2024 U.S. PET FOOD SPENDING $40.04B…Down ↓$5.46B

Total Pet spending reached another record high of $118.87B, up $1.27B (+1.1%). All segments but Food increased sales. Pet Food had a record drop while Veterinary $ continued double digit growth. Supplies & Services $ were up <4.0%. The big bad news was Pet Food. Their record decrease put them only 3.5% above 2022 and for the 1^st time they are not the spending leader. Product inflation slowed but it is still strong in both Service Segments. Here are the 2024 $ specifics:

• Pet Food – $40.04B; Down -$5.46B (-12.0%)
• Pets & Supplies – $23.91B; Up $0.89B (+3.9%)
• Veterinary – $41.26B; Up $5.60B (+15.7%)
• Pet Services – $13.65B; Up $0.23B (+1.7%)

The industry truly is a “sum” of its integral segments, and each segment has very specific and often very different buying behavior from the many consumer demographic segments. For this reason, we’re going to analyze each of the industry segments first. This will put the final analysis of Total Pet’s 2024 Spending into better perspective. Note: The numbers in this report come from or are calculated by using data from the current and past US BLS Consumer Expenditure Surveys. In 2024, this was gathered by the U.S. Census Bureau from over 42,000 interviews and spending diaries. The final data was then compiled and published by the US BLS. All inflation numbers are also provided by the US BLS.

We will start with the formerly largest Segment, Pet Food (& Treats). In 2024 Pet Food Spending totaled $40.04B in the U.S., a -$5.46B (-12.0%) decrease from 2023. Pet Food inflation was 0.2% in 2024 so the record drop was “really” slightly worse in the amount of product sold than the actual numbers. In earlier research we discovered a distinct, long-term pattern in Pet Food Spending. In 2018 we broke the pattern due to outside influences – 1^st the FDA warning, then with COVID in 2020. In 24, the pattern returned with a record $ drop. Here is Pet Food Spending since 1997 in full Retail Dollars and adjusted for inflation.

The pattern began in 1997. Retail Pet Food Spending increases for 2 consecutive years then reaches a plateau year or even drops. There was a notable exception in the period from 2006 to 2010. During this time, there were two traumas which directly impacted the Pet Food Retail market. The first was the Melamine recall, which resulted in radically increased prices as consumers insisted on made in USA products with all USA ingredients. The second affected everyone – the great Recession in 2009. This was the first time that annual U.S. retail spending had declined since 1956. The net result was that the plateau period was extended to include both 2009 and 2010.

For 20 years, Pet Food was driven by short term trends. A new trend catches the consumers’ attention and grows …for 2 years. Then sales plateau or even drop…and move to the next “must have”. After 2014, the changes  became bigger and the situation got more complex due to a number of factors starting with the move to high priced super premium foods, but including increased competition, especially from the internet, and behavioral changes, like increased value shopping. In 2018, outside influences came into prominence. The first was the FDA warning on Grain Free dog food. This caused many Pet Parents to back away from certain foods. When the warning was declared bogus, the Food segment began to recover. Then came COVID. Fear of possible shortages caused some groups to binge buy food. That ended and spending dipped in 2021. It turned up again in 22>23. Much of the lift was due to 10+% inflation. As expected, $ fell in 24. Of note: Considering inflation, only 38% of the 97>24 growth is real. Now, let’s take a closer look at spending since 2014.

First, some specifics behind the $5.46B (-12.0%) decrease to $40.04B. In 2024, the average U.S. Household spent a total of $295.90 on Pet Food. This was an -12.5% decrease from the $338.33 spent in 2023, which doesn’t exactly “add up” to the -12.0% decrease in total Food Spending. With additional data provided from the US BLS, here is what happened.

• 0.6% more U.S. CUs
• Spent 4.0% less $
• 8.9% less often

By the way, if 68% of U.S. CUs are pet parents then their annual Pet Food Spending is $435.15. Here’s a rolling history.

2014 marks the beginning of the Super Premium era. It began in the 2^nd half of 2014 with the 25>34-year-old Millennials making the 1^st move. In 2015 the Baby Boomers got on board in a big way, producing a $5.42B increase in spending, the biggest lift in history at the time. 2016 saw a spending change that was accelerated by the high prices of Super Premium Pet Foods. After consumers upgraded to a more expensive pet food, their #1 priority became, “Where can I buy it for less?” Value Shopping on the internet was a major contributing factor in the big spending drop in 2016.

2017 was an up year which should have been due to a “must have” trend. However, a closer look at the data showed that the $4B increase in Pet Food spending in 2017 came not from a new trend but from a deeper demographic penetration of Super Premium foods. Value shopping in a highly competitive market, especially on the internet, had made Super Premium pet foods more accessible to a broad swath of consumers.

