Information by segment as defined by USBLS

2021 Pet Services Spending was $9.10B – Where did it come from…?

Next, we will look at Pet Services. It is still by far the smallest Segment, but like Supplies and Veterinary, it too had a record increase in 2021, up $2.21B (+32.0%). After the great recession, Services’ annual spending slowly but steadily increased. During this time, the number of outlets offering Services strongly grew as brick ‘n mortar retailers looked for a way to combat the growing influence of online outlets. After all, you can certainly buy products, but you can’t get your dog groomed on the Internet. This created a highly price competitive market for Pet Services. In 2017 there was a slight increase in visit frequency, but Pet Parents just paid less. This resulted in a 1.0% decrease in Services spending. In 2018 consumer behavior changed as a significant number decided to take advantage of the increased availability and convenience of Pet Services and spending literally took off, +$1.95B (+28.9%), by far the biggest increase in history. In 2019 Pet Parents, especially the younger ones, value shopped, and spending turned down $0.10B. In the 2020 pandemic Services outlets were often deemed nonessential and were subject to restrictions and closures which drove a huge drop in $. In 2021 things opened up again and Pet Parents came back to Services generating the biggest $ increase ever.

The Pandemic had a radically different impact depending on whether a segment was necessary or discretionary. Services  spending is arguably the most discretionary of any Pet Expenditure. Let’s look deeper into 2021 spending demographics.

Let’s start by identifying the groups most responsible for the bulk of Services spending in 2021 and the $2.21B increase. The first chart details the biggest Pet Services spenders for each of 10 demographic categories. It shows their share of CU’s, share of Services spending and their spending performance (Share of spending/share of CU’s). In order to better target the bulk of the spending we had to alter the groups in two categories – income and area. The performance level should also be noted as 7 of 10 groups have a performance level above 120%, equaling their previous high set in 2018. This is the most for any segment – 6 for Supplies and Veterinary and only 5 for Food and Total Pet. Last year they had only 5 over 120%. This indicates that the disparity between the best and worst performing segments grew in 2021. Income is still the biggest factor in Services Spending and its importance is growing. The categories are presented in the order that reflects their share of Total Pet $ which highlights the differences of the 8 matching groups. For Services, the share ranking differences from Total Pet are small. Married Couples replaced 35>64 at the bottom.

  1. Race/Ethnic – White, not Hispanic (84.6%) down from 87.9%. This big group accounts for the vast majority of spending in every segment. Services Spending became slightly more diverse in terms of race and ethnicity in 2021 as their performance decreased from 128.5% to 125.9% and they fell from 4th to 5th place in terms of importance.
  2. # in CU – 2+ people (82.2%) up from 78.3% The share for 2+ CU’s is over 79% for all segments and Services is 2nd to Supplies’ 83.3%. Their performance also increased from 111.6% to 118.3% but they stayed in 8th place in importance. All sizes spent more, with the biggest lift, +$1.3B from 2 Person CUs. Singles were only up $0.12B, +28%.
  3. Housing – Homeowners (80.5%) up from 78.3%. Homeownership is a big factor in spending in all industry segments. The Homeowners’ share of Services grew and Supplies replaced them at the bottom. Their performance grew from 119.3% to 124.5% and they rejoined the 120+% club at #6. Those w/Mtges led the way, up $1.4B, +36.4%.
  4. Area – City/Suburbs >2500 (80.3%) down from 83.3% in share, and performance fell from 102.7% to 98.1%, the only big group not earning its share of $pending. Services is an Urban Segment. All Areas spent more but Center City had only a small increase which drove down the group’s share and performance.
  5. Income – $100K> (63.3%) up from 57.2% This group’s performance rating is 211.4%, up from 201.0%. CU income is still by far the most important factor in increased Pet Services Spending. Only the $40>49K income group spent less, -$0.14B. However, the spending increase was strongly skewed towards higher incomes. The over $100K group has 30.0% of all CUs but generated 82.4% of the $2.21B lift in $pending.
  6. # Earners – “Everyone Works” (72.8%) up from (69.9%) All adults in the CU are employed. Income is important so a high market share is expected. Their performance grew to 128.3% from 122.0% and they moved up to #4 from #5 in importance. Only No Earner, Single CUs spent less. Households with 2+ Earners account for 39.3% of all CUs but they generated 73.8% of the increase. Retirees are important to Services but overall, more workers = more $.
  7. Education – College Grads (71.7%) up from 68.5%. Income generally increases with education so Services spending grows with increasing education. College Grads spend the most so they were hit hardest by the pandemic and then had the strongest recovery. Performance grew from 146.6% to 151.5% and education stayed #2 in importance.
  8. Occupation– All Wage & Salaried (67.6%) up from 66.8% and their performance rating increased from 108.7% to 114.0%. – Only Operators/Fabricators/Laborers spent less on Services. Managers & Professionals had the biggest increase, +$1.02B (+36.5%). Most Occupational segments had an increase in the 25>40% range. The exception was Self-Employed, only +12%. This drove the increase in share and performance for the big group. Services spending became a little more balanced among Salaried/Wage Workers but a little less balanced in terms of Occupation.
  9. CU Composition – Married Couples (63.3%) up from 62.8%. Married couples are a big share of $ and have 128+% performance in all segments. Their performance increased to 133.6% from 129.4% and they stayed in 3rd place in terms of importance to Services spending. Only Married, Oldest Child <6 spent less. The biggest $ increase came from Married Couple Only, +$0.81B but the biggest % lift was in Unmarried, 2+ Person, All Adult CUs, +66.7%.
  10. Age – 35>64 (63.9%) up from 62.5%. Their performance grew from 117.1% to 122.0% and they entered the 120+% club at #7. Only 45>54 spent less, -$0.02B. All other groups had double digit % increases. The 35>44 group led the way, up $0.78B (+61.3%) but they were closely followed by 55>64, +$0.75B (+56.3%).

We changed 2 of the groups for Services – Income and Area, to better target the biggest spenders. We should also note that Income is still more important to spending in Services than in any other segment. Except for Race/Ethnic and Area, the big groups gained in share and performance. Also, Services now has 7 groups performing at 120+%, the most of any segment. Overall, in 2021 Services spending became slightly less demographically balanced.

Now, we’ll look at 2021’s best and worst performing Pet Services spending segments in each category.

Except for Area the best & worst performers are not a surprise. There are 10 that are different from 2020, 4 of the best and 6 of the worst, 3 more than last year. Area shows an unusual move away from high population. The high income Gen Xers stayed on top, but spending shifted towards their younger members, 35>44. However, it wasn’t a total youth movement. The youngest groups replaced the oldest at the bottom. Changes from 2020 are “boxed”. We should note:

  • Income is even more important to Pet Services. The $200K> group has its best performance in this segment.
  • # Earners – 2 Earners replaced 3 Earners and No Earner, Singles replaced No Earner, 2+ CUs. No Surprises.
  • Generation – Gen X retained Top Spot and the youngest group, Gen Z replaced the oldest, born before 1946 at the bottom. Boomers also earned their share with 102.8% performance and Millennials were close at 97.8%.
  • Age – 35>44 is mostly Gen X and the 2nd highest income group. All groups from 35>64 performed at 100+%. The lowest performers were at both ends of the age spectrum with <25 replacing 75> at the bottom.
  • Area – Two Surprises. The <2500 Area flipped from Last to First. Services $ are skewed towards population density. The big Suburbs 2500> are the normal winners but Center City also usually performs above 100%.
  • Region – The usual Winner but Northeast performance was also strong, 111.8%. The biggest change was the huge difference between 1st and Last. Normally, regional performance is more balanced with all performing above 88%.
  • CU Size – 2 Person CUs edged out last year’s winner, 4 People and returned to the top spot. Only Singles performed below 100% and they returned to their usual spot at the bottom.

In Pet Services spending performance, income is still the major factor. Spending began skewing younger in 2018. They slipped a little in 2019 but they basically held their ground during the 2020 pandemic. In 2021, Boomers, Millennials and the younger Gen Xers all got on board to drive the record rebound in Supplies Spending.

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

In this chart you immediately see the difference from last year. In 2020 there were 3 categories in which all segments spent less on Services. In 2021 there were 5 where all segments spent more. The changes by the winners were also radically larger than the losers. The tumult of 2020 continued but it was all positive. There were no repeats and 9  segments switched from last to first. 3 segments flipped from 1st to last but they all had spending increases. In fact, 90% of 96 demographic segments spent more on Services. Here are the specifics:

  • Race/Ethnic – Last year’s big loser, White, Not Hispanic, flipped to the top.
    • Winner – White, Not Hispanic – Services: $7.70B; Up $1.64B (+27.1%)                             2020: Hispanic
    • Loser – Asian – Services: $0.21B; Up $0.06B (+43.5%)                                                           2020: White, Not Hispanic
    • Comment– All groups spent more. Hispanics finished 2nd , up $0.36B (+69.8%).
  • # Earners– 2 Earners went from last to first.
    • Winner – 2 Earners – Pet Services Spending: $4.26B; Up $1.40B (+49.0%)                       2020: 3+ Earners
    • Loser – No Earner, Single – Pet Services Spending: $0.43B; Down $0.05B (-9.6%)          2020: 2 Earners
    • Comment – Only No Earner, Singles spent less, but No Earner, 2+ CUs doubled their spending, +100.7%.
  • Housing – Both winner and loser flipped back to their “usual” positions.
    • Winner – Homeowner w/Mtge – Services: $5.18B; Up $1.38B (+36.4%)                             2020: Renter
    • Loser – Renter – Services: $1.77B; Up $0.29B (+19.7%)                                                           2020: Homeowner w/Mtge
    • Comment – All spent more as Homeowners w/o Mtges had a 33.1% increase.
  • # in CU – The winner flipped from last place in 2020 but the loser is new.
    • Winner – 2 People – Pet Services Spending: $3.75B; Up $1.26B (+50.8%)                    2020: 4 People
    • Loser – 3 People – Pet Services Spending: $1.31B; Up $0.08B (+6.4%)                          2020: 2 People
    • Comment: All segments spent more. The 2 person lift was primarily driven by the Married Couple Only segment.
  • Education – Advanced College Degree flipped from last to 1st, back to their normal spot.
    • Winner – Adv. College Degree – Pet Services Spending: $3.45B; Up $1.20B (+53.3%)    2020: HS Grads
    • Loser – <HS Grads – Services Spending: $0.14B; Down $0.02B (-13.2%)                            2020: Adv. College Degree
    • Comment – Only those without a HS Diploma spent less but College Grads drove the lift. They have 47.4% of CUs but they provided 81.9% of the Services spending increase.
  • Income – Both winner and loser are new.
    • Winner – $200K> – Pet Services Spending: $2.58B; Up $1.02B (+65.5%)                            2020: $50>69K
    • Loser – $40 to $49K – Pet Services Spending: $0.28B; Down $0.06B (-18.7%)                    2020: $100 to $149K
    • Comment – No surprises. The $40>49K group had the only spending decrease. Lower income groups normally occupy this position. The $200K> group makes the most $ and in 2021 they used some of those $ for Services.
  • Occupation – Mgrs & Professionals flipped from last back to their usual position on top.
    • Winner–– Mgrs & Professionals – Pet Services Spending: $3.81B; Up $1.02B (+36.5%)        2020: Self-Employed
    • Loser – Operators & Laborers – Pet Services Spending: $0.18B; Down $0.02B (-12.1%)       2020: Mgrs & Profess.
    • Comment – Only Operators/Laborers spent less. Retirees also had a good year, up $0.41B (+43.5%).
  • Region – The South flipped from 1st to last.
    • Winner – West – Pet Services Spending: $2.96B; Up $0.96B (+48.2%)                                    2020: South
    • Loser – South – Pet Services Spending: $2.73B; Up $0.08B (+3.0%)                                         2020: Midwest
    • Comment – In 2020 all Regions spent less. In 2021 all Regions spent more – a major turnaround.
  • Area Type – Both the winner and loser flipped positions. All areas spent more.
    • Winner – Suburbs 2500> – Pet Services Spending: $4.24B; Up $0.91B (+27.3%)                 2020: Areas <2500
    • Loser – Areas <2500 – Pet Services Spending: $1.79B; Up $0.65B (+56.3%)                         2020: Suburbs 2500>
    • Comment – Two straight years with Center City not either winning or losing – surprising!
  • Generation – Boomers flipped from last to first. No Food binge in 2021, so they spent more in other segments.
    • Winner – Baby Boomers – Services: $3.06B; Up $0.86B (+39.5%)                                         2020: Gen Z
    • Loser – Born <1946 – Services: $0.35B; Down $0.07B (-16.4%)                                               2020: Baby Boomers
    • Comment – Last year only Gen Z spent more. In 2021 they spent less along with those born <1946. Boomers had the biggest increase but both Gen X and Millennials spent $0.7B+ more.
  • CU Composition – Married, Couple Only flipped from last to first.
    • Winner – Married, Couple Only – Services: $2.61B; Up $0.81B (+44.9%)                        2020: Married, Oldest Child 6>17
    • Loser – Married, Oldest Child <6 – Services: $0.29B; Down $0.02B (-7.9%)                    2020: Married, Couple Only
    • Comment – Only Married, Oldest Child <6 spent less. Married, Couple Only won, but Married, Oldest Child 6>17 was +$0.47B and 2+ Unmarried, All Adult CUs spent $0.59B more.
  • Age – Both winner and loser are new.
    • Winner – 35>44 yrs – Pet Services Spending: $2.05B; Up $0.78B (+61.3%)                              2020: <25 yrs
    • Loser – 45>54 yrs – Pet Services Spending: $1.68B; Down $0.02B (-1.2%)                               2020: 75+ yrs
    • Comment: In 2020, all age groups spent less on Services. In 2021, only the high income 45>54 yr-olds spent less. The 55>64 yr-olds finished a close 2nd to 35>44 with a $0.75B (+56.3%) increase. Together, these 2 groups generated 69.2% of the $2.21B increase in Services Spending.

We’ve seen the winners and losers in terms of change in Services Spending $ for 12 Demographic Categories. The lift set a record and was widespread. Here’s some data which shows the evolution from 2018 to 2021 as Services worked their way back up and even exceeded their last peak in 2018. You see the difference between the big down & up swings.

Total Spending:       2018: $8.72B       2019: $8.62B       2020: $6.89B       2021: $9.10B

% Segments w/↑$:  2018: 88%            2019: 49%            2020: 21%            2021: 90%

Avg Biggest $:        2018: $1.04B       2019: $0.25B       2020: $0.05B       2021: $1.10B

Avg Biggest $:        2018:-$0.02B      2019: -$0.27B      2020: -$0.89B      2021: $0.07B

We found the winners in performance and $, but there were others who performed well but didn’t win. They deserve….

Honorable Mention

A big change from the 2020 chart. This year the worst performer was +42.9%. Last year’s worst was +0.9%. 5 People CUs had the 2nd biggest increase but they more than doubled their Services Spending. Services $ usually follows income $ but the low income No Earner, 2+ CUs also doubled their spending. The West was the leader in the lift and performance, but the Northeast was a strong second in both, including a performance level of 111%. Married Couples led the way, but kids were a little less important. Unmarried, 2+ All Adult CUs had a bigger increase than all Married, w/kids CUs combined. No Food Binge for 55>64. They spent more in other Segments, including Services. Gen X won the awards, but Millennials also were strong. Their 2020>21 increase matched their previous biggest lift in 2017>18. In 2021, 90% of all segments increased Services spending. That means that we could have added many more to this honored group.

Summary

For years, Services’ spending slowly but steadily increased. However, the number of outlets offering Services was radically increasing. In 2017, this competitive pressure caused Pet Parents to shop for value and spending fell 1%. In 2018, the abundance of outlets and competitive prices finally had their intended impact. Many more consumers took advantage of the convenience of Pet Services and spending literally took off with a record increase to a new all-time spending high. In 2019 Consumers held their ground at the new higher level but we saw turmoil similar to 2017. Again, value shopping likely contributed to the small decrease.

In 2020 pandemic Services outlets were often deemed nonessential so they were subject to restrictions and closures. Services are definitely needed by some groups. However, for most demographics, Services are a convenience and spending is very discretionary in nature. The reduced availability and the pandemic driven focus on the “needed” segments – Food and Veterinary caused a 20% drop in Services $.

In 2021 the Retail Marketplace opened up again and many Pet Parents strongly returned to their previous Services mantra, “I need help with my Pet “children” and I have the money to pay for it!”. This behavior was widespread as 90% of all demographics spent more on Services. This produced a record $2.21B increase and Services spending exceeded $9B for the first time.  While the lift was widespread, unfortunately, the spending disparity increased. Performance differences are a key measurement of disparity. Let’s consider the performance of the big groups. There were 7 categories with a 120+% performing big group, up 2 from 2020, the most of any segment – Food (5), Supplies & Veterinary (6). This clearly indicates more disparity in Services Spending.

  • Income   · Higher Education     · CU Composition    · # Earners    · Race/Ethnic   · Housing    · Age

The Housing category returned to the 120+% Club and Age was added. Gen X and Boomers are still the top 2 spenders and the younger members of these groups drove the increase. Income remains the key factor in Services spending. The best performing segments and those with the biggest increase almost without exception rank 1st or 2nd in income.

