Archive for category: Pet Market Segments

The first 5 reports of our Pet Spending Demographics analysis have been very detailed and intense. We looked at the industry as a whole and each of the individual segments. Recent years have seen some turmoil. We have seen the very real impact of outside influences on the industry. In the 2^nd half of 2018, the FDA warning on grain free dog food caused a $2.3B drop in Food $ and new Tariffs flattened Supplies $, but Services had a record lift. In 2019, Food rebounded but the tariffs really hit the Supplies segment with a $3B drop. Veterinary $ grew slightly while Services $ fell a bit. The net was -0.2% drop in Total Pet. The 2020 pandemic had varied impacts as Pet Parents focused on needs. This caused a lift in Veterinary and a huge increase in Food because some demographics binge bought out of fear of shortages. Services spending plummeted due to outlet closures and restrictions while Supplies $ continued to fall because consumers saw them as more discretionary. 2021 brought a big change, Food $ fell because there was no “binge” repeat. However, Pet Parents focused on their “children” producing a widespread record lift in all other segments and a record $16B increase.

We have often referenced the similarities and differences in spending between Total Pet and the individual industry segments. Total Pet Spending is a sum of the parts and not all parts are equal. In this final report we are going to put the segments side by side to make the parallels, differences and changes from 2020 more readily apparent. We will address:

• “The big spenders” – those groups which account for the bulk of pet spending.
• The best and worst performing segments in each of twelve demographic categories
• The segments with the biggest changes in spending $ – both positive and negative
• And of course, the “Ultimate Spending CUs”

The emphasis is on “visual” side by side comparisons to allow you to quickly compare the industry segments. We’ll try to minimalize our comments. You can always reference one of the specific reports for more details. We’ll also break the charts up into smaller pieces that are demographically related to make the comparison more focused and easier.

Before we get started, let’s take a look at the current market share of the industry segments. The following 2 charts show the 2021 share of spending for each segment and the evolution over the past 29 years. 1992 was the last year that the Food Segment accounted for 50% of Total Pet Spending. By the way, Total Pet Spending was $16.2B in 1992. We have come a long way – +517%; annual growth rate of 6.48%. This will help put our comparisons into better perspective.

                                                                  Food: 34.4%; Down from 44.0%                Veterinary: 32.7%; Up from 29.7%

                                                               Supplies: 23.8%; Up from 18.1%                Services: 9.1%; Up from 8.2%

In 2021, Food lost almost 10% of share in Total Pet $ which was gained by all other segments. The most notable trend from 1992 to 2012 was the decline in Food share while Supplies gained in importance. In the 90’s Pet Owners became Pet Parents. At the same time, Pet Chains and Super Stores came to the forefront and there was a big Pet Product expansion into the Mass Market. In recent years, the Product Segments have been on a rollercoaster. Food reached 44% in 2020, the highest level since 44.8% in 1998. Supplies have been trending down since 2012, hitting bottom at 18.1% in 2020. The Services segments have been more stable. They have generally trended up since 2012. Non-Vet Services peaked at 11+% in 2018>19 then fell to 8.2% in 2020. They turned sharply up in 2021. Veterinary has been in the 25>27% range since 2012 but with a big lift in 2021, they broke the 30% mark and now trail Food by only 1.7%. Big Trends in Food and Petflation in Supplies tend to make the Product Segments more volatile than the Services Segments.

Now let’s get started with a look at the “Big Spenders”. The following 2 charts will compare the market share and performance in all Pet Industry segments by the groups responsible for the bulk of the spending in 10 demographic categories. These are the groups that we identified in our Total Pet analysis to generate at least a 60% market share of spending. As you recall, to better target the spending we altered 2 groups in Services and 1 in Food. However, to have a true side by side comparison we need to use the same groups for all. The market share dips below 60% twice, both in Food spending. One is because Food spending by Age is more balanced but skewed a little older than other segments. The other is in # of Earners, where the number of Earners in a CU mattered less. Even the low point of 55.1% is within 5% of our target and 96% of all measurements meet or exceed the 60% requirement, so the comparison is very valid.

The chart makes it especially easy to compare performance across categories. Remember, performance levels above 120% show a very high level of importance for this category in terms of increased spending. Unfortunately, it also indicates a high spending disparity among the segments within the category. There are 2 charts, each with 5 categories.

