Ytd it is 2.7%. In a non-pandemic year, “normal” is between 2.1>2.9%. We are still seeing the impact of 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. The 23>24 inflation rate of 6.1% is 2^nd to Veterinary on the chart. It is 8% less than 22>23 but now equal to 21>22. Also, it is 1.9 times higher than the 2018>21 average rate. Pet Services is 2^nd in 19>24 inflation but only 4^th 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. Ytd inflation is 4.5%, which is 13% below its 21 peak, but 30% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
• Total Pet – Ytd Petflation is 2.6%, down from 2.7% Jul>Sep. It is 70% less than 22>23 but 13% higher than the 2018>21 average rate. Plus, YTD it is still 13% below the CPI. Despite the YOY lift in August, Petflation has slowed in 24. This is primarily being driven by drops in Pet Food prices, but Ytd Supplies inflation is also low. Services & Vet prices reached new record highs in October. The mix of patterns has produced stability in the Aug>Oct Ytd Pet CPIs.

The Petflation recovery paused in Aug. then came back in Sep>Oct. At 2.0%, October was 35.5% below the average rate for the month and is again lower than the National CPI. We continue to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 19.8% above 2021 and 24.5% higher than 2019. Those are big lifts. In fact, in October prices for Vet & Services set new records while prices for Total Pet & all other segments are less than 1.4% below the highest in history. Only Supplies prices (+10.0%) are less than 23% 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 evidence of this at both GPE 24 & SZ 24 as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

Veterinary Services is the 2nd largest segment in the Pet Industry. For years, high inflation has been a problem in the segment. Spending grew 24.0% from 2014>2019. Prices rose 17.4%, an avg of 3.3%. This caused a reduction of visit frequency and only 28% of the growth was “real” (avg real growth: +1.3%). In late 2020 & 2021, COVID focused Pet Parents on their “children’s” needs, including Veterinary Services. In 2021 Veterinary Spending reached $32.76 with 87% “real” growth. In 2022 the binge was not repeated so spending dropped -$2.95B (-9.0%) to $29.71B. Inflation was still high in 2023, 9.4%. However, the higher incomes again focused on the needs of their pet children and drove a $5.95B (+20.0%) increase in Veterinary Services spending to a new record high of $35.66B.

In this report, we’ll take a closer look at the demographics behind the 2023 numbers. Note: All 2023 numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Interview Survey, rather than their Diary report. The low frequency of Veterinary Visits is still generating an extremely high variation in Diary data. Interview is a more logical and accurate way to track Veterinary Services Expenditures.

Let’s get started. Veterinary Spending per CU in 2023 was $265.02 up 19.6% from $221.60 in 2022. (Note: A 2023 Pet CU (68%) Spent $389.74. More specifically, the 20.0% increase in Veterinary spending came as a result of:

• 0.3% more CU’s
• Spending 12.5 more $
• …6.3% more often

We’ll take a closer look. But first, the chart below gives an overview of recent Veterinary Spending.

The big drop in the first half of 2015 was tied to the upgrade to Super Premium Foods – Trading $. Then consumers began value shopping for Food and the savings freed up $ for Veterinary Services. Spending began to climb until it flattened out at the beginning of 2017. Inflation slowed in the 2nd half and spending took off. In 2018 prices turned up and consumers held their ground through 2019. The initial COVID reaction in 2020 was a drop in spending but “need focused” consumers then drove a huge increase through 2021. In 2022, inflation grew to 8.8% and spending dropped. Inflation got even higher in 2023, 9.4% but the highest incomes drove a $6.1B lift in the 2^nd half.

Now, let’s look at Veterinary spending by some specific demographics. First, here is a chart by Income Group

Veterinary Spending is even more driven by income. All groups but <$30K & $50>70K spent more in 2023. The biggest lift came from the $150>199K group. +$1.92B. However, all income groups over $70K had an increase over $1B. This caused the 50/50 spending break point in $ to increase significantly from $115K in 2022 to $124K in 2023.

