U.S. Pet Market Outlook, 2017-2018

May 12, 2017
219 Pages - Pub ID: LA15184171
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U.S. Pet Market Outlook, 2017-2018

Drastic channel shifts are at play in the pet industry. Following on the heels of private equity's big bets on brick and mortar, in the form of the industry's two pet super stores -- PetSmart (2014) and Petco (2015) -- the e-commerce channel began to explode with pet product sales.

Then, with brick-and-mortar sales showing weakness, PetSmart (and its private equity backers) adopted an "If you can't beat 'em, buy 'em" strategy, purchasing Chewy.com in April 2017 in what is considered the biggest e-commerce deal ever, surpassing Walmart's acquisition of Jet.com in 2016.

And over on the veterinary side of things, Mars Inc. scooped up VCA Inc. in a $7.7 billion deal in January 2017, making its already sizable presence in veterinary care even more impressive.

Going back to those first two deals, the PetSmart deal was one of the largest private equity deals of 2014 and the Petco deal was one of the largest leveraged buyouts of 2015.

All of this activity proves that the pet market is a great industry in which to do business these days. And Packaged Facts’ U.S. Pet Market Outlook, 2017-2018 is the premier source for keeping tabs on this dynamic industry.

With this latest edition of our Pet Market Outlook, Packaged Facts delivers all you need to know about the pet industry in one source. This year’s edition includes the latest in market sizing and projections, hot new product trends, as well as data from Packaged Facts proprietary Pet Owners Survey. The report analyzes mergers and acquisitions, retail channel trends, and pet owner demographics and spending habits.

Scope

Combining Packaged Facts’ extensive monitoring of the pet market with a proprietary Pet Owner Survey hot off the presses—U.S. Pet Market Outlook, 2017-2018 is the go-to source for a complete understanding of the U.S. pet industry. The report evaluates current trends and future directions for marketing and retailing, along with consumer patterns across the full spectrum of the market, including veterinary services, pet food, nonfood pet supplies, and non-medical pet services (grooming, boarding, training, etc.).