• White, Non-Hispanic – This group has an 83+% market share in every Segment. Minorities account for 32.8% of CUs but only 15>17% of spending in any segment. Factors: Lower income for Hispanics and African Americans and lower Pet ownership in Asians and African Americans. Whites lost 2>4% in share in all segments but Supplies which fell 0.1%. Hispanics made the biggest gains. Asians also had increases but African Americans generally lost ground.
• 2+ People in CU – 2+ is still the key in pet ownership. However, the results were mixed by size. Singles lost ground in all but Food so 2+ CUs had the opposite pattern. 2 People had big gains in all but Supplies. 3 People had big drops in all but Food. 4 People gained in Supplies and Veterinary but fell in Services and plummeted -18.7% in Food which produced the biggest drop in Total Pet. 5 People were up in all but Food. Truly, a mixed bag by CU size.
• Homeowners – Homeownership is very important in Pet Ownership and subsequently in all Pet Spending. It also increases with age. This group’s share of Total Pet fell below 80% for the first time in 2018. It bounced back in 2019>20 but fell 3 points in 2021. All but Services lost share with Food having the biggest drop, -5.7%. Services gained 2% and is again above 80%. Supplies remains at the bottom. Those w/o Mtge drove the big decrease.
• Suburban & Rural – They gained 0.2% in Total Pet. Both the Suburbs 2500> and Areas <2500 had strong gains in Veterinary but the other segments were divided. The Big Suburbs had strong gains in Food, Supplies & Total but lost ground in Services. The less populated areas increased share of Services but their share fell in Food, Supplies & Total.
• Over $70K Income – INCOME MATTERS MOST IN PET SPENDING! Income has grown in importance in recent years and all Industry segments performed at 140+%. Food lost 2% in share and replaced Supplies at the bottom in share and performance. It was the only segment with decreased share and performance. The other segments gained at least 5.6% in share, led by an 8.3% gain by Veterinary. Food spending became slightly more balanced while the income spending disparity gap significantly widened for the other segments. Services is still the least balanced.

• Everyone Works – Income is important, and the importance of # of Earners grew for the discretionary segments, Supplies & Services. Veterinary held its ground but Food performance fell 22%, driving Total Pet below 120%. The drop in Food was due to no binge buying while the big discretionary lifts came from the record pandemic recovery.
• College Grads – Higher education often correlates with higher income and a College degree is 2^nd in spending importance for all but Food. The group grew in share and performance in all segments, but Veterinary. Veterinary lost 4.1% in share and 6.9% in performance while the product segments, led by Food, gained 18.4% in share and 37.2% in performance. Total Pet gained 13.0% in share and 26.0% in performance. College is now a key factor.
• All Wage & Salary Earners– Incomes vary widely in this group, so performance is often lower. Supplies fell sharply in share and performance. Veterinary lost share due to fewer CUs but gained in performance. Services had slight gains in both. Food gained 12% in share and 22% in performance which pushed performance again above 100% – also for Total Pet. The group spent more in all segments, including Food but the bulk of the lifts came from White Collar.
• Married Couples – Marriage has been important to spending in all segments. In 2021 all segments but Food & Total Pet gained in share and performance. The lift was widespread in Married segments with 1 big negative exception, Married Couples with an oldest child 18 or older.
• 35 to 64 yrs – Includes the 3 highest income segments. This group had the same pattern of gains/losses as CU Composition – Food & Total down, all other segments up. The “bad guys” were 55>64 yr-olds. However, Food is a little more balanced by Age and in fact skews a little older. 35>64 only has a 55% share of the $.

Now we’ll drill a little deeper to look at the Best and Worst performing segments in each category. Color Highlighted cells are different from Total Pet; * = New Winner/Loser; ↑↓ = 5+% Performance Change from 2020. We will divide the categories into related groups. First, those related to Income.

• Income – Income matters, and its importance is growing in the Industry. The Food winner was up $150>199K from $100>149K in 2020 but the disparity between first and last place fell by 80%. The disparity in Services and Veterinary was 40+% more but Supplies was up 100+%. This pushed Total Pet up +50%. Income Matters the Most.
• # Earners – More earners = more income. 2+ Earners is the usual winner and reflects the importance of Gen X and Millennial CUs. The turmoil in Food is reflected by the No Earner, 2+ CU win. In all segments but Food & Total Pet the disparity and importance of the number of Earners grew. The biggest gain occurred in Veterinary.
• Occupation– Mgrs & Professionals and Self-Employed are #1 and #2 in CU income and expenditures. Self-Employed binge bought food in 2020 so they were replaced by Mgrs/Professionals in 2021. The bottom spots are again occupied by either Retirees or Blue-Collar workers. No Binge in 2021 caused the disparity to drop by 100+% in Food and Total Pet. It also decreased in all but Services. Income is important in Pet Spending but how you earn it is less so.

Next are demographics of which we have no control – Age, Generation and Racial/Ethnicity

• Racial/Ethnic– As expected, White Non-Hispanics are the top performer in all segments and African Americans replaced Asians in Food so they occupy all the bottom slots. They have the lowest income and only 25% own Pets. The disparity grew sharply in Supplies so now it is basically a 100% performance difference in Total & all segments.
• Age – The winners are all new. 35>44 had a strong year, but the winners are mixed. At the bottom in all but Supplies are <25 yr-olds. Food and Veterinary spending skew a little older. There are still big disparities in all segments but Food, which has more balanced spending at least by age, as all age groups over 35 have at least 95% performance.
• Generation – Gen X now rules. Gen Z is at the bottom in all but Supplies, which skews younger. The disparity gap closed significantly in Food but increased by 20% in Services & Supplies. It grew by 4% in Veterinary and Total Pet.