Like Pet Food, human behavior has changed over the years in regard to our pets. In the 90’s, Pet Owners became Pet Parents. Then, after 2000 we began truly humanizing our pets, which is very accurately reflected in the evolution of Pet Food. We became more focused on fulfilling the health needs of our pets, beginning with the first move to premium foods in 2004. This radically increased after the Melamine scare in 2007. Now consumers read pet food labels, research ingredients and expect their pet foods to meet the same quality standards as the best human foods. This was very evident in 2018. It should have been a year of increased spending but the consumers’ reaction to the FDA grain free warning threw the pattern out the window. In 2019 the warning lost credibility. Pet Food spending stabilized in the 1^s half of the year and then grew by $2.3B in the 2^nd  half. Some Pet Parents began to return to the topline Super Premium Foods while others opted for even more expensive varieties. Also, new groups got on board the Super Premium Express.

After the 2019 recovery came the pandemic of 2020. There is nothing more necessary to a Pet Parent than pet food. This spurred binge buying, especially in the 1^st half of the year and drove the biggest annual spending increase in history. However, binge buying doesn’t increase usage and it causes an overstock in home supply. In 2021, Pets “ate down” the extra food so spending fell. Another factor was the ongoing strong search for value & convenience which continues to drive many consumers online. In 2022, Pet Food spending returned to a more normal pattern. In 2023, there was a record lift driven by 10.6% inflation and a 6% lift in frequency. Inflation slowed to 0.2% in 2024 and the transaction size dropped by 4%. However, the biggest change was in purchase frequency, -8.9%. Together, these factors produced a record $5.46B decrease in spending.

Even with the 2024 drop, the growth of Pet Food spending since 2014 reflects the rise of Super Premium but also another trend – the spectacular increase in the number and use of Pet Medications and Supplements, which are often produced in the form of treats. Together, the strength of Pet Food and these product subcategories reflect the Pet Parents’ top priority – the health, wellbeing and safety of their Pet Children, which starts with the quality of their food.

Now let’s look at some specific 2024 Pet Food Spending Demographics. The first is income. Prior to 2014 it was less of a factor in Food spending. However, the move to Super Premium has brought it more to the forefront. In 2015 the spending of the $70K> group exceeded the <$70K for the 1st time. In 2024, both <$70K & $70K> had drops but <$70K was -$4.2B while $70K> was only -$1.3B. All big groups but $70>100K were down but <$30K had the biggest drop. In 2015, the 50/50 divide on Pet Food spending was about $70K. By 2020, it was up to $107K. In 2022 it had fallen to $91K, but rose to $93K in 2023 and to $99K in 2024. That’s 5% less than the average CU income but 18% more than the median income. Higher income is increasing in importance in Pet Food spending. All CUs over $70K have 100+% performance ($ Share/CU Share) but the $150K> group is the best at 135%. The chart below shows annual spending for major income groups from 2018>2024. This should put the 2024 numbers into better perspective.

In 2023 and 2017 all major income groups spent more on Food. In 2024, only $70>100K spent more – a big change. Since 2018, we have seen the major impact on various groups by outside influences. In mid-2018 it was the FDA grain free warning. In 2020 it was the pandemic and in 2022 it was the first inflation spike. In 2023, consumers adapted to high prices. However, in 2024 “value” became a top priority. Some downgraded but many moved online or to private label.

    2024 National: $295.90 per CU (-12.5%); $40.04B; ↓$5.46B (-12.0%);  2018>2024: Up $11.20B (+38.8%); Avg: +5.6%

The biggest drops came from the Highest and lowest income groups, which clearly shows that value/price is important to everyone, regardless of income. The only spending increase was by the $70>100K group. This was not unexpected. They have fewer children than $100K> CUs so they have money to spend on pets.

Here are 2024 specifics:

• Under $30K: (20.1% of CU’s) – $162.17 per CU (-29.7%) – $3.92B – ↓ $2.71B (-40.9%). Obviously, this group is very price sensitive. The number of CU’s was down 4.8% in 2024 and their avg CU income only grew by $208. Even with a $68 drop in Pet Food, their avg CU total expenditures rose by $540 – a big change from a -$682 drop in 2023. Their financial situation obviously got worse in 2024. Their spending lift in 2023 was likely due to an upgrade in Food. The drop in 2024 is so large that many CUs downgraded their Pet Food. They still spend 0.47% of their Total CU expenditures on Pet Food. The national avg is 0.38%. They remain committed Pet Parents.
• $30K>$70K: (27.6% of CU’s) – $242.33 per CU (-17.0%) – $9.62B – ↓ $1.48B (-13.3%). They are also very price sensitive, so inflation had an impact. Their average income was up 0.3% while the national average increased by 2.4%. They had a 1.5% decrease in the number of CUs and a 0.4% decrease in CU spending. Their total Pet Food spending was down but it was driven by the $30>39K group. The $30>39K group lost 2.6% in CUs and CU Food spending was -41.8% & $ were -$1.97B (-46.9%). The $40>49K group fell -0.1% in CUs but their CU Food spending was +18.4%. Their $ were +$0.56B (+3.9%). $50>69K lost -1.6% in CUs and spent -11.2% less per CU on Pet Food. Their Pet Food $ only dropped by $0.04B (-0.8%). Behavior was mixed – upgrading, downgrading & value shopping. They are still committed to their pets, spending 1.09% of total expenditures on their pets and 0.45% on Pet Food.
• $70K>$100K: (14.4% of CU’s) – $329.78 per CU (+4.1%) – $6.97B – Up $0.53B (+8.2%). This group has an up/down spending pattern. They committed to Super Premium food in 2017, but they have been very sensitive to outside influences – the FDA warning in 2018, COVID in 2020 and inflation in 2022. They have big family responsibilities and are under monetary pressure. They got used to inflation and made a comeback in 2023 which continued in 2024.
• $100>150K (16.3% of CU’s) – $353.48 per CU (-11.4%) – $7.81B – ↓ $0.57B (-6.9%). They drove the binge buying of Food in 2020. It was pure emotion, but they had the $ to do it. In 2021, they had an expected big drop. In 2022, inflation and a 9.6% increase in CU’s drove a 23% increase in $. In 2023 they had 7.4% more CUs and spent 22.5% more $ per CU…+$1.67B. In 2024, 1.3% less CUs and CU spending dropped, most likely due to value shopping.
• $150K> (21.7% of CU’s) – $415.26 per CU (-15.4%) – $11.72B – ↓ $1.23B (-9.5%). Their Pet Food CU spending fell by 15.4%, but CUs increased by 10.5%. Total $ were -9.5%. There may be some downgrading but most of the drop was due to value shopping or switching to private label. In performance, share of $/share of CUs, their score of 135.2% is only exceeded by a subgroup of theirs, $200K>, with 148%. Higher income is even more important.

The pandemic certainly caused turmoil. First, the fear-based binge buying, which caused a record increase in 2020. This couldn’t be repeated so spending fell in 2021. Spending returned to more normal, positive behavior in 2022 as only the $70>100K group spent less. In 2023 Inflation was high, but the welfare of their Pet children mattered more than the price, so most Pet Parents just paid more – a record lift. In 2024, we expected and got a drop. It was a record -$5.46B. It was widespread but focused <$70K. The 50/50 $ split moved up from $93K to $99K. High income matters even more.

Now, Spending by Age Group…

   2024 National: $295.90 per CU (-12.5%); $40.04B;  ↓$5.46B (-12.0%);  2018>2024: Up $11.20B (+38.8%); Avg: +5.6%

The 45>64 yr-old groups spent more, while all others spent less.