Services were hit the hardest by the pandemic in 2020 but they had a record, widespread recovery in 2021. They are the segment most driven by high income so inflation has less of an impact. We’ll see if the record price increases in 2022 negatively affect Services Spending.

At Last – The “Ultimate” Pet Services Spending Consumer Unit consists of 4 people – a married couple with 2 kids. The oldest child is 6>17. They are 35>44 yrs-old and White, but not of Hispanic origin. They both work and at least one of them has an Advanced College Degree and is a Manager or Professional. They have an income of over $200K. They live in a small suburb of a metropolitan area of 2.5>5 MM in the Western U.S. and are still paying off their home mortgage.

2021 Pet Supplies Spending was $23.81B – Where did it come from…?

Next, we’ll turn our attention to Pets and Supplies. We’ll see definite differences from Pet Food as the spending in the Supplies segment is more discretionary. There are other factors too. Spending can be affected by the spending behavior in other segments as consumers often trade $ between segments. However, the biggest factor is price. Many categories have become commoditized so pricing changes can strongly impact Consumers’ buying behavior. In the 2nd half of 2016, deflation began, and Supplies started a 24 month spending lift, totaling $5B. Prices turned up in mid-2018 due to new tariffs and Supplies $ fell a record -$3B in 2019. In the 2020 pandemic, Supplies weren’t a necessity, so sales continued to drop, -$1.7B. In 2021, Pet Parents caught up with their children’s needs and Supplies spending exploded, +$8.65B.

Let’s see which groups were most responsible for the bulk of Pet Supplies spending in 2021 and the $8.65B increase. The first chart details the biggest pet supplies spenders for each of 10 demographic categories. It shows their share of CU’s, share of Supplies spending and their spending performance (Share of spending/share of CU’s). All groups are the same as Total Pet so its skewed younger than Food. The categories are presented in the order that reflects their share of Total Pet Spending. This highlights the differences in importance. All 10 of the groups have over a 60% market share. The big difference is in performance. There are 6 groups with performance over 120%. That’s one more than Total Pet and Pet Food. However, 9 of 10 groups have performance of 117.8% or higher. That’s the most of any segment and indicates that Supplies spending became less balanced in 2021.

  1. Race/Ethnic – White, not Hispanic (83.2%) down from 83.3%. This large group accounts for the vast majority of spending in every segment. Their share remained essentially stable and their performance grew from 121.8% to 123.9% but they fell from #4 t0 #6 in importance in Supplies Spending. Minority groups account for 32.8% of all CUs but spend only 16.8% of Supplies $. This is actually their biggest share of any segment. All groups spent more. Most of the increase came from Whites but Asians and Hispanics had the biggest % increases.
  2. # in CU – 2+ people (83.3%) up from 79.5%. Their performance increased to 119.8%, from 113.3%. All CU sizes, including singles had double digit percentage increases. 2 Person CU’s had the biggest $ increase, +$2.91B but 5+ and 4 person CUs had the highest percentage increase and led in performance.
  3. Housing – Homeowners (76.9%) down from 77.7%. Homeownership is a big factor in pet ownership and spending in all segments. Their share of Supplies $ fell but their performance grew slightly to 118.9%, from 118.0% due to a 1% drop in homeowner’s share of CUs. They also fell from 6th to 8th place in terms of importance for increased Supplies spending. Homeowners with and without a mortgage and renters all spent at least 46% more on Supplies in 2021.
  4. Area – Suburban & Rural (76.0%) up from 67.1%. This was a spectacular gain in share and their performance grew to 117.8%, from 106.4% in 2020. The big Suburbs, over 2500 population led the way with a $5.99B, +90.8% increase but all areas, including Center City had double digit percentage increases.
  5. Income Over $70K (68.4%) up from (61.1%) Another big gain in share and their Performance also grew from 140.5%, to 152.7%. Income remains the most important factor in increased Pet Supplies Spending and got even stronger in 2021. After a 24% increase in 2020, the $40>49K group was the only Income segment to spend less on Supplies in 2021. The highest income group, $200K> led the way with a $4B, +165.9% increase. However, all segments but $40>49K spent at least 32% more on Supplies in 2021. Of Note: All incomes over $100K perform above 100%.
  6. # Earners – “Everyone Works” (73.4%) up from 72.8%. Their performance grew from 127.0% to 129.5% but they fell from #2 to #4 in importance. In this group, all adults in the CU are employed. The # Earners is more important than in Food but it is income that truly matters. All earner/no earner CUs spent more but 2 Earners led the way, +$5.2B. Only CUs with 2 or more earners perform above 100%.
  7. Education – College Grads (68.3%) up from 56.7%. Higher Education lost market share in 2020 but they got it back in 2021. Their performance level also radically increased from 121.4% to 144.3% and they took over the #2 spot in importance. The only decrease came from those without a High School Diploma. However, College Grads led the way with a $7.7B lift, 89% of the increase for the entire segment. A College Degree generally leads to a higher income and as we have seen, higher income matters a lot in Supplies spending.
  8. Occupation – All Wage & Salary Earners (60.9%) down from 68.0%. The performance of this group was 102.6%, down from 110.7%. All occupations and Retirees spent more. The big drop in share and performance happened because 50% of the total $ increase came from CUs without a regular wage/salaried worker.
  9. CU Composition – Married Couples (62.0%) up from 60.0%. Their performance also increased from 123.7% to 130.8% and they stayed 3rd in importance. All types of CU Composition spent more on Supplies. Married Couples with the oldest child 6>17 led the way with a $3.53B increase but the $8.65 spending lift was pretty equally divided between CUs with children, +$4.4B and those with no children, +$4.25B.
  10. Age – 35>64 (66.3%) up from 60.7%. A big lift from the 55>64 yr-olds caused spending to skew slightly older in 2021 so 35>64 replaced 25>54. The new group’s performance level increased to 126.6% from 113.9% but the age category dropped from #4 to #5 in importance. The <25 Gen Zers spent -$0.03B less but all other age groups had at least a 25% increase. The 35>44 group led the way with a $4B lift that more than doubled their Supplies spending,

Pet Supplies spending skews younger than Food. Spending decreased in the pandemic as consumers focused on needs rather than the more discretionary Supplies. That ended in 2021 as Pet Parents caught up with the many Pet Supplies purchases that had been “put off” for a year or more. However, the increase from 5 to 6 groups with 120+% performance, with 9 over 117.8% indicates increased spending disparity between segments.

Now, we’ll look at 2021’s best and worst performing Pet Supplies spending segments in each category.

Almost all of the best and worst performers are those that we would expect. In Pet Supplies spending, there are only 4 that are different from 2020. That is 1 less than Veterinary, 6 less than Total Pet & Services and 11 less than Pet Food. Supplies has the lowest number of total changes and by far the fewest new winners. As we move deeper into the data, we will see even more differences between the Industry Segments. Changes from 2020 are “boxed”. We should note:

  • Income matters in Supplies spending.
    • The $200K> was group the top performer in all industry segments but Food, where $150>199K won. However, in Supplies their performance was double that of 2nd place ($150>199K), the biggest gap for any segment.
  • # Earners – 2 Earners replaced 3 Earners at the top but again, only these 2 groups performed above 100%.
  • Age – Last year 45>54 edged out 35>54 for the win. This year they traded places but the 35>44 yr-olds won by over 70%. Both are mostly Gen Xers which is further proof that Gen Xers “rule” in Supplies spending.
  • Region – The West won again but 2 regions performed over 100%. The South returned to its usual spot at the bottom. However, the performance disparity from 1st to last grew from under 20% in 2020 to over 100% in 2021.
  • CU Composition – Singles replaced Single Parents at the Bottom. The 2020 winner held their spot. However, in 2021 they were the only Married w/children segment to perform over 100%. Last year they all did.

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

In 2019, Tarifflation caused a record $2.98B drop in Supplies spending. 2020 brought the pandemic and pet parents focused on “needs” so the more discretionary Supplies segment fell another $1.65B. In 2021 Pet Parents turned their attention to the multitude of Supplies needed by their “children” and spent a record $8.65B more. In the chart, there are 5 repeats from 2020 – 4 winners and 1 loser. Also, 5 segments switched from last to first and 1 flipped from 1st to last. This is more turmoil than in 2020 when there were 7 repeats but only 2 “flips”. However, the 2021 turmoil was very positive. In 2020 all segments in the Region category spent less. In 2021, all segments in 9 of 12 categories spent more. The record lift in 2021 more than made up for 2 straight years of decreases. Here are the specifics:

  • Race/Ethnic – White, Not Hispanic flipped from last to 1st but all racial/ethnic groups spent more.
    • Winner – White, Not Hispanic – Supplies: $19.81B; Up +$7.19B (+56.9%)                             2020: Asian Americans
    • Loser – African Americans – Supplies: $0.75B; Up $0.02B (+3.4%)                                          2020: White, Not Hispanic
    • Comment – Although their share of Pet Supplies $ has fallen from 86.3% in 2018 to 83.2% in 2021, White, Not Hispanics still drive this discretionary segment. They have the highest % of pet ownership and the second highest income. The interaction of these two factors is very clear in the Racial/Ethnic category. Whites had the most to lose and they did in 2020. They also had the most to gain in 2021 and they did that too, +$7.2B.
  • Area Type– After 2 years at the bottom, the Big Suburbs flipped from last to 1st, but all areas spent more.
    • Winner – Suburbs 2500> – Pet Supplies Spending: $12.58B; Up +$5.99B (+90.8%)                2020: Areas <2500
    • Loser – Center City – Pet Supplies Spending: $5.72B; Up $0.73B (+14.6%)                                2020: Suburbs 2500>
    • Comment– In Supplies spending, more space meant more $ as areas under 2500 pop finished 2nd, +$1.9B (+54%).
  • Region – The West flipped from last to first.
    • Winner – West – Pet Supplies Spending: $9.38B; Up $5.49B (+140.8%)                                     2020: Midwest
    • Loser – Northeast – Pet Supplies Spending: $3.60B; Up $0.96B (+36.2%)                                 2020: West
    • Comment – In 2018, all regions spent more on Supplies. In 2019 and again in 2020 all Regions spent less. Supplies was the only industry segment that was all negative in both years. 2021 brought a big turnaround, as like 2018, all Regions spent more. The West led the way but with “rounding”, the other regions all had $1+B increases.
  • # Earners – 2 Earners won with another last to 1st flip, but all segments spent more.
    • Winner – 2 Earners – Pet Supplies Spending: $11.77B; Up +$5.18B (+78.7%)                          2020: 1 Earner, Single
    • Loser – No Earner, Single – Pet Supplies Spending: $1.17B; Up $0.44B (+60.1%)                    2020: 2 Earners
    • Comment – Income is a big factor and the # of Earners is important in Supplies Spending. 2 Earner CUs had by far the biggest increase and Everyone Works CUs generated 75% of the spending lift. However, the increase was widespread as CUs with No Earners increased their Supplies spending by 68.3%.
  • Housing – The winner and loser held their position from 2020 as all segments spent more in 2021.
    • Winner – Homeowner w/Mtge – Supplies: $13.32B; Up +$4.97B (+59.6%)                             2020: Homeowner w/Mtge
    • Loser – Homeowner w/o Mtge – Supplies: $4.99B; Up $1.57B (+45.7%)                                 2020: Homeowner w/o Mtge
    • Comment – You’re in a good position when the “loser” had an increase of 45.7%. Homeowners w/Mtge supplied most of the $ but Renters actually had the biggest percentage increase, +62.2%.
  • Education – Advanced College Degrees held their expected spot at the top.
    • Winner – Advanced College Degree – Supp. Spending: $8.84B; Up +$4.76B (+116.7%)          2020: Adv College Degree
    • Loser – <HS Grad – Supplies Spending: $0.46B; Down $0.29B (-38.3%)                                       2020: BA/BS Degree
    • Comment – The spending flowed just as expected with those without a High School Diploma having the only decrease and those with a College Degree providing $7.7B (88.7%) of the total increase.
  • Income – The low income $40>49K flipped from 1st to last
    • Winner – $200K> – Pet Supplies Spending: $6.41B; Up +$4.00B (+165.9%)                              2020: $40>49K
    • Loser – $40>49K – Pet Supplies Spending: $1.01B; Down -$0.26B (-20.6%)                             2020: $70>99K
    • Comment – Last year’s winner, $40>49K had the only decrease in spending and the $200K> group moved to the top where they belong. Income does matter a lot in Supplies Spending. The $200K group led with a $4B increase. However, CUs $100K> (30%) provided 71% of the lift and were the only segments that performed at 100+%.
  • Age – The winner and loser were both new.
    • Winner – 35>44 yrs – Pet Supplies Spending: $7.17B; Up $4.00B (+126.3%)                            2020: 25>34 yrs
    • Loser – <25 yrs – Pet Supplies Spending: $0.53B; Down -$0.03B (-5.1%)                                  2020: 55>64 yrs
    • Comment: Only <25 spent less. The 55>64 yr-olds finished a surprising 2nd with a $1.7B, +63% increase.
  • Generation – No flips/repeats. After 3 consecutive years of winning, Millennials were replaced at the top by Gen X.
    • Winner – Gen X – Supplies: $9.40B; Up +$3.91B (+71.2%)                                                          2020: Millennials
    • Loser – Gen Z – Supplies: $0.50B; Up $0.10B (+25.4%)                                                                2020: Baby Boomers
    • Comment – All generations spent more. Baby Boomers, +$2.31B and Millennials, +$2.30B essentially finished in a tie for 2nd The Silent Generation (Born <1946) then came in a distant 4th, +$0.13B.
  • CU Composition – Married, Oldest Child 6>17 held on to the top spot.
    • Winner – Married, Oldest Child 6>17 – Supplies: $5.89B; Up $3.53B (+149.4%)                       2020: Married, Oldest Child 6>17
    • Loser – Married, + Other Adults – Supplies: $0.93B; Up $0.14B (+17.7%)                                   2020: Married, Couple Only
    • Comment – All CU types – with or without children spent more. CUs with children (27.1%) accounted for $4.4B, 50.9% of the increase while CUs without children (62.9%) accounted for $4.2B, 49.1%.
  • # in CU – 2 People flipped from last to 1st but all sizes spent more than in 2020.
    • Winner – 2 People – Pet Supplies Spending: $8.34B; Up $2.91B (+53.6%)                                  2020: 5+ People
    • Loser – 3 People – Pet Supplies Spending: $3.27B; Up $0.87B (+36.3%)                                      2020: 2 People
    • Comment: 5+ CUs finished 2nd +$2.37B, +117%. They more than doubled Supplies spending and are the only segment with increases in 2020 & 2021. 3 People finished last in $ but Singles had the lowest % increase, +28%.
  • Occupation – Managers & Professionals held their spot at the top.
    • Winner – Managers & Professionals – Supplies Spending: $7.79B; Up +$2.13B (+37.7%)           2020: Mgrs/Profess.
    • Loser – Operators & Laborers – Supplies Spending: $0.64B; Up $0.15B (+30.7%)                         2020: Retired
    • Comment – Only Managers & Professionals and Self-Employed spent more in both 2020 & 2021. In 2021 all Occupations, including Retirees, spent more on Supplies.

We’ve now seen the winners and losers in Pet Supplies Spending $ for 12 Demographic Categories. In 2020, only 18 of 96 segments spent more and 1 category had no segments with an increase. In 2021, 93 segments spent more, and 9 categories had no segments that spent less. In performance, there were no surprise winners and 10 of 12 were the same as 2020. All of the winners were either 1st or 2nd in CU income for segments in their category, which reflects the importance of income in Supplies spending. However, not every good performer can be “the” winner and some of these “hidden” segments should be recognized for their performance. They don’t win an award, but they deserve…

Honorable Mention

In 2019, all numbers from these segments were negative. In 2020, 5 were positive. Now, in the spectacular 2021, the worst performer was up over 53%. Some are unexpected and again it is an eclectic mix. Asian Americans have a high income but a low percentage of households with pets. They doubled the $ spent on Supplies. Supplies $ are usually tied to Marriage & Kids but Unmarried Adult 2+ CUs spent $1.6B more. Supplies spending has increasingly skewed younger but 2021 was a strong year for 55>64, mostly young Boomers. Homeowners “rule” Supplies spending but Renters spent over $2B more in 2021. 2020 was the year of “bosses”, but 2021 brought a widespread lift. This included a $1.3B lift from lower-level White Collar workers, Tech/Sls/Clerical. Gen X was the leader in 2021 Pet Spending, but Millennials are still a major player, especially in Supplies where they had a $2.2B, 53% increase. 2021 was arguably the best year in history for the Supplies Segment. We have selected these 6 segments for Honorable Mention but 93 of 96 demographic segments spent more on Supplies in 2021. This group probably should have a lot more members.