• Education – Winning and losing is closely tied to more and less Education which generally correlates with income. The disparities are huge. The biggest change is in Food which skewed towards lower education in the 2020 binge.
• CU Composition – In 2021 Pet Spending was all about CUs with kids, except for Food. The oldest kid 6>17 aligns with the middle age groups. Single Parents remain at the bottom in all but Supplies and the disparities are huge, 100+%.
• CU Size– The top CU number in Pet is now 4+ but “1” remains solidly on the bottom. 2 people CUs are still important as they replaced 4 people CUs at the top in Food & Services. The disparity is also smaller in all but Supplies.

• Housing – We’re back to normal as Homeowners w/Mortgage and Renters are the perennial winner and loser.
• Area– Areas <2500 population performed the best. This is surprising in Services as that usually skews towards higher population. Another surprise is Suburbs 2500> replaced Center City at the bottom in Food with a huge disparity.
• Region – 3 new winners, but no surprises. The South is again at the bottom in all but Food.

Here are two summary charts. The first compares the averages.

The big changes in Food & Supplies are immediately apparent. The 2021 difference in Food is less than half of 2020 while it increased by 40+% in Supplies. Pre-pandemic, the performance difference grew as you moved from Products to Services, peaking in the most discretionary, Non-Vet Services. In 2021, Food flipped from highest to lowest disparity, while Supplies moved to the top. However, both Veterinary and Supplies now have a difference of 100+%. Spending became significantly less balanced in every segment but Food. While the Total Pet disparity fell, it is still high at 94%.

• Food – After the 2020 binge, the disparity gap returned to a more normal, pre-pandemic level.
• Supplies – The record increase produced a record disparity between best and worst.
• Veterinary – The Winners performance grew while the losers fell pushing the difference over 100%.
• Services – The performance gap widened but essentially returned to a normal level for this segment.

This chart shows the number of new winners/losers.

Total Pet had many changes, especially in winners. Total Pet is a sum of the segments. However, you see how influential the Pet Food segment is with the turmoil from the drop in 2021 $ after the binge buying by specific segments in 2020.

• Pet Food spending fell because there was no repeat of the 2020 panic buying. As a result, over 80% of the winners changed and almost half of the losers are new.
• Even with a record increase, Supplies is the most stable with very little change in top or bottom performers.
• The Veterinary spending increase was also huge but there was also only a small number of changes.
• Services had a strong spending recovery and some turmoil mostly on the “losing” side.

Now, let’s look at the Demographic Segments with the Biggest Changes in $. We’ll truly see some differences between the Industry Segments. We have color highlighted differences from Total Pet.  Plus:                                                                                                                                                                                         ↔ = Winner/Loser same as 2020            ↕= Flipped from 1^st to Last or vice versa

• Income – All winners & losers were new with 3 flips from 1^st to last. The winners returned to high income groups and the losers to low income, with 2 exceptions. In Food & Total, $100>149K lost due to Food binge buying in 2020.
• # Earners – All new with 4 flips. In Non-Food Segments, the winner & loser were driven by income. In Food, 2+ CU Retirees finally upgraded which put them on top. They also spent more in other segments which led to a Total win.
• Occupation – 2 were repeats while 3 flipped. In a pattern similar to # Earners, the Non-Food winners (Managers & Professionals) were high income while the losers were low income. In Food & Total we saw the winning efforts by Retirees as well as the loss for Self-Employed as they didn’t repeat their 2020 extreme Food binge buy in 2021.

Now the Age and Racial/Ethnic Categories

• Racial Ethnic – White, non-Hispanics won in all but Food, where they were the big loser. They have high income & pet ownership and drove the 2020 Food binge so this is no surprise. African Americans have low income and Pet ownership and lost 3 times (2 were small increases). Asians have high income but had the smallest Services increase.
• Age – All new with 3 flips. 35>44 had 3 wins while 55>64 won in Veterinary and the 75+ Retirees won in Food. <25 lost in 2 segments and 55>64 paid for their 2020 Food binge, no surprise. 45>54 was an unexpected loser in Services.
• Generation – Gen X won Food, Supplies & Total and Millennials won Veterinary. Boomers did have the biggest increase in Services but lost in Food & Total Pet. Those born before 1946 came in last in Veterinary and Services. Gen Z did finish last in Supplies, with the smallest increase. However, winning skewed younger while losing skewed older.

Now, here are more Demographic Categories in which the consumers can make choices.