National: $265.02 per CU (+19.6%) – $35.66B – Up $5.95B (+20.0%)

• Over $150K (19.8% of CUs) – $508.69/CU (+18.8%) $13.53B, Up $3.38B (+33.3%) This highest income group is the biggest Veterinary Spender as 19.8% of CUs generated 37.9% of 2023 $ but also 56.8% of the increase from 2022.
• $100>150K (16.6% of CUs) – $368.32/CU (+12.9%) $8.25B, Up $1.47B (+21.7%) Spending by this middle/upper income group slowed in 2019 but took off in 20>21, stabilized in 22 but grew over 20% in 23.
• $70K>100K (14.1% of CUs) – $285.15/CU (+40.5%) $5.40B, Up $1.56B (+40.5%) Steady growth 2016>19. Then $ fell in 2020 due to monetary pressures. 21 had a big lift. High 22 inflation caused a drop, but spending recovered in 23.
• $30K>70K (28.3% of CUs) – $171.26/CU (+13.1%) $6.51B, Up $0.64B (+10.9%) From 2016 to 2020 their pattern was remarkably similar to the big spending $150K+ group. That changed in 2021 as they were the only group to spend less in Vet $ while $150K> had the biggest lift. In 2022>23 the pattern match returned – a drop in 22 & a lift in 23.
• Under $30K (21.3% of CUs) $68.86/CU (-28.5%) $1.97B, Down $1.11B (-35.9%) This group is very price sensitive. After the big spending dip in 2018, they slowly but consistently increased Veterinary spending until the small drop in 2022. In 2023, their spending plummeted, -35.9% – the only drop. Now, their $ are just a little above 2018.

Now, here is Veterinary Spending by Age Group

All groups spent more. 55>64 & 35>44 had the only lifts over $1B. 45>54 was only +0.01B but had the biggest lift in 22.

National: $265.02 per CU (+19.6%) – $35.66B – Up $5.95B (+20.0%)

• <25 (4.5% of CUs) – $181.64/CU (+201.2%) – $1.10B – Up $0.72B (+190.1%) Many combined into group CUs and some got married. Many also added pets so 3.7% less CUs spent 72.4% more $ …74.7% more often.
• 25>34 (15.7% of CUs) – $227.53/CU (+13.3%) – $4.80B – Up $0.60B (+14.3%) The commitment of these Millennials to their pets is growing. Spending was stable 2017>19. The pandemic caused Vet spending to take off In 2020>21. A 22 drop was not unexpected, but they came back strong in 23 as 0.9% more CUs spent 6.8% more $ …6.0% more often
• 35>44 (17.5% of CUs) – $274.97/CU (+22.8%) – $6.49B – Up $1.38B (+27.1%) In 2019, they radically increased their spending and became #1 in Veterinary $. In 2020, unlike most groups, spending dropped. In 21 they had the biggest % increase. In 22 their spending fell but grew $1.4B in 23 as 3.5% more CUs spent 7.0% more $ …14.8% more often.
• 45>54 (16.9% of CUs) – $304.10/CU (+0.05%) – $6.91B – Up $0.01B (+0.2%) This group has the highest income, but value is important. In 2017, the slowed inflation caused them to spend significantly more money. In 2018, prices turned up and continued to inflate in 2019. Spending dropped precipitously to their 2016 level, and they lost #1 spot in Veterinary $. 2020 brought a big spending lift which continued into 2021>22. In 22, They returned to #1 in Vet $. In 23 their spending stabilized as 0.1% more CUs spent 2.8% more $…2.7% less often. They fell from #1 to #2.
• 55>64 (17.8% of CUs) – $346.64/CU (+37.9%) – $8.29B – Up $2.15B (+35.0%) This group was the leader in Veterinary Spending prior to 2015. In 2015 they upgraded to Super Premium Food and Vet Spending fell. In 2016 inflation slowed and they regained the top spot. In 2018 Veterinary prices began to strongly inflate again. Their spending fell and continued down into 2019. In 2020 they moved back to the top in Veterinary Spending. They stayed there with the biggest lift in 2021. In 2022 their spending binge ended and inflation soared to 8.8% so they fell to #2. In 2023 inflation was 9.4% but 2.1% less CUs spent 24.8% more $, 10.5% more often. Their $2B lift pushed them back to #1.
• 65>74 (16.0% of CUs) – $253.66/CU (+17.0%) – $5.47B – Up $0.76B (+16.2%) This group is all Boomers, so they are committed to their pets. They had consistent annual growth from 2018>2021. In 2022 they had a small dip but in 23 they came back as 0.7% less CUs spent 27.6% more $, 8.3% less often. It appears that inflation now matters less.
• 75> (11.6% of CUs) – $166.45/CU (+11.4%) – $2.59B – Up $0.32B (+13.9%) This group of oldest Pet Parents has a strong commitment to their pets. In 2015, they had a $1B increase in Veterinary Spending. In 2016 & 2017, they focused on Food, Supplies and Services. In 2018, they turned their attention back to Veterinary. However, their spending has slowly but consistently grown every year since 2015 – the only group to accomplish this. In 2023 2.2% more CUs spent 5.1% less $ …17.5% more often. This produced an 13.9% increase in spending.