Summary

While Pet Food spending has shown a definite pattern, Pet Supplies have been on a roller coaster ride since 2009. Many Supplies categories have become commoditized and react strongly to changes in the CPI. Prices go up and spending goes down…and vice versa. Supplies spending has also been reactive to big spending changes in Food. Consumers spend more to upgrade their Food, so they spend less on Supplies – trading dollars. We saw this in 2015. In 2016 the situation reversed. Consumers value shopped for Food and spent some of the “saved” money on Supplies.

That brought us to 2017. Both Supplies and Food prices deflated while the inflation rate in both of the Services segments dropped to lows not seen in recent years. Value was the “word” and it was available across the market. Perhaps the biggest impact was that the upgrade to super premium Food significantly penetrated the market. This could have negatively impacted Supplies Spending, but it didn’t. Supplies’ spending increased in 93% of all demographic segments.

2018 started out as expected with a $1B increase in Supplies and a small lift in Food. Then the government got involved. In July the FDA issued a warning on grain free dog food and spending dropped over $2B. New tariffs were implemented on Supplies and spending flattened out then turned down $0.01B in the 2nd half. The full retail impact of Tariffs hit home in 2019 when spending fell -$2.98B, affecting 97% of all demographic segments.

In 2020 The pandemic caused consumers to focus on needs. That resulted in big spending lifts for Food and Veterinary and big drops in Supplies and Services. Pet Parents traded $. Some good news was that Supplies spending became more balanced. The performance gap between best and worst narrowed by 10.25%.

That brought us to 2021. The overall Retail Market strongly recovered but with no replication of the 2020 buying binge Pet Food $ dropped. In the Supplies segment, the pent-up buying desires of Pet Parents were unleashed. They bought all the Supplies items that had been on purchase “hold” for the last 2 years. The result was the biggest spending increase in history, over twice the size of the previous best. In fact, the $8.65B lift was larger than the annual Supplies spending for all years prior to 2003. While the bulk of the $ increase came from higher income groups the lift was truly widespread as 97% of all demographic segments spent more on Supplies. Prices are still important in Supplies Spending. They remained low throughout 2021 then skyrocketed to record highs in 2022. We’ll see how or if this impacted spending.

Finally – The “Ultimate” Pet Supplies Spending CU consists of 5 people – a married couple, with an oldest child 6>17. They are 35>44 yrs old. They are White, but not of Hispanic origin. They both work and at least one has an Advanced College Degree and is a Manager or Professional. They’re doing well with an income over $200K. They live in a small suburb in the Western U.S. and are still paying off the mortgage on their home.

Petflation 2022 – December Update: Price increase slows to +10.9% vs 2021

Inflation continues to make headlines. The YOY increases in the monthly Consumer Price Index (CPI) are larger than we have seen in decades but are slowing a little. December prices fell -0.3% from November. The CPI was still up +6.5% vs 2021, but down from +7.0% last month. The grocery price surge also slowed but they’re still up 11.8% over 2021. That’s 10 straight months of double-digit YOY monthly percentage increases. These are the first 10+% increases since 1981. As we have seen in recent years, 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.

Total Pet prices were 4.1% higher in December 2021 than in December 2020, while the overall CPI was up 7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June. National inflation has slowed since July, but Petflation increased until slowing in December. It passed the National CPI in July and is +10.9% in December, 69.1% higher than the national rate of 6.5%. We will look deeper into the numbers. This and future reports will include:

  • A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
  • Monthly comparisons of 22 vs 21 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month
    2. Inflation changes for recent years (20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2022 vs 2019
    4. Average annual Year Over Year inflation rate from 2019 to 2022
  • YTD comparisons this month are now annual comparisons since the data is through December
    1. Annual numbers for the monthly comparisons #2>4 above

In our first graph we will track the monthly change in prices for the 24 months from December 2020 to December 2022. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus those from 12 and 24 months earlier are included. I have also added and highlighted in pink the month in which the cumulative inflation since 2019 peaked. This will give you some key waypoints for comparisons.

The pandemic hit home in 2020. In December, the national CPI was only +1.4% and Pet prices were +0.4%. Veterinary and Services prices generally inflated after mid-2020, similar to the overall CPI while Food and Supplies prices generally deflated until late 2021. After that time, Petflation took off. Pet Food prices consistently increased but the other segments had mixed patterns until July 2022, when all increased. In August>October Petflation accelerated, except for a small October dip in Veterinary. In Nov>Dec, Services & Food prices continued to grow while Veterinary & Supplies prices stabilized. However, Total Petflation since December 2019 has been above the National CPI since November.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul/Aug 2022. 43% of the overall 15.5% increase since 2019 happened from Jan>June 2022.
  • Pet Food – Prices stayed generally below December 2019 levels from April 2020 to September 2021, when they turned up. There was a sharp increase in December but 91% of the 17.0% increase occurred in 2022.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022. They turned up in January and hit an all-time high, beating the 2009 record. They plateaued from Feb> May, turned up in June, flattened in July, turned up in Aug>Oct to a new record high, then plateaued in Nov>Dec.
  • Pet Services – Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in Mar>June. It has turned up again July>Dec.
  • Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December which put them above the overall CPI. In May prices fell and stabilized in June. Prices turned up again and despite Oct & Dec dips they have stayed above the National CPI since July.
  • Total Pet – The blending of patterns made Total Pet appear calm. In Dec 2021 prices surged. The segments had ups & downs Mar>Jun but Petflation grew Jul>Nov. It slowed in Dec. but has been ahead of the US CPI since Nov.

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’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were -0.3% vs November but were up 6.5% vs December 2021. The Grocery increase is down to 11.8% which is still a big negative but there is some positive news. 6 of 9 categories had increases from November but only 1 was over 0.5%. Unfortunately, it was Pet Services. The U.S. CPI rate is slowing and now Petflation is following that lead.

  • U.S. CPI– Prices are -0.3% from November. The YOY increase is +6.5%. It peaked at +9.1% in June. The targeted inflation rate is <2% so we are still over 3 times higher than the target. However, a 6th slight decline is good news.
  • Pet Food– Prices are +0.4% vs November and 15.2% vs Dec 21. They are also 29% higher than the Food at Home inflation rate – not good news! The YOY increase is being measured against a time when prices were only 1.8% above the 2019 level, but that increase is still 4.5 times the pre-pandemic 3.4% increase from 2018 to 2019.
  • Food at Home – Prices are up 0.3% from November. The increase from 2021 is 11.8%, down slightly from 12.0% last month. Inflation for this category since 2019 is the highest on the chart and is 53% more than the national CPI.
  • Pets & Supplies – Prices are up only +0.1% from November, but that is a big turnaround from -0.4% last month. They still have the lowest increase since 2019 but have the 3rd highest monthly increase vs 2021 for Pet Segments.
  • Veterinary Services – December prices fell -0.4% from November. They are +8.8% from 2021 and trail only Food in the Pet Industry. They also remain 2nd in the increase since 2019 with 18.1% compared to Food at home at 23.7%.
  • 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. In December prices were stable but +4.1% vs 2021. However, this is still 20% below the 2018>19 rate.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021/22. December prices were up +0.6% from November, the biggest increase on the chart, and +7.5% vs 2021, reaching yet another new record high.
  • Haircuts & Other Personal Services – Prices are +0.3% from Nov. and +6.3% from 2021. They are +16.9% since 2019.
  • Total Pet– Petflation is strong, 2.7 times the rate of last year and is 69.1% ahead of the National CPI. A drop by Veterinary flattened prices in December. Inflation is becoming more balanced, but Food is still the runaway leader. Inflation can cause reduced purchase frequency in Supplies, Services and Veterinary. Super Premium Food has been generally immune as consumers are used to paying a lot and it is needed every day. We’ll see if consumers are willing to pay the new high prices for food and buy the more discretionary products/services at the same frequency.

Since it is December, YTD Inflation = Annual Inflation. How does 2022 compare to previous years?

The increase from 2021 to 2022 is the biggest for 8 of 9 categories. The average annual increase since 2019 is 3.6% or more for all but Pet Supplies. This is largely due to high prices in 2019 and deflation in 2020 and the 1st half of 2021.

  • U.S. CPI – This year’s increase is 74% above the average increase from 2019>2022, but over 3 times the average annual increase from 2018>2021. Inflation is a big problem that started near the end of 2021 and worsened in 2022.
  • Pet Food– 10.2% Inflation in 2022 was 2nd only to 11.1% in 2008. It was magnified by deflation in the 1st half of 2021.
  • Food at Home – The 2022 inflation beat the U.S. CPI by 43%. You can see the impact of supply chain issues.
  • Pets & Pet Supplies – +7.7% set a new annual inflation record in 2022. Although the 2021>22 increase is being measured against a relatively “flat” 2021, it is very significant and just behind Food & Veterinary in the Pet Industry.
  • Veterinary Services – +8.8% was also a new annual record. Veterinary trails only Food at Home in inflation since 2019 and is the only segment on the chart with a 3+% inflation rate each year through the pandemic and recovery.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. In 2022 prices surged but have now slowed. However, the inflation rate is still 23% higher than pre-pandemic 2018>19.
  • Pet Services – May set a record for the biggest YOY monthly increase in history. Prices fell in June but began to grow again in July, reaching record highs in Sep>Dec. In fact, December broke the May increase record. The 2022 annual increase of 6.3% is the largest in history. Growing demand with decreased availability is a formula for inflation.
  • Haircuts & Personal Services – The services segments, essential & non-essential were hit hardest by the pandemic. After a small decrease in March, prices turned up again. The 21>22 increase beat 2020>21 and is double the 2018>19 increase. Consumers are paying over 15% more than in 2019. This usually reduces the purchase frequency.
  • Total Pet – We have seen basically two different inflation patterns. After 2019, Prices in the Services segments continued to increase, and the rate accelerated as we moved into 2021. The product segments – Food and Supplies, were on a different path. They generally deflated in 2020 and didn’t return to 2019 levels until mid-year 2021. Food prices began a slow increase, but Supplies remained stable until near yearend. In 2022, Food and Supplies prices turned sharply up. Food prices have continued to climb. Supplies prices stabilized Apr>May, grew Jun>Oct, then flattened in Nov>Dec. The Services segments have had ups & downs but are generally inflating. The net is a 2022 Petflation increase vs 2021 of 8.9%, the biggest in history and even ahead of the high 8.0% National rate.

Petflation slowed in December but is still high. Will it impact spending? Let’s put it into perspective. The 8.9% 2022 increase in Total Pet beat the 7.9% record set in 2009 and is about 6 times more than the 1.5% avg since then. Pet spending continues to move to higher income groups, but the impact of inflation varies by segment. Supplies is the most affected as many categories are price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a reduction in visit frequency. Spending in the Services segment is driven by higher incomes, so inflation is less impactful. We’ll just have to wait and see the impact on Pet Spending of continued strong Peflation.

2021 Pet Food Spending was $34.41B – Where did it come from…?

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

First, we’ll see which groups were most responsible for the bulk of Pet Food spending and the $2.44B decrease. The first chart details the biggest pet food spenders for each of 10 demographic categories. It shows their share of CU’s, share of pet Food spending and their spending performance (Share of spending/share of CU’s). 1 group is different from Total Pet – 45>74, as food spending skews slightly older. The categories are presented in the order that reflects their share of Total Pet Spending. There are other differences from Total Pet. First, being Married is more important in Food spending than in Total Pet. Income is the most important factor in both, but the # of earners in a CU matters very little in Pet Food spending. Food spending is also a little more balanced than Total Pet Spending. This is evident in the fact that the Performance of all groups but Homeowners, Married Couples and White, Not Hispanic is significantly lower for Food. Also, Age & # Earners do not reach the 60% targeted market share for Food. In 2020, Pet Food accounted for 70.8% of Pet Products $ and 44.0% of Total Pet. In 2021 the Food share fell to 59.1% in Products and 34.4% of Total Pet. After the Food binge in 2020, Pet Parents caught up on their children’s needs in other industry segments.

  1. Race/Ethnic – White, not Hispanic (84.2%) down from 88.8%. This large group accounts for the vast majority of spending in every segment. They lost share and their performance decreased to 125.4% from 129.9%, but this category moved up from #6 to #4 in terms of importance in Pet Food Spending demographic characteristics. While Hispanics, African Americans and Asian Americans account for 32.8% of U.S. CU’s, they spend only 15.8% of Pet Food $. However, this is up from 11.2% in 2020. African Americans were the only minority to spend less on Pet Food in 2021. Hispanics and Asians spent $1.9B more.
  2. # in CU – 2+ people (79.1%) – down from 82.5%. The share of market for 2+ CU’s is no longer over 80% for Pet Food but is at that high level for Supplies, Services and Total Pet. Their performance fell from 117.5% to 113.8% but their rank increased from 9th to 6th. In a reversal from 2020, 4 & 5+ CUs drove the decrease (-$8B). However, both still performed above 100%. 2 person CUs had a $3.8B lift and 3 Person CUs spent $1B more. Singles also had a $0.8B (+11.7%) increase which was a big factor in the drop in share and performance by 2+ CUs.
  3. Housing – Homeowners (81.0%) – down from 86.7%. Homeownership is a huge factor in pet ownership and pet spending. In 2021, homeowners lost the share gained in 2020 and their performance fell from 131.7% to 125.1%. However, homeownership stayed in 5th place in terms of importance for pet Food spending. Those w/mtge spent $4B more but it was not enough to overcome the $8B drop from those w/o mtge. Renters also had a $1.6B increase.
  4. Area – Suburban + Rural (69.4%) down from 77.8%. Their performance fell from 123.4% to 107.6%. (8th) While the big (2500>) suburbs and center city spent $3.9B more, areas <2500 spent $6.3 less – another big reversal.
  5. Income – Over $70K (63.1%) – down from 65.3%. Their performance rating also fell from 150.2% to 140.9% but they moved from 2nd to 1st in importance. High income is very important in Pet Food Spending but the bar was lowered slightly in 2021. The biggest factor was the $8.9B spending drop by the $100>149K group. They led the way in 2020 binge buying. The $150K> group spent $4.1B more and the $70>99K group had a good year, +$2.5B. In fact, the only other income group besides $100>149K to spend less on Pet Food was $30>49K, -$1B. Pet ownership is common across all income levels but in 2021 higher income is still critically important in Pet Food Spending.
  6. # Earners – “Everyone Works” (57.6%) – down from 70.7%. This was a huge decrease from last year and their performance also fell sharply from 123.3% to 101.7%. They are no longer in the 120+% club and now rank last. No Earner CUs of all sizes spent $3.3B more while 2+ Earner CUs spent $6.5B less. It was a strong year for Retirees.
  7. Education – College Grads (62.4%) – up from 42.1%. Higher Education skyrocketed in importance in Pet Food Spending as college grads had a 50% increase in share and their performance grew from 90.1% to 131.7%. Higher education, specifically a college degree, jumped from last to 3rd in importance in increased Pet Food Spending.
  8. Occupation – All Wage & Salaried Workers (60.5%) – up from 48.1% – Spending by all white collar workers took off while it dropped sharply for self-employed. Their performance grew from 78.2% to 102.0% and they replaced the “Bosses” in the list of big groups. However, the new group caused occupation to fall from #1 to #9 in importance.
  9. CU Composition – Married Couples (64.8%) – down from 71.1%. They lost share and their performance fell from 146.6% to 136.8%, but they moved up from 3rd to 2nd. In Married segments, only Couples Only and those with an oldest child 6>17 years old spent more. Singles and all adult, unmarried CUs also increased spending by $1.6B.
  10. Age – 45>74 (56.5%) – down from 68.6%. This older group replaced 35>64 yr-olds in 2020. Their performance fell from 132.2% to 110.3% and they fell from 4 to 7 in importance. 45>64 is in both groups. The change stayed in place because the 65>74 share is 17.8% while 35>44 is 16.3%. 55>64 was the big driver in the 2020 lift and the 2021 fall.

Only 1 of the big spenders for Pet Food is different from Total Pet. Last year there were 3 special groups. 2021 brought a return to a more normal spending pattern and spending became slightly more balanced. This is best illustrated by the fact that in 2021 the performance for only 5 groups exceeds 120%. Last year there were 8 groups at $120+%, 5 of which had a performance level above 130+%.

Now, we’ll look at 2021’s best and worst performing Pet Food spending segments in each category.

Most of the best and worst performers are the ones that we would expect but 2021 produced one surprise winner – No Earner 2+ CUs, and 1 surprise loser – Suburbs with a population over 2500. There are 10 different winners from 2020 and 5 different losers. This is even more than the total of 10 last year and the 9 new winners this year in Total Pet. This reflects the return to normal after the binge buying in 2020. Changes from 2020 are “boxed”. We should note:

  • Income The Food winner makes slightly less than the winner in other segments and Total Pet but is still over $150K.
  • # Earners – The No Earner, 2+ CUs win reflects a strong year by Retirees, especially the 65>74 yr-old Boomers.
  • Occupation – Mgrs/Professionals & Blue Collar returned to their normal spots, again reflecting income’s importance.
  • Age, Generation- The high income, 45>54 Gen Xers moved to the top. Gen X was the big winner in 2021.
  • Race – The usual winner, but African Americans replaced the traditionally low pet owning Asian CUs at the bottom.
  • Education – Once again having a College Degree and the resulting higher income mattered in Pet Food Spending.
  • Housing – Owning a home is always important. Those with a mortgage returned to their usual place at the top.
  • CU Composition, CU Size – Married, Couples Only and 2 people CUs returned to their “normal” top spots.
  • Region – The West returned to the top and was the only region with 100+% performance.
  • Area – The big suburbs were a surprise loser. Usually, that spot belongs to Center City.

