Archive for category: Pet Market Segments

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. January prices grew 0.8% from December and the CPI was still up +6.4% vs 2022, but down from +6.5% last month. The grocery price surge also slowed but they’re still up 11.3% over 2022. That’s 11 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 2022. National inflation has slowed since July, but Petflation has generally increased. It passed the National CPI in July and is +10.6% in January, 65.6% higher than the national rate of 6.4%. 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 23 vs 22 which will include Pet Segments and relevant Human spending categories. Plus
  1. CPI change from the previous month
  2. Inflation changes for recent years (22>21, 20>21, 19>20, 18>19)
  3. Total Inflation for the current month in 2023 vs 2019 and now vs 2021 to see the full inflation surge
  4. Average annual Year Over Year inflation rate from 2019 to 2023
• Since January data is YTD, we won’t have separate YTD data until next month. It will include:
  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 January 2021 to January 2023. 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 yearend and those from 12 and 24 months earlier are included. For all but Supplies, cumulative inflation peaked in January. I have added and highlighted the month that Supplies peaked. This will give you some key waypoints.

The pandemic hit home in 2020. In January 21, the national CPI was only +1.8% and Pet prices were +1.2%. 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. In January, all inflated and Total Petflation since Dec 2019 has been above the U.S. 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>Dec 2022. Prices turned up again in January but 41% of the overall 16.4% increase since 2019 happened from January>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 2021 but 89% of the 17.3% 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, then turned up in Aug>Oct to a new record high. Prices stabilized in Nov>Dec but turned up again in January.
• 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>Jan and passed Food for 2^nd place among Pet Industry Segments.
• Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December 2021 which put them above the overall CPI. In May 2022 prices fell and stabilized in June causing them to briefly fall below the National CPI. However, prices turned up again and despite Oct & Dec dips they have stayed above the National CPI since July and hit a new record in January.
• Total Pet – The blending of patterns made Total Pet appear calm. In December 2021 the pricing surge began. In Mar>June 2022 the segments had ups & downs but Petflation grew again from Jul>Nov. It slowed in December then turned up again in January as all segments increased prices. It has been ahead of the cumulative U.S. CPI on our 2019>2023 chart since November.

Next, we’ll turn our attention to the Year over Year inflation rate change for January and compare it to last month, last year and to previous years. We also added a new measurement, showing the total inflation from 2021 to 2023. Although inflation is slowing, it’s not over. This will allow you to see the cumulative amount of the current pricing surge. You can compare the annual inflation rates of 22>23 to 21>22 but also see how much of the total inflation since 2019 came from the ongoing trauma. Again, we’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were +0.8% vs December and were up 6.4% vs January 2022. The Grocery increase is down to 11.3% but is still a big negative. January prices generally rise from December so it’s not surprising that 8 of 9 categories had increased prices from last month. 5 of the increases were over 0.5%. Last month there was only 1. 2 of the increases were over 1.0% and the Pet Industry again led the way – Pet Services +1.5% and Veterinary Services +1.0%. The overall national YOY monthly inflation rate is slightly down from December but it is significantly down vs the 21>22 rate. No other category has that pattern. The 22>23 inflation rate is higher than the 21>22 rate in all other categories. In all but 2 – Medical Services and Haircuts/Personal Services, it is the highest rate in any year since 2019. In our new 21>23 measurement you also can see that over 75% of the cumulative inflation since 2019 occurred in the current surge for all categories but Veterinary, Medical Services and Haircuts & Personal Services. The Pet Supplies Segment has a very interesting situation. The 21>23 inflation surge provided 113% of the overall inflation since 2019. This happened because Pet Supplies prices strongly deflated in 20>21.