Now, let’s take a look at some other key demographic “movers” behind the 2023 Veterinary Spending numbers.

Veterinary spending rose by $5.95B (+20.0%) in 2023. With a high 9.4% inflation rate, the real lift in the amount of Veterinary services bought was only 9.7% (Real: 48.5%). 79 of 96 demographic segments, 82.3% spent more on Veterinary Services in 2023 than in 2022, a big change from last year when 77.1% of segments spent less. BTW – Considering inflation, only 67.7% “really” spent more in 2023. There was still turmoil as 12 of 24 flipped from first to last or vice versa while only 1 segment maintained its position from 2022. 7 of the flips were from last to 1st. We should also note that there were 4 categories in which all segments spent more. In 2022 in 3 categories, all spent less.

All of the “winners” are often found at the top. There were no true surprises. They have a common trait – higher income

In the “losing” group, most were expected. There were 3 that were somewhat surprising.

    ∙ 45>54 yr olds (had the smallest increase after the biggest lift in 2022)  ∙ 4 People   ∙ Married, Oldest Child 18>              

This group is surprising because they have higher incomes. The other “losers” all have below average incomes.

Despite the $3.09B drop from 2021 to mid-yr 2023, Veterinary spending has increased +$14.95B (72.2%) from mid-yr 2020 through 2023. In Veterinary spending, inflation is always a factor. It has traditionally been high but 87% of the 2020>21 growth was real. However, prices rose 8.8% in 2022 and 9.4% in 2023 for a 2021>23 inflation rate of 19.1%. That means that the 9.2% 2021>23 spending lift was really an -8.4% drop in the amount of Veterinary Services sold. High inflation is still a big problem in the Veterinary segment.

The 2022 decrease was widespread across Income and Age groups as all income groups spent less and only 2 age groups spent more. The drop was also widespread as 77% of all segments spent less including 3 categories – Housing, Area and CU Size, where all segments had decreased Veterinary Services spending. The 2023 $5.95B (20.0%) lift had the opposite pattern as 82% of demographics spent more and 4 categories had no segments with a spending decrease – Region, Area Type, Housing and Age Range.

Prior to 2020 there was a youth movement in Veterinary Spending from <45. That changed in 2020 as 45> accounted for 94% of the $3B increase. In 2020, 2021 & 2023 the 55>64 yr-olds were on top. In 2022 it was the 45>54 yr-olds. The $ are skewing older but have also become a little more balanced from 25>74. Although Veterinary services are needed by all Pet Parents, higher income is by far the biggest driver in spending. This is best illustrated by comparing 2023 segment performance (Share of $/Share of CUs): <$30K: 26.0%; $30>69K: 64.6%; $70K>99K: 107.6%; $100>149K: 139.0%; $150>199K: 179.5%; $200K>: 201.0%. Yes, Vet Services are needed by all but are becoming less affordable for many.