• Education – Higher education, especially a College degree is tied to increased income and pet spending. We had 4 flips which returned this demographic to a more normal pattern of winners & losers.
• CU Comp. – While CUs with Children were the best performers in Total Pet and all segments but Food, 2021 was also a strong year for Married Couple Only. They had the biggest increase in Total and all segments but Supplies.
• CU Size– Bigger CUs performed best, but with 4 last to 1st flips, 2 person CUs had the biggest increases across the board.

• Housing – 6 flips returned Housing to a more normal pattern with Homeowners w/Mtges at the top. Renters are often at the bottom, but in 2021 those w/o Mtges had 3 losses. Food & Total Pet came from their 2020 Food Binge.
• Area – The flip winner with 8. Big Suburbs flipped to their normal spot on top in Total and 3 segments. Center City was a surprise winner in Food but the 2020 Binge put <2500 at the bottom in 2021 Food & Total. Center City losses in Supplies & Veterinary are no surprise. The <2500 loss in Services is usual, but a loss with +$0.65B lift is surprising.
• Region – 6 flips and a more normal pattern with some exceptions. The South is an unusual Food winner and the 2020 Food binge flipped Midwest to the bottom in Food & Total. However, the strangest situation was that losers in 3 categories spent more, 2 with lifts of a $B or more. The big winner was the West and Midwest was the big loser.

The next chart compares the number of repeats, “flips” and new segments among the 12 winners and 12 losers for each industry segment. The idea is to look for patterns in the data that cross segments. Let’s take a look.

• 3 Segments were up a lot while Food $ fell. The overriding pattern was turmoil.
• In terms of repeats Supplies (5) and Veterinary (8) led the way while Food and Services had NONE!
• Due to the 2020 binge, Food led the way in flips (17) with all 2020 winners flipping to last in 2021. Services was 2nd (12). Veterinary had the fewest flips (3) while Supplies had (6) but 5 of the Supplies flips were from last to 1^st.
• You can see how the combined segments put Total Pet in turmoil – 17 flips and only 1 repeat
• There are a total of 24 winners and losers. The number different from 2020 was: Food: 24; Supplies: 19; Veterinary: 16; Services: 24; Total: 23. It appears that the record recovery caused as much or more turmoil than the pandemic.

Next, there were so many positive contributors that in each individual report we recognized 6 segments that didn’t win but still performed so well that they deserved Honorable Mention. I reviewed that list again and came up with segments that won Honorable Mention at least twice. Here are the 9 “SUPER Honorable Mentions” for 2021…

You can immediately see that it was an unusual year as 9 segments made the list. Supplies had the biggest increase, +57% and led the way with 6 segments on the list. Supplies became more skewed towards higher income but 97% of demographic segments spent more. Except for Millennials, the segments on the list are generally “low profile” but contributed notably to the industry. We should give special kudos to Millennials, Renters and Unmarried 2+ All Adult CUs. These 3 groups won Honorable Mention in 2 Industry segments and Total Pet.

Although the results were mixed, with numerous individual changes, I saw these trends of note:

1. Youth Movement – Boomers must inevitably fade. The Gen Xers have stepped up, with the Millennials close behind.
2. Sub-Urbanization – The Suburbs are the key. Areas <2500 are the top performers but the Suburbs 2500> spend the most. With the exception of pandemic 2020, they are the only area that increased $ every year since 2016.
3. The “Magic” number is 4+ – As spending skews younger the best performers in all but Food tend to be larger CUs. However, 2 person CUs still have the largest share of $ in every segment and Total Pet. They’re not done yet.
4. Changes in spending balance – The performance gap between the best and worst narrowed in Food but expanded in the other segments, especially in Supplies. This happened despite a demographically widespread increase.
5. Income is still the most important factor – The gap between best and worst narrowed in Food, but widened in all other segments, again especially in Supplies. The best performer is always $150K+, while the worst is <$30K.

And Finally, What you have all been waiting for…

THE ULTIMATE 2021 PET SPENDING CUs – Side by Side

Color Highlighted cells are different from Total Pet; * = New in 2021

Methodology – The segments are chosen because they have the highest annual CU spending of any segment in the category. They may or may not have the most total dollars. That would depend upon the number of CUs in the group.

Final Comment – These “winners” further reinforce the key factors in increased pet spending:

Marriage– A commitment to another person demonstrates that you can make a commitment to your pet “children”.

CU Size – The “magic” number continues to increase. It’s now 4+ people in a CU

Homeownership – Owning and controlling your own space has long been a key factor in Pet Parenting.

More space – Small suburbs near a big metro area offer the convenience of the city, plus room for more pets.

Income Matters Most – High Income, A High Paying Occupation, A College Degree, At least 2 Earners. These are characteristics present in all of the Ultimate Pet Spending CUs.

Generation– Boomers have passed the torch to Gen X. Age Note: All 45>54, 50% of 35>44 and 20% of 55>64 are Gen X.