The report forecasts market size and growth for each category; examines new product activity; surveys retail channel trends including cross-channel shopping vs. shopper loyalty; and analyzes trends and shifts in the needs of today’s pet parents. The report tabulates pet product sales channel by channel. Supplementing Packaged Facts’ exclusive Pet Owner Survey is an extensive analysis of Simmons’ National Consumer Study, which is based on approximately 25,000 adult respondents surveyed annually. The report contains dozens of numerical tables and charts, as well as numerous photographs of new products, advertising, screen shots and other images across key channels.
CHAPTER 1: EXECUTIVE SUMMARY
INTRODUCTION
Age of Ecommerce
Scope and Methodology
Report Methodology
MARKET PERFORMANCE
Pet Industry Sees Growth Amid Change
Table 1-1 U.S. Pet Market Retail Sales by Category, 2012-2016 (in billions of dollars)
Market Share by Category and Animal Type
Share of Pet Product Sales by Channel
Table 1-2 Share of U.S. Retail Channel Sales of Pet Food, Pet Supplies and Pet Products: By Channel Classification, 2016 (percent)
Economy Still Enervated, But Many Indicators Are Positive
A Third Spend Less
Small Dogs Rule, But Medium Sizes Rebound
Table 1-3 Size of Pet Dogs, 2012-2017 (percent of dog owners)
Pampering Your Pet Family
Millennials and Health & Wellness
INDUSTRY TRENDS
Market Structure
M&A and Investment Activity
Veterinary Services Landscape
Experiences Drive Traffic at Pet Specialty
Pet Tech and Innovation
Natural Food Continues Its Top Position
Proteins
Calming Products
RETAIL TRENDS
A Piece of the Pet Product Pie
Consumer Still Seek Deals, Discounts
Table 1-4 Level of Agreement with Statement: “I look out for lower prices, special offers, and sales on pet products,” 2013-2017 (percent)
Channel Disloyalty
Walmart Tops Among Pet Product Shoppers
Ever-Increasing Online Shopping
PET OWNERSHIP TRENDS
Over Half of Households Own Dogs or Cats
Table 1-5 Household Penetration Rates for Selected Pet-Owning Classifications, 2012-2016 (percent and number of U.S. households in millions)
Dog and Cat Ownership Rates by Age Bracket
Table 1-6 Dog or Cat Ownership Rates by Age Bracket, 2010-2016 (percent of U.S. households)
A Third of Pet Households Keep Multiple Types
Millennials and Boomers
Pet Ownership Grows Among Minorities
CHAPTER 2 MARKET TRENDS
CHAPTER HIGHLIGHTS
MARKET PERFORMANCE
Pet Industry Sees Growth Amid Change
Table 2-1 U.S. Pet Market Retail Sales by Category, 2012-2016 (in billions of dollars)
Table 2-2 U.S. Pet Market Retail Sales Annual Change by Category, 2012-2016 (percent change over previous year)
Table 2-3 Projected Total U.S. Retail Sales of Pet Products and Services, 2016-2021 (in billions of dollars)
Table 2-4 Projected U.S. Pet Market Retail Sales by Category, 2017-2021 (in billions of dollars)
Table 2-5 U.S. Pet Market Compound Annual Growth Rates by Category: 2011-2016 vs. 2016-2021 (percent)
Market Share by Category and Animal Type
Table 2-6 Category Share of U.S. Pet Market Retail Sales: 2011, 2016, 2021 (percent)
Table 2-7 Category Share of U.S. Pet Market Retail Sales by Animal Type: Dog, Cat, Other, 2016 (percent)
Share of Pet Product Sales by Channel
Table 2-8 Share of U.S. Retail Channel Sales of Pet Food, Pet Supplies and Pet Products: By Channel Classification, 2016 (percent)
Table 2-9 Share of U.S. Retail Channel Sales of Pet Products: By Channel Classification, 2014-2017 (percent)
Pet Industry’s Impact
Table 2-10 Select Pet Industry Businessess, Employees and Revenue
Table 2-11 Number of Employed and Median Income, Select Pet Industry Occupations
Mass and Pet Specialty Channel Sales Are Generally Flat
Natural Supermarket Sales Up 3%
Table 2-12 Retail Dollar Sales of Pet Products in the Natural Supermarket Channel:
By Category and Segment, 52 Weeks Ending March 2016 vs. March 2017 (in millions of dollars)
Table 2-13 Share of Retail Dollar Sales of Pet Products in the Natural Supermarket Channel: By Category and Segment, 52 Weeks Ending March 2016 vs. March 2017 (percent)
Specialty/Gourmet Supermarket Sales Down
Table 2-14 Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel: By Category and Segment, 52 Weeks Ending March 2016 vs. March 2017 (in millions of dollars)
Table 2-15 Share of Retail Dollar Sales of Pet Products in the Specialty/Gourmet Supermarket Channel: By Category and Segment, 52 Weeks Ending March 2016 vs. March 2017 (percent)
MARKET DRIVERS
Economy Still Enervated, But Many Indicators Are Positive
Table 2-16 Pet Owners: Overview by Change in Financial Situation Compared with 12 Months Ago, 2013-2016 (percent of and index for U.S. pet-owning households)
Table 2-17 Pet Owners: Overview by Expectations for Personal Financial Situation Over the Next 12 Months, 2013-2016 (percent of and index for U.S. pet-owning households)
A Third Spend Less
Table 2-18 Level of Agreement with Statement: “I am spending less on pet products because of the economy,” 2011-2017 (percent)
Table 2-19 Level of Agreement with Statement: “Many pet products are becoming too expensive,” 2011-2017 (percent)
Table 2-20 Amount Spent on Pet Products in Last 30 Days, February 2017 (percent by spending bracket)
Table 2-21 Pet Food Purchasing by Price Level, 2015-2017 (percent of dog owners vs. cat owners)
Pet Ownership Trends
Table 2-22 Household Penetration Rates for Selected Pet-Owning Classifications, 2012-2016 (percent of and number of U.S. households in millions)
Sources for Pets
Small Dogs Rule, But Medium Sizes Rebound
Table 2-23 Size of Pet Dogs, 2012-2017 (percent of dog owners)
Table 2-24 Size of Most Recently Acquired Pet Dog, 2014-2017 (percent of dog owners)
Illustration 2-1 Screenshot from Cesar Dry TV Commercial
Senior, Weight Management, and Special Needs Products
Figure 2-1 Share of U.S. Retail Sales of Senior, Weight Management and Special Needs Pet Products: By Category, 2015 (percent)
Age of Pets
Table 2-25 Age of Dogs and Cats, 2017 (percent of pet owners)
Weighty Issues
Table 2-26 Agreement with Statement: “I have an overweight dog/cat,” 2016 vs. 2017 (percent of pet owners)
Industry Banks on Higher-Income Households
Table 2-27 Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Households, 2001-2015 (percent)
Table 2-28 $70K+ Household Share of U.S. Pet Market Expenditures: By Category, 2009-2015 (percent)
Keeping Pet Owners Healthy
Table 2- 29 Agreement with Statement: “My dog or cat has a positive impact on my mental health,” 2017 (percent)
Table 2-30 Agreement with Statement: “My dog or cat has a positive impact on my physical health,” 2017 (percent)
Pampering Your Pet Family
Humanization
Illustration 2-2 Black Labels Across Categories
Illustration 2-3 CitiKitty Toilet Training System
Health and Wellness
Table 2-31 Level of Agreement with Statement: “I am willing to pay more for pet food products that are healthier for my pets,” by Age Bracket, 2017 (percent)
Cause Marketing
Table 2-32 Level of Agreement with Statement: “The participation by pet product retailers in pet welfare and rescue causes and events plays a significant role in where I buy pet products,” 2014-2017 (percent)
Table 2-33 Level of Agreement with Statement: “The participation by pet product brands in pet welfare and rescue causes and events plays a significant role in which brands I buy,” 2014-2017 (percent)
Table 2-34 Agreement with Statement: “I have contributed time or money to pet welfare or rescue causes,” 2016 vs. 2017 (percent of dog owners vs. cat owners)
CHAPTER 3: INDUSTRY TRENDS
CHAPTER HIGHLIGHTS
INTRODUCTION
Market Structure
M&A and Investment Activity