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

There are no repeats from 2020 so all are new. All 12 losers won last year which shows the impact of the 2020 binge. 5 of the winners were 2020 losers. That means that 71% flipped from 1st to last or vice versa. Half of the winners are expected while most losers are not. The Surprise winners are Retirees, No Earner, 2+CUs, Center City, 75+ and Hispanics. The losers that came as no surprise were HS Grads or less, Homeowners w/o Mtge and the Midwest. The biggest surprise was that spending fell -$2.44B while 65% of all demographic segments spent more. Here are the specifics:

  • Housing – The 2020 winner and loser both flipped
    • Winner – Homeowners w/Mtge – Food: $18.77B; Up $4.02B (+27.3%)                                     2020: Homeowners w/o Mtge
    • Loser – Homeowners w/o Mtge – Food: $9.10B; Down $8.09B (-47.1%)                                   2020: Homeowners w/Mtge
    • Comment – Renters also spent more so the Food decrease came solely from Homeowners without a mortgage.
  • Region – Another dual flip.
    • Winner – South – Pet Food Spending: $13.07B; Up $3.88B (+42.2%)                                         2020: Midwest
    • Loser – Midwest – Pet Food Spending: $6.58B; Down $9.14B (-58.1%)                                      2020: South
    • Comment – Last year only the West and Midwest spent more. This year only the Midwest spent less.
  • # in CU – The 3rd dual flip as 2 person CUs return to the top for the 1st time since 2017.
    • Winner – 2 People – Pet Food Spending: $14.57B; Up $3.80B (+35.2%)                               2020: 4 People
    • Loser – 4 People – Pet Food Spending: $4.35B; Down $7.21B (-62.4%)                                 2020: 2 People
    • Comment: Although Singles again had an increase, there was a turnaround from 2020. This year 2 & 3 person CUs spent more while all CUs over 4 spent less – the exact opposite of 2020.
  • Education – Higher education returned to the forefront in importance in Pet Food spending.
    • Winner – BA/BS Degree – Food Spending: $11.07B; Up $3.32B (+42.8%)                                 2020: < HS Grads
    • Loser – HS Grads or less – Food Spending: $4.74B; Down $10.02B (-67.9%)                           2020: HS Grad w/some College
    • Comment – The biggest lift came from those with a BA/BS degree but all segments with any college experience spent more on Pet Food in 2021. Those without a HS diploma binge bought Food in 2020. In 2021 the situation flipped, but in fact all groups with a HS diploma or less spent a lot less on Pet Food, -$10B.
  • Occupation – After 3 years at the top, Self-Employed flipped to the bottom.
    • Winner – Retired – Pet Food Spending: $8.44B; Up $3.16B (+59.8%)                                         2020: Self-Employed
    • Loser – Self-Employed – Pet Food Spending: $2.09B; Down $9.19B (-81.5%)                           2020: Tech, Sales, Clerical
    • Comment – Retirees led the way. However, in wage & salary earners, only Construction Workers/Mechanics spent less. Tech/Sls/Clerical was +$1.8B and Service Workers were +$1.1B.
  • CU Composition – CU’s with children became markedly less important.
    • Winner – Married, Couple Only – Food: $11.60B; Up $2.95B (+34.0%)                                 2020: Married, Oldest Child 18>
    • Loser– Married, Oldest Child 18> – Food: $2.58B; Down $9.16B (-78.0%)                            2020: 2+ Adults, No Kids
    • Comment – Married, oldest child 18> flipped from 1st to last. CUs with an oldest child 6>17 spent more. All other CUs with children, including Single Parents spent less. Adults only was a different story. All adult CUs – Singles & 2+ CUs, married or unmarried – just no kids, spent more on Pet Food.
  • # Earners – The winner and loser flipped leaving a truly surprising segment at the top, No Earner, 2+ People CUs.
    • Winner –– No Earner, 2+ CU – Pet Food Spending: $5.36B; Up $2.88B (+116.1%)                 2020: 2 Earners
    • Loser – 2 Earners – Pet Food Spending: $12.09B; Down $6.19B (-33.8%)                                 2020: No Earner, 2+ CU
    • Comment – All No Earner and 1 Earner CUs of any size spent more on Pet Food in 2021, but all CUs with 2+ earners spent less. Income is important but the number of people earning the money didn’t matter as much.
  • Generation – Boomers and Gen X flipped positions.
    • Winner – Gen X – Pet Food Spending: $11.12B; Up $2.82B (+34.0%)                                           2020: Baby Boomers
    • Loser – Baby Boomers – Pet Food Spending: $11.82B; Down $7.49B (-38.8%)                         2020: Gen X
    • Comment – Much of the 2020 Pet Food spending lift was the Boomers’ emotional reaction to the pandemic. In 2021 we returned to reality with Gen X leading the way. Actually, all generations but Boomers spent more with the Silent Generation (born <1946) having the 2nd biggest increase, +$1.4B.
  • Income – Last year’s binge leader, $100>149K flipped to the bottom while the $150>199K group took the top spot.
    • Winner – $150 to $199K – Pet Food Spending: $4.81B; Up $2.73B (+130.7%)                          2020: $100 to $149K
    • Loser – $100 to $149K – Pet Food Spending: $5.46B; Down $8.92B (-62.1%)                            2020: $70 to $99K
    • Comment – The $30>49K group was the only other segment to spend less. Spending increases were widespread but $150K> was up $4.1B. <$30K: +$0.1B; $50>69K: +$0.9B; $70>99K: +$2.5K; $200K>: +$1.4B.
  • Area Type – Areas <2500 population flipped from 1st to last, with another surprise winner, Center City.
    • Winner – Center City – Pet Food Spending: $10.54B; Up $2.36B (+28.8%)                              2020: Areas <2500
    • Loser – All Areas <2500 – Pet Food Spending: $11.19B; Down $6.35B (-36.2%)                     2020: Suburbs 2500>
    • Comment – The Big Suburbs (2500>) also spent more, and the Center City lift was widespread across America. In fact, only Cities with a population above 5 million spent a little less, -$0.1B.
  • Age – The 55>64 year olds flipped from 1st to last and we had a truly surprising winner, 75+ years old.
    • Winner – 75+ yrs – Pet Food Spending: $3.76B; Up $1.76B (+88.3%)                                         2020: 55>64 yrs
    • Loser – 55>64 yrs – Pet Food Spending: $6.75B; Down $7.89B (-53.9%)                                    2020: 45>54 yrs
    • Comment: In 2020 the 55>64 yr olds drove almost all of the increase. In 2021 they were responsible for all of the decrease as every other age group spent more. The 75+ group won but 35>44 was +$1.2B and 45>54 was +$1.1B.
  • Race/Ethnic – White, Not Hispanics flipped to the bottom and Hispanics had a huge, +62% lift to take the top spot.
    • Winner – Hispanic – Pet Food Spending: $3.43B; Up $1.31B (+62.0%)                                      2020: White, Not Hispanic
    • Loser – White, Not Hispanic – Pet Food Spending: $28.98B; Down $3.74B (-11.4%)            2020: Asians
    • Comment – The U.S. is becoming more racially/ethnically diverse but White, Not Hispanic is still by far the biggest spender in every Pet Industry Segment. In 2021 Pet Food spending became a little more balanced. African Americans spent less on Pet Food but Asians spent a truly amazing 131% more, +$0.6B.

We’ve now seen the “winners” and “losers” in terms of increase/decrease in Pet Food Spending $ for 12 Demographic Categories. In 2020, the big spending lift due to the pandemic occurred in very specific segments. In 2021 those same segments generally had the biggest drops in $. This created an unusual situation. Pet Food spending decreased by -$2.44B while 65% of all demographic segments actually spent more. Most of America remains firmly committed to high quality Pet Food. However, super premium Food comes with high prices, so income is very important in Pet Food spending. The pandemic has accelerated value shopping, especially on the internet. We have identified the winning segments in performance and $ increase but they were not alone. Not every good performer can be a winner. Some “hidden” segments should also be recognized for performance. They don’t win an award, but they get…

Honorable Mention

Asians have a low % of pet ownership, but it is undoubtedly growing as their Pet Food $ more than doubled in 2021. The oldest Americans are generally short on $ but they are committed to their Pets. In 2021, many of them likely committed to Super Premium Pet Foods as their spending increased by 66%. The highest income groups had the biggest increase in spending, but “middle America” also opted in. This is evident by the big lifts from $70>99K and lower-level White Collar workers. Gen Xers had a great year and they are the most likely group to have an oldest child between 6 and 17 years old. Homeownership has always been a key factor in Pet Parenting and Pet Spending, but it is not a necessity. This is made very clear by the 33% increase in Pet Food Spending from Renters.

Summary

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

The 25 to 34 yr old Millennials were the first to “get on board” with Super Premium in the 2nd  half of 2014. In 2015 a substantial portion of consumers began to upgrade. The result was a $5.4B spending increase. These consumers were generally more educated and had higher incomes. One negative was that they often paid for the upgrade by spending less in other segments. In 2016 the anticipated drop in spending happened. The upgraded group value shopped for their new food and found great deals, especially online. They spent some of the $3B “saved” Food $ in other segments but not enough to make up for the drop in Food. Total Pet Spending was down $0.46B. In 2017 we were ready for a new “wave”. Thanks to a very price competitive market, what we got was a deeper penetration of Super Premium foods. This group of upgraders was mostly middle-income, not college educated and often Blue-collars workers. Most also were in the 55>64 yr-old age group. The result was a $4.6B increase but this time there was no trading $ with other segments.

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

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

In 2021, the retail market strongly recovered but the turmoil in Pet Food continued. The 2020 binge buying was unnecessary and didn’t increase usage, so Pet Food spending fell by $2.44B. The 2021 Turmoil exceeded that of 2018 as every segment with the biggest increase in 2020 had the biggest decrease in 2021. The resulting drop in $ hid the fact that 65% of all demographic segments spent more on Pet Food. 2021 was actually a pretty good year for Pet Food.

Finally – 2021’s “Ultimate” Pet Food Spending CU is 2 people – a married couple. They are 45>54 years old and White, but not of Hispanic origin. They both work and at least one has an Advanced College Degree and is a Manager or Professional. They earn $150>$199K but are still paying the mortgage on their house in a small suburb in the West.

2021 Total Pet Spending was $99.98B – Where did it come from…?

Total Pet Spending in the U.S. was $99.98B in 2021, a $16.23B (19.4%) increase from 2020. These figures and others in this report are calculated from data in the annual Consumer Expenditure Survey conducted by the US BLS. 2020 was a year of pandemic turmoil for the industry. Consumers focused on “needs” which caused a spending lift in Veterinary and binge buying of Food. However, the discretionary segments – Supplies and Services, had big decreases in $. The net was a 6.8% in Pet Spending. 2021 was also 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. 2021 Pet Spending certainly deserves a closer look.

The first question is, “Who is spending most of the $100 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 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 2021.

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 2020 is that College Grads gained 12% in share, reached the 60% threshold and replaced Associates Degree>. There were changes in the numbers and rankings and again only 5 made the 120%+ club. Higher Education (College Grads) moved in while Everyone Works dropped out. All Wage Earners gained 4 points in share and 10 points in performance. While it matters less how many people work, higher income remains the single biggest factor and continues to grow in importance in Total Pet Spending.

  1. Race/Ethnic – White, not Hispanic (84.2%) down from 87.3%. This is the 2nd largest group and has the largest share of Pet Spending. Their performance was down from 127.6% to 125.3% and they fell from #3 to #4 in terms of importance as spending became a little more balanced. 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 CU spending. They spent 75% more on pets in 2021 but they’re next to last in Pet Spending as a percentage of total spending – 0.51% vs a national average of 1.12%.
  2. # in CU – 2+ people (80.6%) up from 80.3%. Singles remain the only group with under 100% performance. In 2021, 2 person CUs had the biggest increase and only 4 person CUs spent less. However, this big decrease reduced the share gain and slowed the performance increase of 2+ CUs from 114.4% to 115.9%.
  3. Housing – Homeowners (80.0%) down from 83.3%. Controlling your “own space” is a key to larger pet families and more pet spending. 2021 was a bad year for Homeowners w/o Mtges (-$3.7B) as they did not replicate the binge buying of Food. Overall, Homeowners spent $10.2B more but the group’s performance fell from 126.6% to 123.6% because of a spectacular year by Renters, +43.2%. They stayed in 5th place in importance. The homeownership rate fell from 66% to 65% due to a drop from the older groups. It’s still growing in the younger CUs.
  4. Area – Suburban & Rural (71.8%) up from 71.6% Homeownership is high and they have the “space” for pets. The larger suburbs had a great year but the $ for areas <2500 fell by $1B. This pushed their performance down from 113.6% to 111.4%. Center City had an increase of $4.4B but their performance is the worst at 79.3%
  5. Income – Over $70K (68.2%) up from 64.3%. They gained significant share and their performance grew to 152.3% from 147.9%. CU income is still by far the most important factor in increased Pet Spending. Spending was again on a roller coaster: <$30K: +$1.1B; $30>50K: -$1.9B; $50>100K: +$7.8B; $100>150K: -$4.9B; $150K>: +$14.1B. Higher income is growing more important. The $150K> group has 15.8% of CUs but accounts for 34.0% of Total Pet $.
  6. # Earners – “Everyone Works” (66.4%) down from 70.7%. These are CUs of any size where all adults are employed. They lost share and their performance fell from 123.0% to 117.0%. They dropped out of the 120+% club and are now the 6th most important category. Income is growing in importance but 2021 was also a great year for No Earner CUs. Total Pet spending by Retirees was up 51%.
  7. Education – College Grads (65.6%) up from 52.6%. Higher Education level is usually tied to higher income and Pet spending. It can also be a key factor in recognizing the value in product improvements. 2020 largely threw this history out the window as those with less than a college degree led the way in spending in the necessary segments – Food and Veterinary. 2021 saw a total reversal as higher education again became critical in Pet Spending. In fact, the share for College Grads reached 60% and their performance grew from 112.6% to 138.6%, putting them in the 120%+ club as the 2nd most important factor in Total Pet Spending.
  8. Occupation – All Wage & Salary Earners (63.2%) up from 59.2%. Their performance also grew from 96.3% to 106.5% so they are again “earning their share”. All but Construction Workers spent more on their pets in 2021. Managers and Professionals had the biggest $ increase, +$6B but Service workers led the way in percentage, +88%. Their gains were slowed a bit by the $6B spending increase by Retirees but were helped by an -$8B drop in spending by the Self-Employed.
  9. CU Composition – Married Couples (62.7%) down from 64.7%. With or without children, 2 people, committed to each other, is an ideal situation for Pet Parenting. In 2021, they lost share and their performance fell from 133.4% to 132.4%, dropping them from 2nd to 3rd place in importance. This was entirely due to an -$8B spending drop from Married Couples with a child over 18. This was not unexpected as they binge bought Pet Food in 2020.
  10. Age – 35>64 (60.9%) down from 63.2%. They lost share and their performance fell from 118.4% to 116.2%. This was entirely due to a -$3.2B decrease from 55>64 yr-olds, who also binge bought Food in 2020. All other age groups spent at least 19.6% more so Pet Spending is slightly more balanced and age is 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 and in a few cases falls below 60%. We also altered the groups in some segments to better reflect where most of the business is coming from. The pandemic and this year’s recovery caused some turmoil in Pet Spending,

The group performance is a very 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, 2021 is a little more complicated. Many of the big drops in spending came from segments that binge bought Pet Food in 2020. These big emotional moves, up or down can affect the total group performance. Normal may return in 2022.

Now, let’s drill deeper and look at 2021’s best and worst performing segments in each demographic category

Most of the best and worst performers are just who we would expect but there are 9 winners that are different from 2020. This also indicates a move back towards “normalcy”. Changes from 2020 are “boxed”. We should note:

  • Income is important in Pet Spending, which is shown by the 239.6% performance by the $200K> group and a win by 3 Earners. However, $70>99K also had a strong year. In 2021, all groups over $70K performed at 100+%.
  • Occupation – Mgrs/Professionals & Self-Employed are the only occupations with 100+% performance.
  • Age/Generation – After the 2020 Boomer Food Binge, spending moved towards Gen X with the 35>44/Gen X wins.
  • Region – After 2 years at #2 but still with 100+% performance, the West returned to its normal place at the top.
  • CU Size/Composition – The importance of children was maintained with a win by 5+ People and another win by a group with an Oldest Child over 6. The “magic” CU number moved up again to 5 from 2020: 4, 2019: 3; 2018: 2.
  • Homeowners w/Mtges moved back to their expected spot at the top. In 2020 those w/o mtge beat them by 0.8%.

The “new” and old winners reflect both the move back towards more normal spending patterns and slightly younger CUs. In the next section we’ll look at the segments who literally made the biggest difference in spending in 2021.