I hope that this Visual Comparison helped you to get a “satellite view” of Pet Industry Spending in 2021. Please refer back to the individual segment reports to get more details.

Now we will turn our attention to the final Industry Segment – Veterinary Services. For years, Veterinary Services prices have had high inflation. This has resulted in CU income becoming the most dominant factor in spending behavior and a reduction in visit frequency. Consumers paid more, just used Veterinary Services less often.

In 2017 low inflation spurred an unusual 7.2% increase in visit frequency and a $2.5B increase in spending. In 2018 inflation returned to more normal levels. Consumers spent $0.56B more (+2.7%), but inflation was 2.6% so virtually all of the lift was from increased prices. In 2019 the situation got worse. Consumers spent $0.58B (+2.7%) more but inflation was 4.14%. This means that there was an actual decrease in the amount of Veterinary Services purchased. In 2020 the pandemic hit, and Pet Parents focused on needs – Food & Veterinary. Veterinary spending grew $3.05B, (+14.0%). In 2021, this behavior grew even stronger and produced a record $7.82B (+31.5%) increase.

We’ll start our analysis with the groups who were responsible for the bulk of Veterinary spending in 2021 and the $7.82B increase. The first chart details the biggest pet Veterinary spenders for each of 10 demographic categories. It shows their share of CU’s, share of Veterinary spending and their spending performance (Share of spending/share of CU’s). In terms of performance – 6 of 10 groups perform above 120%, the same as 2018>2020. This is equal to Supplies and more than Food (5) but less than Services (7). This means that these big spenders are performing well but it also signals that there is still a large disparity between the best and worst performing demographics in this “needed” segment. The groups are the same as those for Total Pet and categories are listed in the order that reflects their share of Total Pet $pending. As with all Industry Segments, High Income is the most important factor in Spending.

1. Race/Ethnic – White, not Hispanic (84.7%) down from 87.2%. This group accounts for the vast majority of spending in every segment, but they lost significant share in 2021. Their 126.0% performance is also down from 127.5% and they fell from 3rd to 4th in importance in Veterinary Spending but it still reflects the disparity in spending. Minorities did narrow the gap in 2021 primarily due to a $1.5B, 91% lift by Hispanics. However, all groups spent more.
2. # in CU – 2+ people (79.7%) up from 77.9% This group, which is 69.5% of U.S. CUs, gained share and their performance grew from 111.0% to 114.7%. Their rank in terms of importance in Veterinary Spending stayed at #8. All sizes spent more. The biggest $ lift, +$3.43B, came from 2 person CUs. 4 people had the biggest % gain, +75.8%.
3. Housing – Homeowners (81.0%) down from 83.1% Homeownership is a major factor in pet ownership and spending in all industry segments. In terms of importance to Veterinary spending, their 125.2% performance rating is down from 126.3%, and they fell from to 4th to 5th place. All segments increased spending by over $2B. This is impressive. However, the percentage increase for Renters was +47.7%, while Homeowners’ spending grew only 28.2%. This difference is what drove the drop in share and performance. We should note that Homeownership is not nearly as important to Veterinary Spending as it once was. In 2015 their share was 88.4% with performance of 141.8%.
4. Area – Suburban & Rural (73.0%) up from 67.1% Suburban CU’s are the biggest spenders in every segment. All areas spent more but those <2500 had a great year, +53.9%. This drove the big increase in share and their performance grew substantially to 113.2%, from 106.4%.
5. Income – Over $70K (71.7%) up from 63.4% Their performance also grew significantly from 145.8% to 160.0%. Higher income became even more important in increased Veterinary spending. Only the $30>49K group spent less. The <$30K group had a slight lift, +$0.2B (+7.2%) but the other groups, over $50K all had 40+% increases. $150K> led the way with a $4.3B (+61.8%) spending increase.
6. # Earners – “Everyone Works” (68.6%) down from 69.7% However, their Performance grew from 120.3% to 121.0% and they stayed at #6. In this group, all adults in the CU are employed. All segments spent more. Their share fell but performance increased because of a big $ lift from No Earners combined with a drop in the number of Earner CUs.
7. Education – College Grads (65.4%) up from 61.3%. Income generally increases with education. It is also important in understanding the need for regular Veterinary care. Performance also grew from 131.2% to 138.1% and they stayed 2nd in importance. Once again, all segments in the category spent more. However, College Grads spent $6.13B more. That means that 47.4% of all CUs generated 78.4% of the increase. The BA/BS group led the way with +$3.8B. BTW, Associate Degrees also spent $0.8B more, emphasizing the importance of formal, after HS education.
8. Occupation – All Wage & Salaried (66.4%) down from 68.1% but their performance increased from 110.7% to 111.9% due to 1.4M fewer CUs. All segments spent more. They lost share but gained in performance because of fewer CUs and a strong year by Retirees and non wage/salaried workers. The top 3 lifts were certainly a mixed bag: Mgrs/Professionals, +$2.27B; Retirees, +$1.59B; Service Workers, +$1.55B.
9. CU Composition – Married Couples (60.9%) up from 58.6% Their performance also grew to 128.4% from 120.8% and they moved up to #3 from #6 in importance. After 2 years, Married Couples market share returned to 60+% while their # of CUs fell by 1%. Only Single Parents spent less, -$0.1B. Married Couples with Children were +$2.57B but all Married Couple CUs with no children were +$2.75B. Singles & All Adult, Unmarried CUs were +$2.59B.
10. Age – 35>64 (62.1%) up from 60.1% Their performance also grew from 112.7% to 118.7% but they stayed in 7^th place. For the 8^th time all groups spent more and all had double digit % increases. The 55>64 yr olds led the way, +$2.20B but 35>44 was a close second, +$2.08B. Both of these segments had increases of 40+%.