• 65>74 (16.6% of CU’s) – $298.48 per CU (-27.8%) – $6.58B – Down $2.42B (-26.9%). This group is all Baby Boomers. They are starting to retire but many are still working (0.7 per CU). Their Pets are a priority. In 24, they spent 0.46% of their total CU expenditures on Pet Food, the highest % of any group but a big drop from 0.64%. Also, until the drop in 24, they are the only group to spend more on Pet Food every year since 2016. In 2024, 1.3% more CUs spent 13.1% less $, 16.9% less often. A downgrade by some CUs seems likely. Value shopping is a certainty.
• 55>64 (17.6% of CU’s) – $361.15 per CU (+2.7%) – $8.71B – Up $0.23B (+2.7%). This group has been at the forefront of recent major spending swings. In 2015 they upgraded to Super Premium. In 2016 they shopped for a better price. In 2017 they led a deeper penetration of the upgrade. In 2018 they had a -$3.5B reaction to the FDA warning. They began to recover in 2019 but then came 2020, which saw a huge lift in spending. There were 3 major factors. First was binge buying due to pandemic. They also were still recovering from the FDA warning. Finally, the pandemic caused the loss of over 2 million <25 CUs. Many of them moved back with their parents bringing their pets with them. In 2021, there was a big drop in food $ as they “ate up” the extra stock and many of their kids moved out. In 2022 inflation brought a big lift. In 2023 they increased value shopping. In 2024 they had a small lift but were essentially stable as 0.02% more CUs spent 6.0% more $, 3.1% less often.
• 35<44 (17.9% of CUs)- $292.96 per CU (-16.9%) – $7.04B – down $1.40B (-16.6%). They are 2^nd in income & spending but have the biggest families. Until 23 their spending pattern matched the 45>54 yr-olds. In 23 their total Pet Food spending exceeded the older group. In 24 they fell behind as 0.4% more CUs spent 9.0% less $, 8.7% less often.
• 45>54 (16.3% of CU’s) – $374.77 per CU (+11.5%) – $8.23B – Up $0.78B (+10.4%). This group is #1 in income and CU expenditures. Up until 2015 they were #1 in Pet Food spending. They didn’t “buy in” to Super Premium until 2017. They were negatively impacted by the FDA warning but strongly rebounded. In 2020, their spending dropped significantly. Much of the decrease was due to value shopping on the internet. In 2021, they opted for even more expensive food, spending 24% more on each purchase. In 2022, despite strong inflation, their purchase frequency and $ grew. In 23, their $ fell a little but this reversed in 24 as 1.0% fewer CUs spent 11.7% more $, 0.3% more often
• 25>34 (15.0% of CU’s)- $256.17 per CU (-22.0%) – $5.56B – Down $1.26B (-18.5%). In the early Super Premium years their spending often foreshadowed the overall market for the next year. In pandemic 2020 they spent 22.3% more. Their $ stabilized in 21>22, then surged in 23. In 24 they fell as 4.5% more CUs spent 16.8% less $, 6.3% less often.
• 75> (11.6% of CU’s) – $217.29 per CU (-6.8%) – $37B – Down $0.20B (-5.6%). Pet Parenting becomes harder as we age. They strongly moved to Super Premium Food in 2021. In 2022, inflation impacted them as many downgraded. In 23 they strongly rebounded but this slowed in 24 as 1.2% more CUs spent 4.7% more $, 10.9% less often.
• <25 (4.9% of CU’s) – $93.14 per CU (-65.7%) – $0.56B – Down $1.19B (-68.1%). Many moved in with other adults or got married. They value shopped and likely downgraded food as 7.2% less CUs spent 38.1% less $, 44.5% less often.

In 2020 the 55>64 yr olds binge bought Pet Food. In 21 their spending naturally plummeted, the only decrease by any age group. In 22 we had high inflation. It affected everyone. In 23, there was a widespread spending surge. In 24, this flipped as the only lifts came from 2 older high income age groups.

Next, let’s take a look at some other key demographic “movers” in 2024 Pet Food Spending. The segments that are outlined in black “flipped” from 1^st to last or vice versa from 2023. The red outline stayed the same.

The first thing that you notice is that the biggest decreases are radically larger than the biggest increases. We should also note that in 1 demographic category all segments spent less on Pet Food in 2024 than in 2023. The drop was also widespread as 81.5% of 92 demographic segments spent less than in 2023. These are signs that Pet Food spending was not doing well. Also note: 2024 was the 1^st year in history that Food was not the biggest Pet $ segment. You can see that 17 of the 24 segments flipped from last to first or vice versa. Last year there were 4. None held their position from 2023. In 2023 there were 4 the same as 2022. There was a lot of change and almost no stability.

Only 3 of the winners are the “usual suspects”:

• Gen X      ●   45>54 yrs old      ●   Married Couple Only

But there are 5 big surprise winners:

• No Earner, 2+ CU      ●   $40>49K      ●   Asians      ●   Center City       ●   Occupation Not Defined

These winners indicate that despite the resulting high prices from cumulative inflation, there is a strong commitment to premium pet foods that is widespread across demographic categories.

Among the losers, 5 of the segments are not unexpected:

• Singles     ●   Single, No Earner     ●   1 Person     ●   <$30K    ●   65>74 yrs old

There were 5 surprises. Most have higher incomes.

•    Boomers    ●   Homeowners w/mtge     ●   White, Not Hispanic    ●   BA/BS Degree    ●   Suburbs 2500>

The 2023 $6.81B (+17.6%) increase was the biggest in history. It was widespread across 87.5% of 92 demographic segments. In 2024 it was followed by a -$5.46B (-12.0%) drop, also the biggest in history. It too was widespread across 81.5% of demographics. Pet Food spending is now up $8.85B from 2019, +28.4%, a growth rate of 5.1%, 4% less than the 5.3% from 2014>19. In terms of inflation adjusted sales, the amount of Pet Food sold in 2024 is only 4.3% more than in 2020. Pet Food Inflation was 10+% in 22/23, slowed to 0.2% in 24 & -0.5% in the 1^st half of 25. We’ll see what happens.