RESEARCH - Millennials and Boomers Lead the Pack in Pet Spending

Sales and marketing company Acosta did some research on the growing pet industry, looking not only at pet spending but also consumer behaviour.

“The pet category is an important one, as its total sales surpass popular categories such as dairy and candy,” Colin Stewart, Senior Vice President at Acosta, said in a release.

“Fortunately for brands and retailers, the two largest generations — Baby Boomers and Millennials — also represent the two biggest age groups for pet ownership, which means we can expect continued growth in this category, especially since Millennials are just now entering their prime spending years.”

According to the report, nearly half of pet owners remain loyal to their preferred brand of pet food, regardless of coupons or deals, but they do take advantage of digital tools such as retailer websites or apps to search for sales.

Ninety-four percent of pet owners indicate their pets are part of the family, with 80 percent treating them like children, which makes the report - The Pet Parenting Boom - aptly named.

When it comes to spending for pet owners, the well-being of their animals plays an important role, but so does their own definition of necessities.

Boomers consider toys and treats nonessentials, while Millennials — who are more likely to splurge on pet fashion — label them as necessities.

• Forty-six percent of pet owners report they purchase products they think will provide a wellness benefit to their pets.
• Thirty-six percent of pet owners spend more than $500 annually on pet medical expenses and $200 per year on regular grooming.
• Sixty percent of Millennials purchase nonessential pet items at least once a week, versus 28 percent of Gen Xers and 8 percent of Boomers.
• Sixty percent of pet owners report celebrating their pets’ birthdays in some fashion, which for more than half of Millennial and 40 percent of Gen X pet owners means giving their animals birthday gifts.

“Pet owners shop for their animals much in the same way they shop for themselves,” added Stewart.

“Retailers can apply key best practices in grocery to the retail pet channel as well, including appealing to Millennials, emphasizing health and wellness, and improving convenience to increase shopper loyalty.”

Nearly 80 million households in the U.S. own a pet, representing 60 percent of the entire population.

Packaged Facts Provides Trends for the Pet Supply Market

In 2014, the nonfood pet supply market had a value of $15 billion USD in the United States according to Packaged Facts (all statistics in this article are from “Pet Supplies in the US, 10th Edition”). From 2010 to 2014 the pet supply industry grew by 15%.

There are approximately 2,250 companies that participate in the American pet supply market and this number continues to increase. Competition is expected to increase as well and the pet supply market is expected to reach $17 billion USD by 2019.

Packaged Facts provided four macrotrends for 2015 and onwards:

1. Impact of economy: Spending on pet supplies will reflect the economy. With the economy not as strong as it once was many people will continue to keep their spending low. While many people struggle financially they are reporting feeling more affluent than in previous years.
2. Savings are a priority: Saving money is important to people. Approximately 50% of people are spending more on pet products. In the past four years, people have been becoming more comfortable with higher priced pet items. The percentage of people that felt that products were too expensive dropped from 74% to 64%. While people may be comfortable with higher prices they still want to see lower prices and sales; most are looking for a good deal.
3. Premiumization and natural pet products: For at least ten years premiumization has been a strong trend in the pet supply market. Many industry experts believe that premiumization is necessary to maintain profit margins on premium products when compared to normal brands. Premiumization is often closely tied with natural pet products. One driving trend to encourage people to spend more on premium and natural products are the potential health benefits to pets. People will spend more if a product could potentially benefit their pet.
4. Baby boomers are key to market growth: With approximately 77 million baby boomers in the U.S. they are a large force in keeping the pet supply market strong. Many boomers have high incomes and are able to spend large amounts of money. Boomers have also remained willing to share their wealth and lifestyle with their pets as they age. If boomers continue this trend as they become seniors then this promises a continued strong pet supply market.

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