Illustration 3-1
Rover and DogVacay Joining Forces
Illustration 3-2
K&H’s Thermo-Mod Dream Pod
Illustration 3-3
Online Ad for Royal Canin at PetFlow
PET SERVICES
Continued Consolidation of Services
Veterinary Services Landscape
Pet Owners Rely on Vet Advice
Table 3-1 Percentage of Dog and Cat Owners Who Rely on Their Veterinarian for Advice, by Topic of Advice, 2016
Veterinary Visit Statistics
Table 3-2 Percentage of Dog and Cat Owners Who Have Visited Vet in Last 12 Months for Routine and Sick/Emergency Vet Visits, 2016
Veterinary Visits Outside of the Clinic
Table 3-3 Percentage of Dog and Cat Owners Who Would Be Interested in Having a Veterinarian Visit Their Home or Work for Routine Health Services, 2016
Veterinary Services Inside Pet Superstores
Table 3-4 Percentage of Dog or Cat Owners Who Have Taken Pets to a Pet Superstore for Veterinary Services in Last 12 Months, 2016 vs. 2017
Mobile Clinics
Table 3-5 Percentage of Dog or Cat Owners Who Have Visited a Mobile Veterinary Clinic in Last 12 Months, 2017
Oral Care Services
Figure 3-1 Level of Agreement with Statement: “I am concerned about the dental hygiene/breath odor of my pets,” 2017 (percent)
Fairness to Pet Owners Act
Experiences Drive Traffic at Pet Specialty
Illustration 3-4
Screenshot of Petco’s “Getting to Know You” Ad
Table 3-6 PetSmart and Petco Sales of Pet Services, 2001-2016 (separately and combined, in millions of dollars)
Table 3-7 Percentage of Dog or Cat Owners Who Have Taken Pets to a Pet Superstore for Non-Medical Pet Services in Last 12 Months, 2016 vs. 2017 (percent)
Top Service Types
Table 3-8 Top Pet Service Types: Last 12 Months vs. Last 30 Days, 2017 (percent of dog owners vs. cat owners)
Pet Tech and Innovation
Illustration 3-5
Petcube Ad on Facebook
Fast-Growing Pet Companies
PET PRODUCTS
Natural Food Continues its Top Position
Figure 3-2 Level of Agreement with Statement: “Natural/organic brand pet products are often better than standard national brand products,” 2016 vs. 2017 (percent of pet owners)
Grain-Free and Other Free-Of Claims
Table 3-9 Dog and Cat Owners Currently Using Pet Food: By Free-Of Claim, 2017 (percent)
Illustration 3-6
Wellness Complete Health Grain Free
Illustration 3-7
Facebook Post for Milk-Bone Farmer’s Medley
Ancestral
Illustration 3-8 Merrick Backcountry Hero’s Banquet Stew
Proteins
Table 3-10 Agreement with Statement: “My dog/cat needs a high-quality protein diet,” 2017 (percent of dog owners vs. cat owners)
Senior, Weight Management and Special Needs Products Near $3.8 Billion
Figure 3-3 Share of U.S. Retail Sales of Senior, Weight Management and Special Needs Pet Products by Category, 2015 (percent)
Pet Food’s Preventive Health Benefits
Table 3-11 Level of Agreement with Statement: “High-quality dog foods/cat foods are effective for preventive health care,” 2015-2017 (percent)
Safety is Our First Concern
Table 3-12 Level of Agreement with Statement: “Fear of pet food contamination/ product safety is a key consideration in the dog foods/cat foods I buy,” 2015-2017 (percent of dog owners vs. cat owners)
Table 3-13 Level of Agreement with Statement: “I am concerned about the safety of the dog food, dog treat, and dog chew products (or cat food and treat products) that I buy,” 2015-2017 (percent of dog owners vs. cat owners)
Figure 3-4 Level of Agreement with Statement: “I consider natural and organic pet foods to be safer than regular pet foods,” 2017 (percent)
Pet Supplement Sales Experience Modest Growth in 2016
Supplements as Preventive Care May Lower Vet Costs
Food Toppers
Treat Trends
Table 3-14 Dog and Cat Treats Purchased By Pet Health Condition or Concern, Last Three Months (percent)
Illustration 3-9
Coupon Sign-Up Form for Beneful Break-n-Bites
Prevalence of Holiday-Themed Pet Products and Services