We’ll “Show you the money”! This chart details the biggest $ changes in spending from 2020.

An unbelievable amount of turmoil. There are 24 Winners and Losers. Only 1 segment held its spot from 2020 while 17 switched from winner to loser or vice versa. In 7 categories both flipped. Overall, 96% were different from 2020.

  • Housing – The winner and loser flipped positions.
    • Winner – Homeowner w/Mtge – Pet Spending: $54.84B; Up $13.87B (+33.9%)                         2020: Homeowner w/o Mtge
    • Loser – Homeowner w/o Mtge – Pet Spending: $25.15B; Down -$3.66B (-12.7%)                      2020: Homeowner w/Mtge
    • Comment – Homeowners w/Mtge had the biggest gain, but Renters also spent $6B more. The “losing” Homeowners w/o Mtge binge bought Food in 2020.
  • Area Type – Another dual flip.
    • Winner – Suburbs 2500> – Pet Spending: $45.47B; Up $12.86B (+39.4%)                                   2020: Areas <2500
    • Loser – Areas <2500 – Pet Spending: $26.36B; Down -$1.02B (-3.7%)                                          2020: Suburbs 2500>
    • Comment – The Big Suburbs returned to their usual spot at the top. Center City also had a big increase in spending, +$4.4B. The Spending in the Areas with a population under 2500 fell by -$1B. Groups in this area also binge bought Pet Food in 2020. However, the behavior was less widespread in this segment.
  • # in CU – Our 3rd dual flip.
    • Winner – 2 People – Pet Spending: $39.83B; Up $11.40B (+40.1%)                                                 2020: 4 People
    • Loser – 4 People – Pet Spending: $14.72B; Down -$3.16B (-17.7%)                                                  2020: 2 People
    • Comment: 2 people CUs spend the most, 39.8% of all Pet $, and their increase was 4 times larger than any other segment. However, 5+ CUs also had a big, 33% increase. In fact, only 4 People CUs spent less.
  • Race/Ethnic – Our only bit of stability as White, Not Hispanics (84.2% of all Pet $) won again.
    • Winner – White, Not Hispanic – Pet Spending: $84.15B; Up $11.06B (+15.1%)                         2020: White, Not Hispanic
    • Loser – African American – Pet Spending: $3.05B; Down -$0.28B (-8.3%)                                 2020: Asian American
    • Comment – A usual winner, but Hispanics and Asians spent 74+% more. Only African Americans spent less.
  • Education – Another flip – This one definitely produced the expected results. <HS was the only group with a $ drop.
    • Winner – Adv. College Degree – Pet Spending: $32.43B; Up $10.93B (+50.9%)                        2020: < HS Grads
    • Loser – Less than HS Grads – Pet Spending: $1.70B; Down -$9.46B (-84.8%)                           2020: BA/BS Degree
    • Comment – Education’s importance came back to the forefront in 2021. BA/BS finished a close 2nd, +$10.6B.
  • Region – After strong Food binge buying in 2020, the Midwest flipped to last.
    • Winner – West – Pet Spending: $30.32B; Up $10.33B (+51.7%)                                                     2020: Midwest
    • Loser – Midwest – Pet Spending: $18.97B; Down -$6.30B (-24.9%)                                              2020: Northeast
    • Comment – In 2020 the Midwest and West had the only increases in Total Pet $. In 2021 the Midwest had the only decrease. Both the South and Northeast increased Pet Spending by over $6B.
  • Generation – Gen X & Boomers flipped. The Boomers landed at the bottom because of 2020 Food binge buying.
    • Winner Gen X – Pet Spending: $33.62B; Up $9.67B (+40.3%)                                                    2020: Baby Boomers
    • Loser – Baby Boomers – Pet Spending: $32.94B; Down -$1.90B (-5.5%)                                   2020: Gen X
    • Comment – Only Boomers spent less $ as all other groups spent 25% to 77% more on Pets.
  • Income – No surprises here. The $100>149K group was a leader in Food binge buying in 2020.
    • Winner – $200K> – Pet Spending: $20.56B; Up $9.00B (+77.9%)                                                2020: $100 to $149K
    • Loser – $100 to $149K – Pet Spending: $18.50B; Down -$4.87B (-20.8%)                                 2020: $70 to $99K
    • Comment – $150K> provided the biggest lift, +$14.1B, but the low to middle income $50>99K also spent $7.8B more. The only other decrease came from $30>49K, -$1.9B.
  • Age – The 6th Winner and Loser flip. Once again the loser was largely due to 2020 Food spending.
    • Winner – 35>44 yrs – Pet Spending: $21.39B; Up $8.10B (+60.9%)                                            2020: 55>64 yrs
    • Loser – 55>64 yrs – Pet Spending: $20.95B; Down $3.20B (-13.3%)                                           2020: 35>44 yrs
    • Comment: Only 55>64 yr-olds spent less. The increase by the 35>44 yr-olds was more than double the 2nd best but the spending increase was strong and widespread. 25>34, 45>54, 65>74 & 75+ all had increases over $2.5B.
  • CU Composition – Married, Couple Only flipped to the top and yet another 2020 Food Binger flipped to the bottom.
    • Winner – Married, Couple Only – Pet Spending: $28.828; Up $7.62B (+36.0%)                  2020: Married, Oldest Child 18>
    • Loser – Married, Oldest Child 18> – Pet Spending: $8.80B; Down -$8.06B (-47.8%)          2020: Married, Couple Only
    • Comment – The loser was the only type to spend less. Couples Only edged out those with Children 6>17, +$6.9B.
  • Occupation – Self-Employed, one of the top 2020 Food Bingers flipped from 1st to last.
    • Winner –– Retired – Pet Spending: $18.29B; Up $6.18B (+51.1%)                                              2020: Self-Employed
    • Loser – Self-Employed – Pet Spending: $7.78B; Down -$8.08B (-50.9%)                                  2020: Tech, Sales, Clerical
    • Comment– Construction workers also spent less. Retirees narrowly beat Mgrs/Professionals, +$6.02B for the win.
  • # Earners – No flips but a surprise winner, which reflects a strong year by Retirees.
    • Winner – No Earner, 2+CU – Pet Spending: $10.21B; Up $4.56B (+80.9%)                            2020: 2 Earners
    • Loser – 1 Earner, Single – Pet Spending: $12.85B; Up $1.14B (+9.8%)                                    2020: No Earner, Single
    • Comment – 2 Earner CUs finished a strong 2nd, +$3.6B, but all working & nonworking groups spent more in 2021.

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

Let’s start with Hispanics. They have 14.7% of CUs but generated 26.5% of the increase. That is significant. Most of the attention also went to higher incomes. Pet Spending appears to be moving that way. The $70>99K income group is absolutely middle income. They had a great year with a 48% (+$5.1B) increase. They are also now performing above 100%, 106.2%. The Northeast had a extra strong recovery, +$6.04B (+47.9%) after a -16% drop in 2020. Renters are often at the bottom of any chart as they have a lower % of Pet ownership. They stepped up in 2021 with a $6.03B (+43.2%) increase. Pet spending is usually about Marriage and Family but it is popular with all groups. You see this from the big lift, +$4.51B (+42.0%) from 2+ adult, unmarried, no kid CUs. Our last group normally gets a lot of publicity, Millennials. However, 2021 generally belonged to their older brethren, Gen X. Millennials also stood strong last year. They have 25.1% of CUs but generated 39.7% of the $ increase.

Summary

To properly review 2021, 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 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 and all segments but Food. In the best/worst performing segments, Gen X took back the top spot and  spending skewed younger and back to more traditional winners, like Homeowners w/Mtges and Incomes over $200K.

The biggest $ changes saw even more turmoil than in 2020. Only 1 segment held its position, compared to 6 in 2020, while 17 switched from 1st to last or vice versa. 7 winners flipped from last to first, but most were the “usual suspects”. There were only 2 surprise winners – No Earner, 2+CUs & Retirees, which showed that the lift wasn’t just coming from the young. On the “losing” side, 10 segments flipped from 1st to last. This was largely due to the binge buying of Food in 2020, which couldn’t be repeated in 2021. This resulted in only 3 “usual” losers – <HS Grads, African Americans and 1 Earner, Singles. At least the winning side returned to more normal behavior, but we mustn’t forget that the spending surge was widespread. 83% of all 96 demographic segments increased Pet Spending. In 2020 it was only 48%. 1 change is likely to last. The Gen Xers replaced the Boomers at the top. Millennials are in hot pursuit but that change won’t come for a number of years. We will continue our analysis of 2021 Pet $ by drilling deeper down into the individual segments.

But before we go…The Ultimate Total Pet Spending CU in 2021 has 5 people, a married couple with an oldest child 6>17. They are 35>44 yrs-old. They are White, but not Hispanic. They both work. At least one has an advanced college degree and is a Mgr/Professional. They earn $200K+. They still have a mortgage on a house located in the semi-rural West.

Petflation 2022 – November Update: Prices increase to +12.0% above 2021

Inflation continues to make headlines. The YOY increases in the monthly Consumer Price Index (CPI) are larger than we have seen in decades but are slowing a little. November prices fell -0.1% from October. The CPI was still up +7.1% vs 2021, but down from +7.7% last month. The grocery price surge also slowed but they’re still up 12.0% over 2021. That’s 9 straight months of double-digit YOY monthly percentage increases. These are the first 10+% increases since 1981. As we have seen in recent years, 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.

Total Pet prices were 4.1% higher in December 2021 than in December 2020, while the overall CPI was up 7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June. National inflation has slowed since July, but Petflation has increased, passing the National rate in July and is +12.0% in November, 69.0% higher than the national rate of 7.1%. We need to look a little deeper into the numbers. This and future reports will include:

  • A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
  • Monthly comparisons of 22 vs 21 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month
    2. Inflation changes for recent years (20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2022 vs 2019
    4. Average annual Year Over Year inflation rate from 2019 to 2022
  • 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 November 2020 to November 2022. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus those from 12 and 24 months earlier are included as are the year-end numbers for 2020 & 2021.This will give you some key waypoints for comparisons.

The pandemic hit home in 2020. In November, the national CPI was only +1.3% and Pet prices were +0.1%. As you can see, Veterinary and Services prices generally inflated after mid-2020, similar to the overall CPI while Food and Supplies prices generally deflated until late 2021. After that time, Petflation took off. Pet Food prices consistently increased but the other segments had mixed patterns until July 2022, when all increased. In August>October Petflation accelerated, except for a miniscule dip in Veterinary in October. In November, Services and Food prices surged, Veterinary stabilized, but Supplies fell. However, Total Petflation since December 2019 passed the National CPI lift for the 1st time.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul/Aug 2022. 43% of the overall 15.9% increase since 2019 happened from Jan>June 2022.
  • Pet Food – Prices stayed generally below December 2019 levels from April 2020 to September 2021, when they turned up. There was a sharp increase in December but 90% of the 16.6% increase has happened since January.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022 when they turned sharply up reaching a new all-time pricing high in January, beating the 2009 record. They plateaued from February> May, turned up in June, flattened in July, turned up in Aug>Oct then fell in November.
  • Pet Services – Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in Mar>June. It has turned up again July>Nov.
  • Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December which put them above the overall CPI. In May prices fell and stabilized in June. Prices turned up again and despite an October dip they have been above the National CPI since July.
  • Total Pet – The blending of patterns made Total Pet appear calm. In December 2021 prices surged. The segments had mixed up & downs Mar>Jun but Petflation has accelerated since July and passed the U.S. CPI in November.

Next, we’ll turn our attention to the Year over Year inflation rate change for November and compare it to last month, last year and to previous years. We’ve added some human categories to put the pet numbers into perspective.

Overall, Prices were -0.1% vs October but were up 7.1% vs November 2021. The Grocery increase is down to 12.0% which is still a big negative but there is another area of concern. 6 of 9 categories had increases from October. 4 were over 0.5%, 3 were Pet. The U.S. CPI rate is slowing but Petflation, especially in Food & now Services, is getting worse.

  • U.S. CPI– Prices are -0.1% from October. The YOY increase is +7.1%, down from the 9.1% peak in June. The targeted inflation rate is <2% so we are still about 4 times higher than the target. However, a 5th slight decline is good news.
  • Pet Food– Prices are +0.8% vs October and 15.7% vs Nov 21. They are now 31% higher than the Food at Home inflation rate – not good news! The YOY increase is being measured against a time when prices were essentially at 2019 levels, but that increase is still over 4 times the pre-pandemic 3.7% increase from 2018 to 2019.
  • Food at Home – Prices are down -0.04% from October. The increase from 2021 is 12.0%, down slightly from 12.4% last month. Inflation for this category since 2019 is the highest on the chart and is 49% more than the national CPI.
  • Pets & Supplies – Prices fell -0.4% from October, the 2nd biggest decrease overall and the only one in Pet. They still have the lowest increase since 2019 but are still the 3rd highest in monthly increase vs 2021 for Pet Segments.
  • Veterinary Services – November prices rose +0.1% from October. They are +11.0% from 2021 and trail only Food in the Pet Industry. They also remain 2nd in the increase since 2019 with 19.2% compared to Food at home at 23.4%.
  • Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 2021. In November prices fell again and 2022 prices are now 14% below the pre-pandemic 2018>19 rate.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021/22. November prices spiked, +1.1% from October and +7.4% vs 2021, reaching yet another new record high.
  • Haircuts & Other Personal Services – Prices are +1.4% from Oct. and +6.8% from 2021. They are +16.9% since 2019.
  • Total Pet– Petflation is strong, 3.4 times the rate of last year and is 69.0% ahead of the National CPI. All but Supplies increased prices in November, but inflation is still primarily being driven by Food & Veterinary. Inflation can cause reduced purchase frequency in Supplies, Services and Veterinary. Super Premium Food has been generally immune as consumers are used to paying a lot and it is needed every day. We’ll see if consumers are willing to pay the new high prices for food and buy the more discretionary products/services at the same frequency as they did in the past.

Now here’s a look at Year-to-Date numbers. How does 2022 compare to previous years…so far?

The increase from 2021 to 2022 is the biggest for 8 of 9 categories. The average annual increase since 2019 is 3.4% or more for all but Pet Food & Pet Supplies. This is largely due to deflation in the 1st half of 2021.

  • U.S. CPI – The current increase is still almost double the average increase from 2019>2022, but nearly 4 times the average annual increase from 2018>2021. Inflation is a big problem that started recently.
  • Pet Food – Inflation is growing stronger, especially after deflation in the 1st half of 2021 kept YTD prices low.
  • Food at Home – The 2022 YTD inflation beat the U.S. CPI by 41%. You can see the impact of supply chain issues.
  • Pets & Pet Supplies – Prices have been at record levels since January. Although the 2021>22 increase is being measured against a “flat” 2021, it is significant and just behind Food & Veterinary in the Pet Industry.
  • Veterinary Services – Trails only Food at Home in inflation since 2019 and is the only segment on the chart with a 3+% inflation rate each year throughout the pandemic and recovery. No matter what, just charge more.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. In 2022 prices surged but have now slowed. However, the inflation rate is still 26% higher than pre-pandemic 2018>19.
  • Pet Services – May set a record for the biggest year over year monthly increase in history. Prices fell in June but began to grow again in July, reaching record highs in Sep>Nov. The November YTD increase of 6.2% is the largest in history. Demand has grown for Pet Services while the availability has decreased, a formula for inflation.
  • Haircuts & Personal Services – The services segments, essential & non-essential were hit hardest by the pandemic. After a small decrease in March, prices turned up again. The YTD rate just passed 2020>21 and is 96% more than 2018>19. Consumers are paying over 15% more than in 2019. This usually reduces the purchase frequency.
  • Total Pet – We have seen basically two different inflation patterns. After 2019, Prices in the Services segments continued to increase, and the rate accelerated as we moved into 2021. The product segments – Food and Supplies, were on a different path. They generally deflated in 2020 and didn’t return to 2019 levels until mid-year 2021. Food prices began a slow increase, but Supplies remained stable until near yearend. In 2022, Food and Supplies prices turned sharply up. Food prices have continued to climb. Supplies prices stabilized Apr>May, grew Jun>Oct, then fell in November. The Services segments have had ups & downs but are generally inflating. The net is a November YTD Petflation increase vs 2021 of 8.8%, ahead of the high 8.1% National rate. In March, it was only 72.5% of the CPI.

Petflation is growing stronger. Will it impact spending? Let’s put it into perspective. The 8.8% current YTD increase in Total Pet is still below the 8.9% record set in 2009 but about 6 times more than the 1.5% avg since then. Pet spending continues to move to higher income groups, but the impact of inflation varies by segment. Supplies is the most affected as many categories are price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a reduction in visit frequency. Spending in the Services segment is driven by higher incomes, so inflation is less impactful. We’ll just have to wait and see the overall impact on Pet Spending of the continued strong Petflation.