Spending disparity grew in 8 categories and higher income became even more important in Veterinary spending. The most notable change was that Married Couples again reached a 60% share and moved from 6^th to 3^rd in importance. There was also a strong showing by 35>44 (Mostly young Gen Xers) and 55>64 (Mostly young Boomers).

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

Almost all of the best and worst performers are those that we would expect and there are only 5 that are different from 2020. This is 1 more than Supplies but far fewer than the 10 in Services and the 15 in Food. This suggests considerably less spending turmoil. The changes from 2020 are “boxed”. We should note:

• Income– The winner is up from $150>199K. Winner & Loser are not surprises but the gap is 40% more than 2020.
• Earners – An expected repeat winner and loser. They have the highest and lowest incomes.
• Occupation – Retirees replaced Blue Collar at the bottom but once again, it’s all about income
• Age – The 55>64 yr-olds edged out 35>44 and replaced the highest income group, 45>54 yr-olds at the top. These 3 groups have the highest income and are the only segments performing above 100% in Veterinary Spending.
• Race/Ethnic; Education; Housing– The expected winners & losers but the performance gap grew for all but Renters.
• Area – Another set of repeats but the difference in performance (disparity) increased by over 35% from 2020.
• Region –Northeast replaced West at the top and has now won for 6 of the past 7 years. The South has finished last for 6 years in a row. The win/lose gap increased by 20%, but 2 regions performed at 100+% – the 1^st time since 2019.
• CU Composition – No change here but again the performance gap widened, by 20%.
• # in CU – 4 Person CUs edged out 2 People for the win but now 2, 3 and 4 person CU’s all perform above 100%.
• Generation – No change again and the performance gap only widened by 4%.

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

We saw little turmoil in performance. That’s also true here. There were 8 repeats and 3 segments flipped from 1^st to last or vice versa. Last year they had 4 repeats and 10 flips. There were no surprise losers and 1 surprise winner – Millennials. In fact, in 9 categories all segments spent more, up from 4 in 2020. You should note that like 2020, the increases were significantly larger than the decreases. Plus, 94% of 96 demographic segments spent more. Here are the specifics:

• Race/Ethnic – Both groups held their spots as White, non-Hispanics maintained their dominance in this segment.
  • Winner – White, Not Hispanic – Veterinary: $27.65B; Up $5.98B (+27.6%)                      2020: White, Not Hispanic
  • Loser – African American – Veterinary: $1.00B; Up $0.13B (+14.9%)                                  2020: African Americans
  • Comment– In 2019 only African Americans spent less. In 2020 & 2021 all spent more. This shows that Pet Parents commitment to the health & wellbeing of their Pet Children is widespread across all racial/ethnic groups.
• Area Type – Center City, last year’s surprise winner flipped from 1^st to last and big Suburbs returned to the top.
  • Winner – Suburbs 2500> – Veterinary Spending: $15.97B; Up $4.40B (+38.1%)               2020: Center City
  • Loser – Center City – Veterinary Spending: $8.83B; Up $0.66B (+8.1%)                               2020: Suburbs 2500>
  • Comment – All groups also spent more. The Suburbs 2500> went from a 3% increase in 2020 to a 38%, $4.4B increase in 2021. However, the Areas <2500 had the biggest % increase, +56.1%, up $2.2B.
• Education – BA/BS Degree replaced Advanced College Degree at the top while <HS Grads stayed on the bottom.
  • Winner – BA/BS Degree – Veterinary Spending: $11.62B; Up $3.79B (+48.4%)                2020: Adv. College Degree
  • Loser – <High School Grads – Veterinary Spending: $0.37B; Up $0.03B (+8.3%)            2020: <HS Grads
  • Comment – All Education levels spent more but the lift was very much skewed towards higher Education. College grads generated 78.4% of the lift but those with at least an Associate’s Degree were responsible for 88.9%.
• Housing – Homeowners w/Mtges held their usual position at the top.
  • Winner – Homeowner w/Mtge – Veterinary: $17.56B; Up $3.49B (+24.8%)                2020: Homeowner w/Mtge
  • Loser – Renter – Veterinary: $6.19B; Up $2.00B (+47.7%)                                                   2020: Renter
  • Comment – Every segment spent more and had an increase of at least $2B. You know that it was a great year when the “loser” spent 47.7% more.
• # in CU – 2 Person CUs held on to the top spot.
  • Winner – 2 People – Veterinary Spending: $13.16B; Up $3.43B (+35.2%)                       2020: 2 People
  • Loser – 3 People – Veterinary Spending: $5.02B; Up $0.22B (+4.7%)                               2020: 1 Person
  • Comment: For the second consecutive year all groups spent more. 4 Person CUs went from a $0.04B (+1.5%) increase in 2020 to up $2.22 (+75.8%) in 2021.
• Region – The Northeast flipped from last to 1st. This is 4 consecutive years of flips for this Region.
  • Winner – Northeast – Veterinary Spending: $7.52B; Up $3.42B (+83.5%)                      2020: West
  • Loser – Midwest – Veterinary Spending: $6.45B; Up $1.19B (+22.5%)                              2020: Northeast
  • Comment – All Regions had double digit percentage increases of at least $1.19B. The Midwest replaced the Northeast at the bottom and the South fell to 3^rd place after 4 consecutive years at #2.
• Generation – No flips and the winner and loser were both new.
  • Winner – Millennials – Veterinary: $9.23B; Up $3.18B (+52.5%)                                    2020: Baby Boomers
  • Loser – Born <1946 – Veterinary: $1.83B; Down $0.19B (-9.2%)                                     2020: Gen Z
  • Comments – In a bit of a surprise, Millennials replaced Boomers at the top. The oldest Generation had the only decrease as the Silent/Greatest replaced Gen Z at the bottom. In 2021, Millennials, younger Gen Xers and younger Boomers all had a strong year in Veterinary spending.
• # Earners – Both the winner and loser are new, but not surprising.
  • Winner – 2 Earners – Veterinary Spending: $13.19B; Up $3.17B (+31.6%)                     2020: 3+ Earners
  • Loser – 1 Earner, Single – Veterinary Spending: $4.22B; Up $0.19B (+4.7%)                2020: No Earner, Single
  • Comment – The winner and loser reflect their income levels. Income is of primary importance to increased Veterinary Spending & # of earners is tied to income. In 2021 all CUs, with or without earners, spent more. 1 Earner, Singles had the only single digit % increase.
• Income – Both the winner and loser are new.
  • Winner – $200K> – Veterinary Spending: $6.32B; Up $2.58B (+69.0%)                        2020: $100>149K
  • Loser – $30>39K – Veterinary Spending: $1.24B; Down $0.61B (-33.1%)                        2020: $70>99K
  • Comment – Only the $30>39K group spent less. We got off last year’s spending rollercoaster as the size of the increase in Veterinary spending generally grew with income, peaking at $200K> in both $ and percentage.
• CU Composition – Married Couple Only held their spot at the top.
  • Winner – Married, Couple Only – Veterinary: $9.31B; Up $2.28B (+32.4%)                          2020: Married, Couple Only
  • Loser – Single Parents – Veterinary: $0.61B; Down $0.09B (-12.6%)                                         2020: Married, Oldest Child <6
  • Comment – After a 68% increase in 2020, Single Parents were the only group to spend less in 2021. Overall, Marriage became more important as 47.4% of CUs generated 60.9% of Veterinary $ and 68% of the increase.
• Occupation – The winner held on while the loser changed from White Collar to Blue Collar.
  • Winner – Mgrs & Professionals – Veterinary Spending: $12.14B; Up $2.27B (+23.0%)        2020: Mgrs & Profess.
  • Loser – Construction Workers – Veterinary Spending: $0.65B; Up $0.06B (+9.9%)              2020: Tech/Sales/Clerical
  • Comment – Retirees finished in 2^nd place, +$1.59B and not all Blue Collar workers had small increases. Service Workers were +$1.55B (+64.5%), the highest % increase of any segment.
• Age – A new winner and loser.
  • Winner – 55>64 yrs – Veterinary Spending: $7.65B; Up $2.20B (+40.4%)                      2020: 25>34 yrs
  • Loser – <25 yrs – Veterinary Spending: $0.42B; Up $0.09B (+28.2%)                                2020: 35>44 yrs
  • Comment: Last year 2 groups spent less. In 2021 all segments increased Veterinary spending. 55>64 replaced 25>34 at the top while <25 replaced 35>44 on the bottom. This seemed to indicate that the $ were skewing a little older. In fact, the 25>55 age group generated 56% of the spending increase while 55 and over accounted for 42%. The younger groups are still strongly growing.