Table 3-15 Agreement with Statement: “Over the recent Christmas/ Winter Holiday season, my dog(s)/cat(s) got special gifts or treats,” 2016 vs. 2017 (percent of dog owners vs. cat owners)
Illustration 3-10 PetRageous Designs’ Holiday Sweaters
Illustration 3-11 Party City’s Star Wars Yoda Costume
Illustration 3-12 Holiday Display Cases for Big Heart Pet Brands Treats
The Nonfood Pet Supplies Market
Calming Products
Figure 3-5 Pet Calming Product Usage, 2016 (percent of dog or cat owners)
Table 3-16 Purchase of Products to Relieve a Pet’s Anxiety/Stress, Last 12 Months (percent of dog owners vs. cat owners)
Table 3-17 Purchase of any type of pet food, pet treat, or pet vitamin/supplement to target calming or motion sickness, 2016 (percent of dog owners vs. cat owners)
Illustration 3-13 SILEO Noise Aversion Gel
Illustration 3-14 Petmate’s CALMZ Anxiety Relief System
Illustration 3-15 Facebook Post for Comfort Zone Adaptil Diffuser
Keeping It Fresh with Litter and Clean-up Products
Illustration 3-16 Screenshot of Arm & Hammer Slide TV Spot
Illustration 3-17 2017 Fresh Step with Febreze Innovations
Illustration 3-18 BH Pet Gear’s EmojiNation Pet Line Poop Bag
Non-Dog/Cat Pet Products
Pet Travel
Table 3-18 Travel Activities of Dog and Cat Owners in Last 12 Months, 2017 (percent of dog owners vs. cat owners)
Durable Dog and Cat Products
Illustration 3-19 K&H’s EZ Mount Window Bubble Pod
CHAPTER 4: RETAIL TRENDS
CHAPTER HIGHLIGHTS
A Piece of the Pet Product Pie
Discount Fever Doesn’t Abate
Table 4-1 Level of Agreement with Statement: “I look out for lower prices, special offers, and sales on pet products,” 2013-2017 (percent)
Spending More on Pet Products
Table 4-2 Level of Agreement with Statement: “I am willing to pay more for pet food products that are healthier for my pets,” 2017 (percent)
Coupon Use Close to Pre-Recession Levels
Table 4-3 Percent Who Use Pet Food Coupons: Dog Owners vs. Cat Owners, 2011- 2016 (percent)
Channel Loyalty
Table 4-4 Channel Loyalty in Pet Product Purchasing: All Channels, 2008-2016 (percent and number)
Table 4-5 Share of Customer Base Who Are Channel-Loyal by Leading Retail Channels or Pet Superstore Chains, 2010-2016 (percent)
Table 4-6 Channel-Loyal Customer Base for Pet Products by Leading Retail Channels or Pet Superstore Chains, 2010-2016 (number in thousands)
Pet Product Purchasing Rates by Channel
Table 4-7 Household Purchasing Overview for Pet Products by Retail Classification: U.S. Households Overall vs. Dog or Cat Owners, 2016 (number and percent)
Purchase Trends by Channel
Table 4-8a Purchasing Rates for Pet Products by Selected Retail Channels and Pet Superstore Chains, 2011-2016 (percent)
Table 4-8b Purchasing Base for Pet Products by Selected Retail Channels or Pet Superstore Chains, 2011-2016 (U.S. dog or cat owners in thousands)
Walmart Tops Among Pet Product Shoppers
Table 4-9 Channel Choices for Pet Product Shopping, Last Three Months: Pet Food, Pet Medications, Other Pet Supplies, 2016 vs. 2017 (percent of pet product buyers)
Private Label Has Bright Spots
Illustration 4-1 Private Label Cat Litter at Target
Illustration 4-2 Tractor Supply’s 4Health Special Care line
Illustration 4-3 Trade Ad for Simmons Pet Food
Illustration 4-4 Chewy’s Tylee’s Brand
THE MASS-MARKET
Walmart and Pets
Illustration 4-5 Sponsored Blog Post about Nature’s Recipe at Walmart
Pet Deals at Target
Illustration 4-6 Sponsored Blog Post for Target and Purina
PetSmart and Petco’s Sales Pass $12 Billion Mark
Table 4-10 PetSmart and Petco Sales and Number of Stores, 2001-2016 (aggregated, in units and millions of dollars)
Illustration 4-7 Petco Drs. Foster & Smith Signage
The Strategy of Exclusivity
Illustration 4-8
PetSmart’s Secret Life of Pets Partnership
Illustration 4-9 Vanderpump Pet Facebook Page
Other Pet Specialty Players