2021 U.S. Pet Spending by Generation – Gen X Moves to the Top!

In 2021 Americans spent $99.98B on our companion animals, 1.12% of $8.94 Trillion in total expenditures. Pet Spending was up $16.23B (+19.4%), the biggest increase in history. In 2020 Consumers focused on the necessary segments – Food and Veterinary, while the discretionary segments – Supplies and Services, suffered. Out of fear of shortages, Pet Parents binge bought Food early in the pandemic. On the negative side, closures caused Services to have a radical reduction in frequency. In 2021 there was no repeat of the Food binge so $ fell. However, all other segments had record increases.

In this report we will look at the post pandemic surge in Pet Spending for the most popular demographic measurement – by Generation. Although Gen Z $ are often bundled with Millennials for long term comparisons, we will also compare their 2021 spending vs 2020. Using data from the US BLS Consumer Expenditure Survey we’ll compare the Generations.

We’ll start by defining the generations and looking at their share of U.S. Consumer Units (CUs are basically Households)

GENERATIONS DEFINED

Gen Z: Born after 1996

In 2021, Age under 25

Millennials: Born 1981 to 1996

In 2021, Age 25 to 40

Gen X: Born 1965 to 1980

In 2021, Age 41 to 56

Baby Boomers: Born 1946 to 1964

In 2021 Age 57 to 75

Silent/Greatest: Born before 1946

In 2021, Age 75+

  • Baby Boomers still have the largest number of CU’s at 43.6M and 32.7% of the total. They had a slight increase in 2021 but generally they have been losing ground. In fact, they have 1.5M fewer CU’s than in 2016.
  • The Oldest Generations will continue to lose CUs primarily due to death or movement to permanent care facilities.
  • Gen X has the second most CUs but lost a little ground in 2021.
  • Millennials have the largest number of individuals, but they rank only third in the number of CU’s.
  • Both Gen Z & Millennials gained CUs. The pandemic recovery saw many younger folks leave their parents’ homes.

Now let’s look at some key CU Characteristics

Significant changes were the decrease in homeownership and CU size. This was primarily driven by the oldest group. Gen Xers still have the biggest CUs and the most Earners while Millennials have the most children <18 per CU.

  • CU Size – is down from 2.5 due to a decrease by the Silent/Greatest generations. CUs with 2+ people still account for 69.5% of all U.S. CUs (down from 70.2% in 2020) and 80.6% of pet $ (up from 80.3% primarily due to a huge lift by 2 person CUs). Millennials are actively building their H/Hs. However, CU size, with all the related responsibilities, still peaks with the Gen Xers and then starts dropping. The Boomers are the last group with 2+ CUs but that will end soon. Gen Z joined the 2+ group for the 1st time in 2020 and moved to 2.1 in 2021.
  • # Children <18 – 27.1% of U.S. CU’s have children, down from 27.6% and they generate 31.9% of Pet Spending, down from 38.4%. The slight drop in CUs came from families with an oldest child under 6 or over 18. The drop in Total Pet Spending came solely from an $8B decrease by families with an oldest child over 18. All other CUs, with or without children spent more. The net result was CUs without children spent $16.53B more while those with children spent -$0.3B less. Overall, there was no change in the # of children per CU in 2021 but there was 1 change within groups. Gen X CUs fell from 0.9 to 0.8 in the average number of children <18. We noted the $8B drop in spending with an oldest child over 18. This group is often Baby Boomers.
  • # Earners – Pet spending is often tied to the number of earners in a CU. In 2021, all Earner & No Earner CUs spent more on their pets. 2+ earner CUs still spent the most, but No Earner CUs had the biggest increase, +$6.3B (+60.5%). No Earners are usually older and retired. This includes the oldest Boomers but also the Silent/Greatest generations.
  • Homeownership – Owning and controlling your own space has always been a major factor in increased Pet Ownership and spending. In 2021 homeownership decreased to 64.72% from 65.81%. Gen Z & Millennials had increases but Gen X and the oldest group had decreases. The homeowners share of Total Pet Spending fell from 83.3% to 80.0% due to a -$3.7B drop from those without a mortgage. This is the group that binge bought food in 2020. Homeowners with mortgages and Renters spent $19.9B more on their pets. We should also note that the number of homeowners w/no Mtge was unchanged overall and for Boomers & Gen X. It grew slightly for Gen Z & Millennials but this was offset by a decrease from the Silent/Greatest generations.
    • As expected, Gen Z are the most common renters in society. Homeownership by Millennials has moved up to 49% but it is still only 75% of the national average.
    • Gen Xers have been above the national avg since 2018 and Homeownership continues to increase with age.

Next, we’ll compare the Generations to the National Avg.:

In Income, Total CU Spending, Total Pet Spending and the Pet Share of Total CU Spending

CU National Avg: Income – $87,432; Total CU Spending – $66,906; Total Pet Spending – $748.93; Pet Share – 1.12%

  • Income – The Gen Xers are still at the top but their lead fell slightly. The incomes of Boomers and Silent/Greatest continued to fall. Millennials’ income beat the national average in 2020 and continues to grow. The income of Gen Z passed that of the oldest Americans so they are no longer in last place.
  • Total Spending – The Gen Xers make the most and spend the most but it’s not out of line with their income. Millennials increased their spending so that it now beats the national average. Like their income, Boomers’ spending fell even further below the national average. Due to a big lift in spending in relation to income, the oldest group is once again deficit spending in relation to their after tax income. With continued strong increases in both Income and spending, the retail importance of Millennials is growing.
  • Pet Spending – Again only 2 groups exceed the national average, but Gen X returned to the top spot. Millennials are still 3rd, 24% below Gen X but only 6% below Boomers. The oldest and youngest groups still trail.
  • Pet Spending Share of Total Spending – The national number grew from 1.04% to 1.12%. The growth was driven by increases from all groups but Gen Z and Boomers. In 2020 Boomers were the only group to spend more than 1% of their total expenditures on their pets. In 2021 Boomers are still the leaders but only Gen Z spent less than 1% of their total expenditures on their pets – perhaps the surest sign of the growing importance of the Pet industry.

Now, let’s look at Total Pet Spending by Generation in terms of market share as well as the actual annual $ spent for 2016 through 2021. The 2021 numbers are boxed in red (decrease) or green (increase) to note the change from 2020.

  • Boomers are no longer the biggest force in Pet Spending. Gen X took over the top spot in 2021…barely.
  • The pandemic both continued and broke some long-term spending patterns. Spending in the oldest group is low and had been slowly falling. It surged in 2022. In contrast, the youngest group (combined Millennials & Gen Z) is the only one showing consistent year after year growth. Gen X had also been growing every year… until 2020. They did have the biggest “recovery” in 2021. The Boomers have been on a rollercoaster ride because they are the most likely group to have a strong reaction to trends, especially in this era of super premium foods. They also have the money to act on their feelings. In 2020 this was very apparent as they were the primary group that panic bought Pet Food out of fear of possible shortages due to the pandemic. In 2021 they couldn’t quite equal their 2020 $.
  • In 2021, only Boomers spent less. Silent/Greatest: +$1.31B. Boomers: -1.90B. Gen X: +9.67B. Millennials: +$6.44B. Gen Z: +$0.71B.
  • Boomers – Ave CU spent $764.68 (-36.10); 2021 Total Pet spending = $32.94B, Down $1.90B (-5.5%)
    • 2016>2021: Up $3.33B; They stayed on the roller coaster as spending turned down but is still +10.2% vs 2016.
  • Gen X – Ave CU spent $941.87 (+276.65); 2021 Total Pet Spending = $33.62B, Up $9.67B (+40.3%)
    • 2016>2021: Up $14.28B Their annual Pet spending growth since 2015 had been strong and consistent until a drop in 2020. In 2021 they became #1 in CU Pet spending and Total $. Their spending is up 74% from 2016.
  • Millennials + Gen Z – Ave CU spent $650.97 (+$117.16); 2021 Total Pet Spending = $26.75B, Up $7.15B (+36.5%)
    • 2016>2021: Up $15.31B; As the income and overall spending of Millennials grows, their pet spending has also grown every year. The “youngsters” have the biggest increase in $ since 2016 of any group, $15.31B, +134%.
    • Millennials Only– Ave CU spent $716.51 (+$151.44); 2021 Total Pet Spending= $25.11B, Up $6.44B (+34.5%)
    • Gen Z Only – Ave CU spent $271.27 (+$16.59); 2021 Total Pet Spending= $1.64B, Up $0.71 (+76.9%)
  • Silent + Greatest – Ave CU spent $488.50 (+$134.30); 2021 Total Pet Spending = $6.66B, Up $1.31B (+24.6%)
    • 2016>2021: Down $0.24B; They also had a huge lift in CU pet spending but CU count fell 12.3%, -30% from 2016.

Gen X took over the top spot in Total Pet Spending, but Millennials’ performance was also strong. Only Boomers spent less in 2021, but their CU spending still exceeds the national average. The pet spending “torch” is slowly being passed.

Let’s look at the individual segments. First, Pet Food…

  • Pet Food trends are more pronounced for Boomers, and they had the only decrease. Pet parenting is fading In the older generations, but they finally moved to Super Premium. The younger groups have had more consistent growth.
  • Since 2014, Millennials’ have led the way in food trends, and they are the only group with an annual increase every year since 2016. The panic food buying in 2020 by Boomers was more of an emotional reaction than a trend.
  • Boomers – Ave CU spent $280.45 (-161.61); 2021 Pet Food spending = $11.82, Down $7.49B (-38.8%)
    • 2016>2021: Down $0.1B Big reactions to every trend. They spent less than 2020 and even less than in 2016.
  • Gen X – Ave CU spent $306.27 (+$75.91); 2021 Pet Food spending = $11.12B, Up $2.82B (+34.0%)
    • 2016>2021: Up $4.26B They reacted to the FDA warning by further upgrading their food. No pandemic panic buying for them. They value shopped. In 2021 they surged to the top in CU Pet Food Spending.
  • Millennials + Gen Z – Ave CU spent $191.28 (+$0.26); 2021 Pet Food Spending = $7.86B, Up $0.79B (+11.2%)
    • 2016>2021: Up $3.05B They are the only group with increased spending every year since 2016. Their income is growing as is a commitment to their pets. They often pioneer food upgrades and the pandemic had little impact.
    • Millennials Only – Ave CU spent $206.12 (-$0.82); 2021 Pet Food spending = $7.23B, Up $0.37B (+5.4%)
    • Gen Z Only – Ave CU spent $104.44 (+$51.47); 2021 Pet Food spending = $0.63B, Up $0.42B (+209.0%)
  • Silent/Greatest – Ave CU spent $262.00 (+$114.43); 2021 Pet Food spending = $3.61B, Up $1.44B (+66.1%)
    • 2016>2021: Up $0.57B; Their CU #s are fading but they are committed to pets as they upgraded food in 2021.

Pet Food Spending is driven by trends – new Super Premium Foods, FDA warnings and even fear of pandemic shortages. Millennials lead in thoughtful changes and Boomers lead in emotion but Gen X leads in CU $.   Now, Supplies Spending.

  • All groups spent more but Gen X increased their lead at the top with a 71% spending increase.. The younger groups dominate this segment as Gen Xers and Millennials/Gen Z together account for 68% of Supplies spending.
  • Gen X – Ave CU spent $265.43 (+$112.96); 2021 Pet Supplies spending = $9.40B, Up $3.91B (+71.2%)
    • 2016>2021: Up $4.15B; Gen Xers are again the leader in CU spending. They were affected by tarifflation in 2019, but essentially held their ground in 2020. In 2021 spending exploded as they made up for 2019 & 2020.
  • Baby Boomers – Ave CU spent $154.03 (+$52.18); 2021 Pet Supplies spending = $6.72B, Up $2.31B (+52.3%)
    • 2016>2021: Up $0.35B In 2019 tarifflation hit. In 2020 they focused on Food! In 2021 they made it back to 2018 $
  • Millennials + Gen Z – Ave CU spent $165.99 (+$42.23); 2021 Pet Supplies spending = $6.82B, Up $2.30B (+50.8%)
    • 2016>2021: Up $4.01B; Millennials earn their share in Supplies spending. They were the least impacted by the tariffs in 2019 and spent more in 2020. Their spending then took off in 2021, with a 53% increase.
    • Millennials Only– Ave CU spent $180.37 (+$55.32) 2021 Pet Supplies spending= $6.32B, Up $2.20B (+53.3%)
    • Gen Z Only – Ave CU spent $82.95 (-$28.97); 2021 Pet Supplies spending = $0.50B, Up $0.10B (+25.4%)
  • Silent + Greatest – Ave CU spent $64.27 (+$16.52); 2021 Pet Supplies spending = $0.87B, Up $0.13B (+18.0%)
    • 2016>2021: Down $0.63B; This $ conscious group was hit hard by tariffs and the pandemic, but had a small lift.

In 2016 most Consumers value shopped for super premium food and spent some of their savings on Supplies. Supply prices dropped in 2017 and everyone under 72 spent more! Late 2018 saw added tariffs but only Boomers dialed back spending. In 2019 the sharply rising prices drove spending down in all groups. In 2020 Millennials and Gen X spent a little more while the older groups spent a lot less. In 2021 spending took off in all groups as they made up for recent years.

Next, we’ll turn our attention to the Service Segments. First, Non-Veterinary Pet Services

  • Gen Z & the oldest group spent less. Gen X is still #1 in CU spending and $. Gen X/Millennial/Gen Z share = 62.5%
  • Gen X – Ave CU spent $91.64 (+$21.66); 2021 Pet Services spending = $3.25B, Up $0.72B (+28.7%)
    • 2016>2021: Up $1.52B; In 2020 they had the 2nd biggest drop. In 2021 they had the 2nd biggest lift but are still #1.
  • Baby Boomers – Ave CU spent $70.06 (+$19.46); 2021 Pet Services spending = $3.06B, Up $0.86B (+39.5%)
    • 2016>2021: Down $0.15B; The biggest $ drop in 2020 and the biggest lift in 2021, but they’re still behind 2016 $.
  • Millennials + Gen Z – Ave CU spent $59.51 (+$11.43); 2021 Pet Services spending = $2.45B, Up $0.69B (+39.1%)
    • 2016>2021: Up $1.32B; In 2020 they had the smallest decrease of any group and with the 2021 lift they have more than doubled their 2016 spending. Despite a 31% increase in CUs Gen Z’s Services spending fell.
    • Millennials Only– Ave CU spent $66.61 (+$17.09); 2021 Pet Services spending = $2.33B, Up $0.70 (+42.9%)
    • Gen Z – Ave CU spent $18.53 (-$16.39); 2021 Pet Services spending = $0.11B, Down $0.01B (-10.2%)
  • Silent + Greatest – Ave CU spent $26.29 (-$1.29); 2021 Pet Services spending = $0.35B, Down $0.07B (-16.4%)
    • 2016>2021: Down $0.42B; They definitely have the need but spending continues to fall, down 55% from 2016.

This segment had slow annual growth until 2017 which saw a small drop in spending due to an extremely competitive environment. In 2018, the increased number of outlets really hit home and spending exploded. 2019 brought another small decrease as Gen Xers & Millennials looked for and found a better deal. 2020 brought pandemic restrictions and closures. 2021 produced a record lift due to a 9.2% increase in spending and an 18.8% increase in frequency.

Now, Veterinary Services

  • Boomers are still the biggest spenders in this segment, but they only lead Gen Xers in $ because of more CUs.
  • The younger groups have a consistently growing commitment to this Pet Parenting responsibility. The combined Veterinary spending of Millennials/Gen Z and Gen Xers has increased $11.29B (+138%) since 2016.
  • Boomers – Ave CU spent $260.14 (+$53.87); 2021 Veterinary spending= $11.35B, Up $2.41B (+27.0%)
    • 2016>2021: Up $3.24B; In 2020, Boomers focused on needed segments – Food & Veterinary. In 2021 they changed their focus to Supplies, Services and Veterinary, including a Veterinary spending increase of $2.4B.
  • Gen X – Ave CU spent $278.53 (+$66.12); 2021 Veterinary spending= $9.86B, Up $2.21B (+28.9%)
    • 2016>2021: Up $4.37B; In 2016 their Veterinary spending exceeded the national CU Average. In 2018, they took over the top spot in CU spending and increased their lead in 2021. This produced a $2.2B lift in Veterinary $.
  • Millennials + Gen Z– Ave CU spent $234.18 (+$63.24); 2021 Veterinary Spending $9.62B, Up $3.38B (+54.0%)
    • 2016>2021: Up $6.92B; They had the biggest lift and spending is up 256% from 2016. Veterinary is a big priority.
    • Millennials Only – Ave CU spent $263.41 (+$79.85); 2021 Veterinary spending = $9.23B, Up $3.18B (+52.5%)
    • Gen Z Only – Ave CU spent $65.35 (+$10.48); 2021 Veterinary spending = $0.40B, Up $0.20B (+101.5%)
  • Silent + Greatest – Ave CU spent $135.94 (+$4.64); 2021 Veterinary spending $1.83B, Down $0.19B (-9.2%)
    • 2016>2021: Up $0.02B; Their pets’ health is still a priority. Spending fell due to a 12.3% decrease in CUs.