We’ve now seen the winners and losers in terms of increase/decrease in Veterinary Spending $ for 12 Demographic Categories. The 2020 pandemic brought strong  growth in Veterinary spending which grew even stronger in 2021. However, the lift came with little turmoil as most segments held their spots in performance and there were no significant surprises in $ changes. The surprise was in just how widespread the spending lift was. In 2020, 4 categories, had no segments that spent less and 85% of all demographic segments spent more. In 2021 these increased to 9 categories and 94%. This means that there were even more “hidden” segments that didn’t win but made a significant contribution to the $7.82B increase. These groups don’t win an award, but they certainly deserve….

Honorable Mention

Racial/Ethnic spending became a little more balanced thanks to a 91% increase by Hispanics. Veterinary spending is driven by income but the lowest income group, No Earner, Singles had the biggest % increase. Low income Service Workers also had a huge, 64.5% lift. Although they are the 2^nd highest income segment, they are rarely the winner. In 2020 their increase in Veterinary $ was only 1%. In 2021 they exploded with a $1.72B (53.5%) lift, but this was only good enough for 3^rd place in the income category. The 35>44 yr-olds had a great year, finishing 1^st a number of times in other industry segments. In Veterinary they had to settle for 2^nd place behind the 55>64 yr-olds. They are a perennial 2^nd place finisher. In 2021, even a $2.1B increase was not enough to move them up. It was also a strong year for all Homeowners.

Summary

2016 & 2017 produced a combined increase of $3.6B in Veterinary Spending as inflation moved to record low levels. In 2018 & 2019 a Baby Boomer Spending “Bust” impacted Food & Veterinary. Fortunately, Gen X and Millennials stepped up to produce a 2.7% increase in both years. In 2020 the pandemic focused Pet Parents on the needed segments. This drove a $3B increase in Veterinary $. Boomers & Millennials led the way, but the lift was widespread as 85% of demographic segments spent more. In 2021 the lift grew to a record $7.82B with 94% of all segments spending more.

There was also less turmoil in the segment, but spending became a little less balanced in most demographic categories. The size of the increases far exceeded the size of the decreases. However, in 9 categories all segments increased spending. Income and Education remain of primary importance in terms of increased spending.

Income: Performance generally increases with income and reaches its highest level, 225+% at $200K>. The “halfway” point (50%) in $ fell below $100K for the 1^st time in 2020. It turned up sharply in 2021 to $113K. Spending is less  balanced in most categories in 2021 due to income.

Higher Education: Performance increases with Education but now reaches 100% when you have an Associates degree. Those with a BA/BS or higher perform at 138%. The performance of those with no “formal” College Degree is 57%. The disparity is not quite as bad as Income but still big. Equality in both categories is a long way off.

The performance of other big spending groups is also very important in the Veterinary segment. We again identified six demographic categories with high performing large groups. There were 6 for Supplies, 7 for Services but only 5 for Food.  Consumers have no control over Race/Ethnicity but in addition to Income and Education, Homeownership, # Earners & Marriage are also important factors in Veterinary spending. All groups but Marriage are tied to income and their high performance demonstrates that there are still big spending disparities among segments within these categories.

There was really only 1 change of note. Marriage returned to prominence moving up from 6^th to 3^rd in importance.

In 2019 Veterinary spending increased +2.7% while prices rose 4.14% – a net decrease in the amount of Services. In 2020 spending grew +14.0% while inflation was 3.7%. That’s over 10% in real growth, a very positive situation. In 2021 inflation rose to 4.9% but spending skyrocketed, +31.5%. That means 26.6% in “real” growth, 84% of the total record increase – truly spectacular. Although the lift was demographically widespread, Veterinary spending became a little less balanced. We’ll see if Pet Parents continue to spend heavily on Veterinary Services with the high inflation rates in 2022.

Finally – The “Ultimate” Veterinary Services Spending Consumer Unit consists of 4 people – a married couple with an oldest child over 18. They are 55>56 years old. They are White, but not of Hispanic origin. At least one of them has an Adv. College Degree and works as a Mgr/Professional. Their oldest child also works. Their total income is $200K>. They live in a small suburb, adjacent to a big city in the Northeast U.S. and are still paying off the mortgage on their home.

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 6^th to 8^th 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 2^nd 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 1^st 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 1^st 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 1^st 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 1^st, 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 2^nd, +$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 1^st 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 1^st 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 2^nd 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 2^nd The Silent Generation (Born <1946) then came in a distant 4^th, +$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 1^st 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 2^nd +$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 1^st or 2^nd 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 2^nd 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.

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 9^th to 6^th. 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%. (8^th) 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 1^st 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 3^rd dual flip as 2 person CUs return to the top for the 1^st 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 1^st 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 2^nd 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 1^st 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 1^st 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 2^nd  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 2^nd  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.