Supermarkets
Illustration 4-10 PetCakes Available at Kroger
Illustration 4-11 Michigan Kroger’s Twitter Post for April Fools Deal
Illustration 4-12 Stop & Shop’s Holiday Dog Toy Coupon Post
Illustration 4-13 H-E-B’s Heritage Ranch Brand with On-Trend Labeling
Wholesale Clubs
Online Sales
Table 4-11 Level of Agreement with Statement: “I am buying pet products online more than I used to,” 2012-2017 (percent)
Table 4-12 Time Frame for Most Recent Online Purchase of Pet Products, 2012-2017 (percent of pet owners)
Illustration 4-14
Petco.com and Nutro Max Ad
Illustration 4-15
Wag.com Redirecting to Amazon.com
Pet Products in Professional Channels
Agricultural/Feed-Seed Stores
Home Improvement Stores and Hardware Stores
Illustration 4-16 Lowe’s #NationalPuppyDay Twitter Post
Illustration 4-17 Lowe’s Twitter Post About Veteran and Service Dog Employees
CHAPTER 5: PET OWNERSHIP TRENDS
CHAPTER HIGHLIGHTS
Dog and Cat Owners Make Up Bulk of Pet Owners
Table 5-1 Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2011-2016 (percent of U.S. households)
Table 5-2 Household Populations for Selected Dog- or Cat-Owning Classifications, 2011-2016 (thousands of U.S. households)
Table 5-3 Household Penetration Rates for Selected Pet-Owning Classifications, 2012-2016 (percent of and number of U.S. households in millions)
Dog and Cat Ownership Rates by Age
Table 5-4 Dog or Cat Ownership Rates by Age Bracket, 2010-2016 (percent of U.S. households)
A Third of Pet Households Keep Multiple Types
Table 5-5 Multiple Pet Ownership by Animal Type, 2011 vs. 2016 (percent of pet-owning households)
Table 5-6 Ownership of Multiple Pets of a Single Type, 2012 vs. 2016 (percent of U.S. households who own a given type of pet)
Millennials and Boomers
Table 5-7 Household Penetration Rates for Selected Pet-Owning Classifications: By Generational Cohort, 2016 (percent of U.S. households)
Table 5-8 Household Populations for Selected Pet-Owning Classifications: By Generational Cohort, 2016 (number of U.S. households in thousands)
Table 5-9 Indexes for Selected Pet-Owning Classifications: By Generational Cohort, 2016 (U.S. households)
Table 5-10 Indexes for Dog or Cat Ownership: By Age Cohort, 2012 vs. 2016 (U.S. households)
Table 5-11 Total U.S. Population Growth for Selected Age Brackets, 2015-2060 (in thousands)
Table 5-12 Share of Total U.S. Population Growth for Selected Age Brackets, 2015-2060 (in percent)
Household Composition
Table 5-13 Dog/Cat Ownership Rates by Household Composition, 2010-201 (percent)
Table 5-14 Share of Total Dog/Cat Owners by Household Composition, 2010-2016 (percent)
Dog vs. Cat Households
Table 5-15 Dog Ownership Rates by Household Composition, 2010-2016 (percent)
Table 5-16 Share of Total Dog Owners by Household Composition, 2010-2016 (percent)
Table 5-17 Cat Ownership Rates by Household Composition, 2010-2016 (percent)
Table 5-18 Share of Total Cat Owners by Household Composition, 2010-2016 (percent)
Pet Ownership Grows Among Minorities
Table 5-19 Change in Pet Market Consumer Base: White Non-Hispanics vs. Minorities, 2012 vs. 2016 (number and percent of U.S. dog- or cat-owning households)
Table 5-20 Dog and Cat Ownership Trends by Race/Ethnicity, 2010-2016 (percent and number of U.S. dog- or cat-owning households)
Table 5-21 Dog vs. Cat Ownership Trends by Race/Ethnicity, 2012 vs. 2016 (percent and number of U.S. dog- or cat-owning households)
Illustration 5-1 Screenshot from Purina Spanish Language TV Spot
Illustration 5-2 Dog Chow Packaging Featuring Employee and His Dog
Illustration 5-3 Screenshots from English- and Spanish-language Nexgard Ads
Table 5-22 Demographic Snapshot of the U.S. Population, 2014
Table 5-23 Projected Population Growth of Hispanics, 2015-2060 (in thousands)

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