Gen Xers and Millennials have consistently increased their commitment to Veterinary Services. Back in 2015, their share of Veterinary Spending was 36%. It is now 60%. This indicates a big, fundamental change in spending behavior.

One last chart to compare the share of spending to the share of total CU’s to see who is “earning their share”.

  • Gen X Performance – Total: 126.9%; Food: 121.9%; Supplies: 149.0%; Services: 134.5%; Veterinary: 113.9%
    • Gen Xers returned to the top spot in performance. This year they earned their share in Total Pet and all industry segments. Except for the 2020 dip they increased their Total Pet Spending every year since 2016. In 2021 they made up for the dip with a big increase in every segment. Their spending has become more balanced and they are now the performance leader in every segment. Gen Xers range in age from 41 to 56 so they are just entering the peak earning years. Expect their commitment and pet spending to continue to grow.
  • Baby Boomers Performance – Total: 100.9%; Food: 105.2%; Supplies: 86.4%; Services: 102.8%; Veterinary: 106.4%
    • Boomers led the way in building the industry but are no longer the “top dogs” in $. They earn their share in all but Supplies and are still the spending leader in the “needed” segments – Food & Veterinary. They are also the most emotional Pet Parents, so their spending is subject to radical swings like 2020’s panic, binge buying of Pet Food. They should still be a major force in the Pet Industry for many more years, but the Gen Xers have now stepped up and the Millennials are also preparing to eventually take their turn at the top.
  • Millennials Performance – Total: 95.8%; Food: 80.2%; Supplies: 101.2%; Services: 97.8%; Veterinary: 107.7%
    • Millennials are now the only group to have increased their pet spending every year since 2016. Their spending is more evenly balanced, and performance has improved but their future as the Pet Parenting spending leaders is still a long way off. Their income, home ownership and pet spending are all increasing. They are educated and well connected. Indications are that they may lead the way in adopting new trends, especially in food. Their progress is good news, but in reality, their leadership is probably at least a decade away.
  • Silent/Greatest Performance – Total: 66.1%; Food: 104.1%; Supplies: 36.1%; Services: 38.6%; Veterinary: 55.6%
    • Pet Parenting is more challenging in old age, but they remain committed. 1.09% of their total spending is on pets.
  • Gen Z Performance – Total: 36.1%; Food: 40.1; Supplies: 46.6%; Services: 27.2%; Veterinary: 26.7%
    • They are just beginning so the numbers are low. Their performance actually fell due to a 31% increase in CUs.

Baby Boomers are still the heart of the industry, but Gen Xers are now the $ leaders. Expect Gen X’ growth to continue as they are pursued by Millennials. Both groups seem ready, willing and able to take their turn at the top. Pet Spending has become more balanced across the generations. This bodes well for the continued strong growth of the industry.

 

2021 U.S. TOTAL PET SPENDING $99.98B…Up ↑$16.23B

In 2021 Total Pet Spending in the U.S. was $99.98B, a $16.23B (19.4%) increase from 2020. Pet Food spending fell because there was no binge buying in 2021. However, spending in the other segments skyrocketed producing the industry’s biggest increase in history. Pet Parents began to use Pet Services again, got all of the Vet services that their “children” needed and bought all the supplies that they had been putting off during the pandemic.

  • A $2.44B (-6.6%) decrease in Food
  • A $8.65B (+57.0%) increase in Supplies
  • A $7.82B (+31.5%) increase in Veterinary
  • A $2.21B (+32.0%) increase in Services

Let’s see how these numbers blend together at the household (CU) level. Weekly, 24.4 million CU’s (1/5) spent $ on their Pets – food, supplies, services, veterinary or any combination – up from 22.5M in 2020 but down from 27.1M in 2019.

In 2021, the average U.S. CU (pet & non-pet) spent a total of $748.93 on their Pets. This was a +17.4% increase from the $637.78 spent in 2020. However, this doesn’t “add up” to a 19.4% increase in Total Pet Spending. With additional data provided from the US BLS, here is what happened.

  • 1.8% more CU’s
  • Spent 9.5% more $
  • 7.1% more often

If 68% of U.S. CU’s are pet parents, then their annual CU Total Pet Spending was $1101.37. Now, let’s look at the recent history of Total Pet Spending. The rolling chart below provides a good overview. (Note: All numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Surveys – The 2016>2021 Totals include Veterinary Numbers from the Interview survey, rather than the Diary survey due to high variation)

  • We should note a 3-year pattern since 2010. 2 years of increases followed by a small decrease.
  • In 2014-15, the Super Premium Food upgrade began, with the biggest lift coming in 2015.
  • In 2016, they were intensely value shopping for super premium foods. They started spending some of this saved money on Supplies and Veterinary Services, but not quite enough as spending fell slightly for the year.
  • In 2017, spending took off in all but Services, especially in the 2nd half. Consumers found more $ for their Pets.
  • In 2018 a spectacular lift in Services overcame the FDA issue in Food, tariffs on Supplies and inflation in Veterinary.
  • In 2019 a bounce back in Food and small lift in Veterinary couldn’t overcome the drop in Supplies from “tarifflation”.
  • In 2020 consumers focused on necessities, Food & Veterinary (+$8.7B) while Services & Supplies suffered (-$3.4B).
  • In 2021 there was no Food binge but in all other segments consumers made up for all the lost ground…and more!

Now we’ll look at some Demographics. First, 2021 Total Pet Spending by Income Group

Only the $100>149K income group spent less, but $150K> accounted for 87% of the record $16.23B increase.

Nationally: · Total Pet: $16.23B   · Food: ↓$2.44B  · Supplies: ↑$8.65B  · Services: ↑$2.21B  · Veterinary: ↑$7.82B

  • < $70K(55.2% of U.S. CUs); CU Pet Spending: $430.09, +6.3%; Total $: $31.77B, $1.86B (+6.2%) ..
    • Food ↓$0.09B
    • Supplies ↑$1.63B
    • Services ↑$0.17B
    • Veterinary ↑$0.15B
    • Money matters a lot to this group. In the pandemic they focused on Pet needs, especially Veterinary. In 2021 they spent less on food but more in all other segments, especially Supplies and they beat their previous $ high in 2017.
  • >$70K – (44.8% of U.S. CUs); CU Pet Spending: $1143.31, +22.0%; Total $: $68.21B, $14.37B (+26.7%) from…
    • Food ↓$2.35B
    • Supplies ↑$7.02B
    • Services ↑$2.04B
    • Veterinary $7.67B
    • This group continues to grow, up 4.9% in 2021. They accounted for 88.5% of the spending increase. However, it is more complicated. The $70>99K & $150K> groups had big increases, including lifts in all segments. The $100>149K had a big drop in Food because they binge bought in 2020 which turned their Total Spending down.
  • < $30K(25.5% of U.S. CUs); CU Pet Spending: $335.90, +7.0%; Total $: $11.26B, $1.07B (+10.5%) from…
    • Food $0.05B
    • Supplies ↑$0.69B
    • Services ↑$0.11B
    • Veterinary $0.21B
    • This lowest income group has had relatively stable spending in recent years but they remain committed to their pets. They spent more in all segments, especially Supplies & Veterinary, and beat their previous $ record in 2017.
  • $30>$70K – (29.7% of CUs); CU Pet Spending: $509.14, +6.7%; Total $: $20.51B, $0.79B (+4.0%) from…
    • Food ↓$0.14B
    • Supplies $0.94B
    • Services ↑$0.06B
    • Veterinary ↓$0.07B
    • Due to a big lift in Supplies they managed to eke out a small  increase. The small drop in Veterinary spending comes after a 23% increase in 2020. By the way, they too set a $ record, barely – $20.51B over $20.46B.
  • $70>$99K – (14.8% of CUs); CU Pet Spending: $794.91, +43.8%; Tot $: $15.74B, $5.10B (+48.0%) from…
    • Food $2.45B
    • Supplies ↑$0.86B
    • Services ↑$0.22B
    • Veterinary $1.57B
    • 2020 had double digit % drops in every segment. In 2021, all were up 26+%. A big turnaround for middle income.
  • $100K>$149K– (14.2% of CUs); CU Pet Spend: $977.96, -21.1%; Tot $: $18.50B, ↓$4.87B (-20.8%) from…
    • Food ↓$8.92B
    • Supplies ↑$1.59B
    • Services ↑$0.67B
    • Veterinary $1.80B
    • They were the group leader in 2015 & 2017. In 2016, they were the worst performers. In 2018/2019 their Total $ were stable. In 2020 they drove most of the Food binge buying. In 2021 they had strong lifts in Supplies, Services & Veterinary but a huge drop in Food turned Total $ down. They are reactive and have the money to take action.
  • $150K> – (15.8% of CUs); CU Pet Spending: $1621.19, +56.0%; Total $: $33.98B, $14.14B (+71.3%) from…
    • Food $4.12B
    • Supplies ↑$4.57B
    • Services ↑$1.15B
    • Veterinary $4.30
    • In 2020, the $150>199K group drove the overall spending in the highest income group down for the 1st time in my records going back to 2013. In 2021 they were spectacular. Both the $150>200K & $200K> groups had double digit increases in all segments and they generated 87% of the Total Industry Increase. This demonstrates the growing importance of higher income CUs to the Pet Industry. FYI – The $200K> group has 8.6% of CUs but generates 20.6% of all Pet $ and their 2021 increase was $9.0B, 55.5% of the $16.23B record lift.
  • < $100K – (70.0% of CUs); CU Pet Spending: $507.21, +16.5%; Total $: $47.50B, $6.96B (+17.2%)
    • Food $2.36B
    • Supplies ↑$2.49B
    • Services ↑$0.39
    • Veterinary $1.72
    • A spending sandwich, heavily loaded on the top.  <30K: +$1.07B; $30>49K: -$1.90B; $50>99K: +$7.79B
  • >$100K – (30.0% of CUs); CU Pet Spending: $1316.02, +16.7%; Total $: $52.48, $9.27B (+21.5%) from…
    • Food ↓$4.80B
    • Supplies ↑$6.16B
    • Services ↑$1.82B
    • Veterinary $6.10B
    • We added the over/under $100K measurement last year because $100K> exceeded 50% of the $ for the 1st time. Their lead is growing. However, you see that the big Food $ drop by $100>149K still had a major impact.

Income Recap –  The top 2 drivers in consumer spending behavior are value (quality + price) and convenience. That makes income , especially disposable income very important in Pet Spending. We also often see motivation brought by new product development. In 2020 we saw the results from perhaps the biggest human motivator – fear. This was the driver in the pandemic binge buying of pet food. The key results were the big drop from $70>99K and the huge lift from $100>149K. This helped drive the 50/50 $ divide up to $103K, a huge change from $94K in 2019. 2021 brought a record lift and record spending in all segments but Food. This increase was driven by the highest income groups, over $150K. The 50/50 spending divide moved up to $107K as CU income continues to grow in importance in Total Pet Spending.

Next let’s look at 2021 Total Pet Spending by Age Group

Only the 55>64 year-olds spent less. Everyone else spent more.

Nationally: · Total Pet: $16.23B   · Food: ↓$2.44B  · Supplies: ↑$8.65B  · Services: ↑$2.21B  · Veterinary: ↑$7.82B

  • <25 – (4.9% of U.S. CUs); CU Pet Spending: $269.75, -4.7%; Total $: $1.79B, $0.35B (+24.2%) from…
    • Food $0.27B
    • Supplies ↓$0.03B
    • Services ↑$0.02B
    • Veterinary $0.09B
    • The increase came from a 31% gain in CUs as a huge number moved out of their parents’ home.
  • 25-34 – (15.7% of U.S. CUs); CU Pet Spending: $701.04, +19.5%; Total $: $14.90B, $2.48B (+20.0%) from…
    • Food $0.12B
    • Supplies ↑$0.93B
    • Services ↑$0.17B
    • Veterinary $1.26B
    • These Millennials have often led the way in new food trends. In 2020 they stepped up in the pandemic and the lift continued into 2021, with spending increases in all segments & 20% overall.
  • 35-44 – (17.2% of CUs); CU Pet Spending: $937.83, +57.7%; Total $: $21.39B, $8.10B (+60.9%) from…
    • Food $1.24B
    • Supplies ↑$4.00B
    • Services ↑$0.78B
    • Veterinary $2.08B
    • They have the largest families and are building their careers, so they are very sensitive to and cautionary in times of change. In 2020, they had double digit % decreases in all but Supplies. In the 2021 recovery they spent more in all segments, had the biggest increase of any age group and moved to the top in Total Pet CU $pending.
  • 45-54 – (16.7% of U.S. CUs); CU Pet Spending: $828.19, +19.9%; Total $: $18.51B, $3.03B (+19.6%) from…
    • Food $1.12B
    • Supplies ↑$0.85B
    • Services ↓$0.02B
    • Veterinary $1.08B
    • This group has the highest income and occupied the top spot in Pet Spending in 2018. In 2019 & 2020 their spending and rank fell. In 2021, except for a minor decrease in Services $ due to fewer CUs, they spent substantially more on their pets. They fell to 3rd place in Total Pet spending but at a record level.
  • 55-64 – (18.5% of U.S. CUs); CU Pet Spending: $849.56, -11.7%; Total $: $20.95B, ↓$3.20B (-13.3%) from…
    • Food ↓$7.89B
    • Supplies ↑$1.73B
    • Services ↑$0.75B
    • Veterinary $2.20B
    • 90% are still younger Baby Boomers and they are especially reactive. They were the primary drivers behind the 2020 binge spending on Pet Food. In 2021 they turned their attention to the other segments with a $4.7B increase in spending. However, it didn’t make up for the $7.9B drop in Food $.
  • 65-74 – (16.1% of U.S. CUs); CU Pet Spending: $711.22, +20.1%; Total $: $15.14B, $2.91B (+23.8%) from…
    • Food $0.93B
    • Supplies ↑$0.83B
    • Services ↑$0.39B
    • Veterinary $0.75B
    • This group is growing, +5.1% and are all Baby Boomers. They are careful with their money, but their commitment to their pets is very apparent. They spent more in all segments in 2021 and are the only other age group besides the 25>34 yr-olds to spend more in both 2020 and 2021.
  • 75> – (10.9% of U.S. CUs); CU Pet Spending: $504.45, +54.7%; Total $: $7.30B, $2.57B (+54.4%) from…
    • Food $1.76B
    • Supplies $0.34B
    • Services $0.12B
    • Veterinar ↑$0.34B
    • Pet Parenting is more difficult, and money is tight for these oldest Pet Parents, but their commitment is still there. They had a 10% decrease in 2020 due to drops in Supplies & Services. In 2021 they came back strong with increases in all segments and the 2nd highest % increase of any age group.

Age Group Recap: In 2020 the age spending pattern in Total Pet matched Pet Food. It was generational, Boomers and Millennials spent more. Everyone else spent less. In 2021 it was radically different. Except for the 55>64 group’s big drop in Food and 2 other decreases of $0.03B or less, every age group spent more in every segment. Almost a universal lift.

Next, we’ll take a look at some other key demographic “movers” in 2021 Total Pet Spending. The segments that are outlined in black “flipped” from 1st to last or vice versa from 2020. The red outline stayed the same.

In 2021, 80 of 96 Demographic Segments (83%) spent more on their Pets. In 2020 only 46 segments (48%) spent more. That’s a huge improvement. However, it came with a lot of turmoil. 16 of the 24 segments (2/3) flipped from 1st to last or vice versa from 2020. Last year only 6 flipped. 10 of the 16 flipped to the bottom. Invariably, they binge bought pet food in 2020 and “paid for it” in 2021. Only 1 segment held its position. White, Not Hispanic stayed on top. This is not unexpected. They are perennial winners. You also see huge increases. 7 are over $10B. Despite the big drops in Pet Food $ by the losers, 9 of the drops are far smaller than the increases. There are 2 exceptions – Married, Oldest child over 18 and Self-Employed. Both binge bought Pet Food in 2020 but their 2021 increases in the discretionary segments were small. We should also note that in the # of Earners category, all segments spent more. In 2020, all Racial/Ethnic groups spent more.  Let’s look at some specifics.

9 of the winners are the usual “suspects” with the only surprises being Retirees and No Earner, 2+ CUs. 35>44 is not usual, but they do have the 2nd highest income in the Age Category. In fact, 8 winners rank 1st or 2nd in income in their category, which is more evidence of the growing importance of income in Total Pet Spending.

10 of the 12 “losers” in 2021 had at least a $7B increase in Pet Food spending in 2020 and flipped from 1st to last in 2021. African Americans also spent 48% more on Pet Food in 2020 and gave it all back in 2021 but their Pet Spending is so small that it is often overlooked. In the # of Earners category, the only 2020 Food Binge Buying came from 2 Earner CUs. All segments obviously did well in 2021 with at least a $1.1B increase. By the way African Americans and 1 Earner Singles both have CU incomes at least 30% below the National Average.