Now Some Specific Observations

• U.S. CPI– Prices are +0.8% from December. The YOY increase is down to +6.4%. It peaked at +9.1% back in June. The targeted inflation rate is <2% so we are still over 3 times higher than the target. However, a 7th straight slight decline is good news. It is also good that the current inflation rate is below 21>22 but the 21>23 rate is 14.4%, 76% of total inflation since 2019. How many households “broke even” by increasing their income by over 14% in 2 years?
• Pet Food– Prices are +0.2% vs December and 15.1% vs January 2022. They are also 34% higher than the Food at Home inflation rate – not good news! The YOY increase is being measured against a time when prices were only 1.9% above the 2019 level, but that increase is still an incredible 12.5 times the pre-pandemic 1.2% increase from 2018 to 2019. The 2021>2023 inflation surge generated 88% of the total 20.7% inflation since 2019.
• Food at Home – Prices are up 8% from December. The monthly YOY increase is 11.3%, down slightly from 11.8% in December but considerably lower than Jul>Sep 2022 when it exceeded 13%. The 24.9% Inflation for this category since 2019 is the highest on the chart and is 32% more than the national CPI. 79% of their inflation since 2019 occurred from 2021>2023 but their pattern is different from the national CPI. Grocery prices began inflating in 2020>2021 then the rate accelerated. It appears that the pandemic supply chain issues in Food which contributed to higher prices started early and foreshadowed problems in other categories and the overall CPI tsunami.
• Pets & Supplies – Prices are up +0.4% from December. That’s 2 straight monthly increases after a dip in November. They still have the lowest increase since 2019 and now have fallen to last place in terms of the monthly increase vs last year for Pet Segments. As we noted earlier, prices deflated in 2020>2021 so the 2021>2023 inflation surge accounted for 100+% of the total price increase since 2019. They reached an all-time high in October then prices deflated. However, 2 straight months of increases has put them within 0.4% of the record high.
• Veterinary Services – January prices are +1.0% from They are +8.4% from 2022 and are tied with Services for 2^nd place behind Food in the Pet Industry. They also remain 2^nd in the increase since 2019 with 24.5% compared to Food at home at 24.9%. For Veterinary Services, relatively high annual inflation is the norm. The rate did increase during the current surge but only 57% of the 4 years’ worth of inflation occurred in the 2 years from 2021>2023.
• 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 January prices fell -0.1% from December but were +3.0% vs 2022, the 2^nd highest rate since 2019. Medical Prices are not a big part of the current surge as only 40% of the 2019>23 increase happened from 21>23.
• Pet Services – Inflation slowed in 2020 but began to grow in 2021/2022. January prices were up +1.5% from December, the biggest increase on the chart, and +8.4% vs 2021, a new rate record and an all-time pricing high. Their inflation is tied to the current surge as 72% of total since 2019 occurred from 2021>2023.
• Haircuts & Other Personal Services – Prices are +0.2% from December and +5.2% from 2022, but this is only 2^nd to +5.7% in 20>21. Inflation began to grow in 20>21 and 50% of the inflation from 19>23 happened from 21>23.
• Total Pet– Petflation is strong, 2.4 times the rate of last year, 65.6% ahead of the National CPI and the +10.6% is also the highest January rate in history. Prices increased in all segments vs December so Total Pet was up 0.8%, which is actually the norm. A Dec>Jan increase in Petflation has happened in 25 of the last 26 years. Food is the runaway leader, but inflation is becoming more balanced as all other segments have aa YOY rate of 7.2>8.4%. 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.

YOY Petflation slowed slightly in January from December but still set a new record for the month. Will it impact spending? Let’s put it into perspective. The 10.6% January 2023 increase in Total Pet beat the 10.3% record set in 2009 and is 6+ times more than the 1.5% average rate from 2010>2021. 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. The Services segment is the most driven by higher incomes, so inflation is less impactful. The US BLS recently decided to update the CPI annually rather than every 2 years based upon each expenditure’s share of total expenditures. I worked with them to update the CPI of my specially created aggregates. During our conversations, they noted that Pet expenditures had one of the biggest share gains of any group. Apparently, Pet Parents are just reallocating their $ to prioritize their “children’s” needs. This is not unexpected. We’ll see if it is impacted by continued high inflation.

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 2^nd to Supplies’ 83.3%. Their performance also increased from 111.6% to 118.3% but they stayed in 8^th 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 2^nd 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 1^st 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 1^st 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 2^nd , 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 1^st, 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 1^st 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 2^nd 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 2^nd 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 1^st or 2^nd 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.

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 3^rd 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 2^nd 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 1^st 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 2^nd only to 11.1% in 2008. It was magnified by deflation in the 1^st 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.

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 2^nd 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 6^th 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 7^th 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 3^rd 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 2^nd, +$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 6^th 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 2^nd 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 1^st 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 2^nd, +$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 1^st 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 1^st 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.

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 1^st 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 3^rd, 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 2^nd biggest drop. In 2021 they had the 2^nd 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.