Recap: After a slight downturn in 2019, Pet Spending turned up in 2020. There is no doubt that the onset of the COVID-19 pandemic was the major factor in the turnaround. It produced mixed results among the industry segments. Services took a big negative hit due to restrictions and closures in nonessential outlets. Consumers, including Pet Parents, focused their attention and spending on the most needed Products and Services. In the Pet Industry this resulted in a 10% drop in Supplies $ but strong lifts in spending for Veterinary Services and especially Pet Food. The Pet Food $ were even stronger because Pet Parents feared possible shortages like what happened to many other essential products. This caused some very select demographics to binge buy an extra $6.77B in the 1st half of 2020. That brought us to 2021 which became the strongest year in history. 2020 Food Binge buying didn’t increase the usage rate and obviously wasn’t repeated in 2021. However, Pet Parents spent a lot of time with their Pet “Children” during the pandemic. This caused them to have an even better understanding of what was needed to better improve the lives of their pets and strengthen the human animal bond between them. In 2021 virtually all Pet Parents decided to fill those wants and needs. The result was a record increase in Total Pet and in all segments but food which also produced annual spending records. Although 83% of all segments spent more, the higher their income, the more they spent.

2021 U.S. VETERINARY SERVICES SPENDING $32.67B…UP ↑$7.82B

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 annual growth +1.3%). In late 2020 & 2021, COVID focused Pet Parents on their “children’s” needs, including Veterinary Services. In 2021 Veterinary Spending reached  $32.67B, up $7.82B (+31.5%) from 2020. Inflation was high at 4.2% but 87% of the growth was real. In this report, we’ll take a closer look at the demographics behind the 2021 numbers. (Note: All 2021 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 exceptionally high variation on the data collected by the Diary method. Interview seems to be a more logical and accurate way to track Veterinary Service Expenditures.)

Let’s get started. Veterinary Spending per CU in 2021 was $244.51 up 29.1% from $189.35 in 2020. (Note: A 2021 Pet CU (68%) Spent $359.57) More specifically, the increase in Veterinary spending came as a result of:

  • 1.8% more CU’s
  • Spending 11.9% more $
  • 15.4% 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 coincided with the upgrade to Super Premium Foods – Trading $. Then consumers began value shopping for Premium Foods and the savings freed up $ for Veterinary Services. Spending began to climb until it flattened out at the beginning of 2017. In 2017, inflation slowed markedly in the second half and spending took off. In 2018 prices turned up again and consumers essentially held their ground through 2019. The initial reaction to COVID in 2020 was a drop in spending but the “need focused” consumers then drove a huge increase through 2021.

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

Veterinary Spending has become even more strongly driven by income. Spending by the <$70 group was essentially flat and $30>70K actually spent less. By far the biggest lift, +$4.3B, came from $150K> group. The 50/50 spending break point in $ also grew significantly from $96K in 2020 to $113K in 2021, an 18% increase.

National: $244.51 per CU (+29.1%) – $32.67B – Up $7.82B (+31.5%)

  • Over $150K (15.8% of CUs) – $534.38/CU (+42.3%) $11.26B, Up $4.30B (+61.8%) This highest income group is the biggest Veterinary Spender as 15.8% of CUs generated 34.5% of 2021 $ and 55% of the increase from 2020.
  • $100>150K (14.2% of CUs) – $360.90/CU (+34.9%) $6.84B, Up $1.80B (+35.6%) Spending by this middle/upper income group slowed in 2019 due to inflation, but it took off in 2020>21 as they reacted strongly to their pet needs.
  • $70K>100K (14.8% of CUs) – $268.25/CU (+41.0%) $5.31B, Up $1.57B (+41.9%) Spending grew steadily from 2016>19. In 2020 pandemic monetary pressures caused them to spend less but they had a strong rebound in 2021.
  • $30K>70K (29.7% of CUs) – $152.41/CU (+1.8%) $6.04B, Down $0.07B (-1.1%) From 2016 to 2020 their spending 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. They also fell from 2nd to 3rd in total Veterinary spending.
  • Under $30K (25.5% of CUs) $94.06/CU (+4.9%) $3.21B, Up $0.21B (+7.2%) This group is very price sensitive. Except for a big spending dip in 2018, they have slowly but consistently increased Veterinary spending. They are now 32% ahead of their 2016 Veterinary Services $, although 56% of the increase was due to inflation.

Now, here is Veterinary Spending by Age Group

Every group spent more but the biggest lifts came from the 55>64 & 35>44 groups. Both spent $2+B more than in 2020.

National: $244.51 per CU (+29.1%) – $32.67B – Up $7.82B (+31.5%)

  • <25 (4.9% of CUs) – $63.90/CU (-2.2%) $0.42B – Up $0.09B (+28.2%) The biggest factor in the lift by this youngest group was that they moved out of their parents homes. 31.1% more CUs spent 2.5% more $ …4.6% less often.
  • 25>34 (15.7% of CUs) – $237.68/CU (+33.5%) – $5.00B – Up $1.26B (+33.7%) The commitment of these Millennials to their pets is growing. After being stable from 2017>19, the pandemic caused Veterinary spending to take off In 2020 and the lift continued in 2021 due to increased frequency. 0.2% more CUs spent 4.2% more $ …28.2% more often.
  • 35>44 (17.2% of CUs) – $285.97/CU (+42.6%) – $6.55B – Up $2.08B (+46.5%) In 2019, these mostly Gen Xers radically increased their spending and became #1 in Veterinary $. In 2020 spending decreased and they fell to 3rd place. In 2021 they had the biggest % increase and moved up to #2. 2.8% more CUs spent 16.0% more $ …22.9% more often
  • 45>54 (16.7% of CUs) – $273.46/CU (+23.4%) – $6.09B – Up $1.08B (+21.6%) 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 the top spot in Veterinary $. 2020 brought a big spending lift which continued into 2021. However, their 2021 increase didn’t match the 35>44 & 54>64 groups so they fell to #3. 1.5% fewer CUs spent 16.3% more $…6.1% more often
  • 55>64 (18.5% of CUs) – $309.26/CU (+42.4%) – $7.65B – Up $2.20B (+40.4%) 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 their frequency fell but they spent a lot more, so they moved back to the top in Veterinary Spending. They maintained this position in 2021 due to a more balanced increase in both the amount and frequency of purchases. 1.4% fewer CUs spent 22.8% more $ …15.9% more often
  • 65>74 (16.1% of CUs) – $225.67/CU (+12.7%) – $4.85B – Up $0.75B (+18.4%) This group is growing and is now all Boomers so they are committed to their pets. In 2020 their visit frequency fell due to the pandemic, but they spent 37% more $. In 2021 they spent 5% less but much more often. 5.1% more CUs spent 5.1% less $ …18.8% more often
  • 75> (10.9% of CUs) – $144.36/CU (+21.4%) – $2.10B – Up $0.34B (+19.6%) This group of oldest Pet Parents has a strong commitment to their pets – in 2015 a $1B increase in Veterinary Spending. In 2016, they upgraded their food. In 2017 they increased spending in Food, Supplies and Services. In 2018, they turned their attention back to Veterinary and their spending has grown every year. Although the pandemic hit them hard, they still took care of their pets with increased Veterinary spending through 2021. 1.4% fewer CUs spent 14.3% more $…6.2% more often

Now, let’s take a look at some other key demographic “movers” behind the 2021 Veterinary Spending numbers.

Veterinary spending increased by $7.82B (+31.5%) in 2021. Even with a high 4.2% inflation rate, 87% of the growth was real. 2021 had widespread positivity. 90 of 96 demographic segments (93.8%) spent more on Veterinary Services while only 6 segments spent less. In 9 categories all segments spent more. There was also less turmoil as only 3 flipped from first to last or vice versa while 8 segments maintained their position from 2020.

Virtually all of the “winners” are often found at the top. The only one that is somewhat of a surprise is Millennials, but in recent years they have become more concerned about Veterinary care for their Pet “children”. Their income exceeded the national average for the 1st time in 2020 and continues to grow so they are more able to afford the ever inflating cost of Veterinary Services.

There are also no big surprises in the “losers” group. The surprise is, and it’s a big one, that 9 of the 12 “losers” earned their spot at the bottom because they had the smallest spending increase in their category. That is very real proof of just how great 2021 was for the Veterinary Segment.

In our earlier analysis we saw that the increase was widespread across Income and Age groups. All age groups spent more and only 1 income group, $30>69K spent less and it was only -1.1%. In fact, the drop by the $30>69K group was driven by those with an income from $30>49K. The $50>69K segment had a 42% spending increase. The lift was widespread beyond Age and Income. In 9 categories all segments spent more. Besides the income category only Generations and CU composition had any segments that spent less on Veterinary Services. The segments were Single Parents and the Silent/Greatest Generations. This is not a surprise as both have low incomes and high life pressures

In recent years there had been a strong youth movement in Veterinary Spending from the <45 crowd. That changed in 2020 as the 45> groups accounted for 94% of the segment’s $3B increase. In 2021 the older crowd held on but their share of the record $7.8B increase fell to 56% – a little more balanced.

Generations is still the most popular demographic measurement. Baby Boomers fueled the growth of the Pet Industry and are still the leaders in Food and Veterinary $. However, in 2021 big increases in Services and Supplies pushed Gen X to the top in Total Pet $. Boomers have led the way in Veterinary $ for years but their lead is narrowing. As recently as 2017 their Veterinary spending was greater than all of the younger generations combined. In 2021 the younger groups spent 72% more than the Boomers. Boomers will remain a force in the industry for years to come. but the “torch” is slowly but surely being passed as Veterinary and Total Pet spending becomes demographically widespread.

Petflation 2022 – October Update: Prices increase to +11.6% above 2021

Inflation continues to make headlines. There have been year over year increases in the monthly Consumer Price Index (CPI) larger than we have seen in decades. October prices rose 0.4% from September, and the CPI was still up +7.7% vs 2021, but down from +8.2% last month. The grocery price surge slowed a little but they’re still up 12.4% over 2021. That’s 8 straight months of double-digit YOY monthly percentage increases. These are the first 10+% increases since 1981. As we have seen in recent years, 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.

Total Pet prices were 4.1% higher in December 2021 than in December 2020, while the overall CPI was up 7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June. National inflation has slowed since July, but Petflation has increased, passing the National rate in July and is +11.6% in October, 50.6% higher than the national rate of 7.7%. We need to look a little deeper into the numbers. This and future reports will include:

  • A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
  • Monthly comparisons of 22 vs 21 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month
    2. Inflation changes for recent years (20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2022 vs 2019
    4. Average annual Year Over Year inflation rate from 2019 to 2022
  • 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 October 2020 to October 2022. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus those from 12 and 24 months earlier are included as are the year-end numbers for 2020 & 2021.This will give you some key waypoints for comparisons. (Note: Some key peaks and valleys are also highlighted.)

The pandemic hit home in 2020. In October, the national CPI was only +1.3% and Pet prices were down -0.4%. There are 2 different patterns between the Services and the Products segments. Veterinary and Services prices generally inflated after mid-2020, similar to the overall CPI. Food and Supplies prices generally deflated until late 2021. After that time, Petflation took off. Pet Food prices consistently increased but the other segments had mixed patterns until July, when all increased. In August>October Petflation accelerated, except for a miniscule dip in Veterinary last month.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul/Aug 2022. 43% of the overall 16.0% increase since 2019 happened from Jan>June 2022.
  • Pet Food – Prices stayed generally below December 2019 levels from April 2020 to September 2021, when they turned up. There was a sharp increase in December but 90% of the 15.6% increase has happened since January.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022 when they turned sharply up reaching a new all-time pricing high in January, beating the 2009 record. Prices plateaued from February> May but turned up in June. The CPI flattened in July but turned up in Aug>Oct.
  • Pet Services – Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in Mar>June. It has turned up again July>Oct.
  • Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December which put them above the overall CPI. In May prices fell and stabilized in June. Prices turned up again and despite an October dip they have been above the National CPI since July.
  • Total Pet – The blending of the different segment patterns made Total Pet appear calm. In December 2021 prices surged in all. The segments had mixed up & downs Mar>Jun but Total Petflation has accelerated since July.

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’ve added some human categories to put the pet numbers into perspective.

Overall, Prices were up 0.4% vs September but were up 7.7% vs October 2021. The Grocery increase is down to 12.4% which is still a big negative but there is another area of concern. Only 2 of 9 categories had increases over 1% from last month, but both are “Pet”. The National CPI rate is slowing but Petflation, especially in Food & Supplies, is getting worse.

  • U.S. CPI– Prices are up 0.4% from August. The YOY increase is +7.7%, down from the 9.1% peak in June. The targeted inflation rate is <2% so we are still 4 times higher than the “target”. However, a 4th slight decline is good news.
  • Pet Food– Prices are +1.0% vs September and 15.0% vs Oct 21. They are now 21% higher than the Food at Home inflation rate – not good news! The YOY increase is being measured against a time when prices were essentially at 2019 levels, but that increase is still over 4 times the pre-pandemic 3.7% increase from 2018 to 2019.
  • Food at Home – Prices are up 0.5% from September. The increase from 2021 is 12.4%, down slightly from 13.0% last month. Inflation for this category since 2019 is the highest on the chart and is 46% more than the national CPI.
  • Pets & Supplies – Prices grew 1.4% from September, the biggest increase of any segment. However, they stayed in 3rd place in terms of monthly increase over 2021 for pet segments and still have the lowest increase since 2019.
  • Veterinary Services – October prices fell -0.03% from September. They are +11.1% from 2021 and trail only Food in the Pet Industry. They also remain 2nd in the increase since 2019 with 19.5% compared to Food at home at 23.1%.
  • Medical Services – Prices sharply increased at the start of the pandemic in 2020 but then inflation slowed and fell to a low rate in 2021. In October prices dipped but 2022 prices are still 6% above the pre-pandemic 2018>19 rate.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021/22. October prices are +0.7% from September and +6.3% vs 2021, reaching another new record high.
  • Haircuts & Other Personal Services – Prices are +0.2% from Sep. and +5.6% from 2021. They are +15.8% since 2019.
  • Total Pet– Petflation is strong, 3 times the rate of last year and is 50.6% ahead of the National CPI. All but Veterinary increased prices in October, but inflation is still primarily being driven by Food & Veterinary. Inflation can cause reduced purchase frequency in Supplies, Services and Veterinary. Super Premium Food has been generally immune as consumers are used to paying a lot and it is needed every day. We’ll see if consumers are willing to pay the new high prices for food and buy the more discretionary products/services at the same frequency as they did in the past.

Now here’s a look at Year-to-Date numbers. How does 2022 compare to previous years…so far?

The increase from 2021 to 2022 is the biggest for 7 of 9 categories. The average annual increase since 2019 is 3.8% or more for all but Pet Food & Pet Supplies. This is largely due to deflation in the 1st half of 2021.

  • U.S. CPI – The current increase is still almost double the average increase from 2019>2022, but about 4 times the average annual increase from 2018>2021. Inflation is a big problem that started recently.
  • Pet Food – Inflation is growing stronger, especially after deflation in the 1st half of 2021 kept YTD prices low.
  • Food at Home – The 2022 YTD inflation beat the U.S. CPI by 36%. You can see the impact of supply chain issues.
  • Pets & Pet Supplies – Prices have been at record levels since January. Although the 2021>22 increase is being measured against a “flat” 2021, it is significant and just slightly behind Food & veterinary in the Pet Industry.
  • Veterinary Services – Trails only Food at Home in inflation since 2019 and is the only segment on the chart with a 3+% inflation rate each year throughout the pandemic and recovery. No matter what, just charge more.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. In 2022 there is another pricing surge as the inflation rate is 34% higher than pre-pandemic 2018>19.
  • Pet Services – February & May set records for the biggest year over year monthly increases in history. Prices began to grow again in July, reaching record highs in September & October. The October YTD increase of 6.1% is the largest in history. Demand has grown for Pet Services while the availability has decreased, a formula for inflation.
  • Haircuts & Personal Services – The services segments, essential & non-essential were hit hardest by the pandemic. After a small decrease in March, prices turned up again. The YTD rate is even with 2020>21 but still 93% more than 2018>19. Consumers are paying 15% more than in 2019. This usually reduces the purchase frequency.
  • Total Pet – We have seen basically two different inflation patterns. After 2019, Prices in the Services segments continued to increase, and the rate accelerated as we moved into 2021. The product segments – Food and Supplies, were on a different path. They generally deflated in 2020 and didn’t return to 2019 levels until mid-year 2021. Food prices began a slow increase, but Supplies remained stable until we neared yearend. In 2022, everything changed as Food and Supplies prices turned sharply up. Food prices continued to climb. Supplies pricing stabilized then grew in Jun>Oct. The Services segments have had ups & downs, but both are generally inflating. The net was an October YTD Petflation increase vs 2021 of 8.4%, surpassing the high 8.3% National rate. In March, it was only 72.5% of the CPI.

Petflation is growing stronger. Will it impact spending? Let’s put it into perspective. The 8.4% current YTD increase in Total Pet is still below the 8.9% record set in 2009 but 5+ times more than the 1.5% avg since then. Pet spending continues to move to higher income groups, but the impact of inflation varies by segment. Supplies is the most affected as many categories are price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a reduction in visit frequency. Spending in the Services segment is driven by higher incomes, so inflation is less impactful. We’ll just have to wait and see the overall impact on Pet Spending of the continued strong Petflation.