U.S. Pet Market Outlook, 2020-2021: The COVID-19 Impact (June 2020 Update)

 
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Published Jun 22, 2020 | 267 Pages | Pub ID: LA15558259



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U.S. Pet Market Outlook, 2020-2021: The COVID-19 Impact (June 2020 Update)

All four sectors of the U.S. pet industry—pet food, non-food pet supplies, veterinary services, and non-medical pet services—have been challenged by the coronavirus pandemic, whose effects may continue to be felt for years after the medical crisis is past. Pet services rather than pet products are bearing the brunt of the blow, but the business operations of key players increasingly span not only brick-and-mortar and e-commerce but also products and services, medical and non-medical, and foods and non-foods, such that the fortunes of the pet industry are partially intertwined across sectors.

Any quantitative projections of the further impacts of the coronavirus pandemic, and the resulting economic downdraft on the U.S. pet industry, are necessarily tentative. There is no certainty about how long the medical coronavirus crisis (and any resurgences) will last, how prolonged the job and wage losses will be, or how much the pandemic will alter the global market and political relationships on which U.S. economic growth relies. But from an optimistic point of view, few pet market observers will disagree that in the years since 9/11 “pets as family” has given the U.S. pet industry a powerful and enduring boost. And with Americans facing uncertainty on an unprecedented scale and spending more time at home, it is more than likely that “pets as family” will gain additional momentum during the age of coronavirus and beyond.

The market growth projections by sector provided in this report attempts to balance the severity of the economic blow of the coronavirus pandemic with the time-tested strengths of the U.S. pet market—strengths evident even during the initial Q2 2020 phase of COVID-19’s sudden impact. Packaged Facts projects that overall pet market sales will remain flat in 2020, with pet product sales gains offset by pet service sector revenue losses. Despite the coronavirus pandemic impacts, retail sales of pet food and non-food pet supplies will grow in 2020, while the veterinary channel should regain 2019 revenue levels by 2021, as will the non-medical pet care services sector by 2022.

In the wake of COVID-19 market and social impacts, moreover, several pet ownership, retail product, and pet care service segments present new conditions for sales growth. Many of these new opportunities follow from the coronavirus pandemic-triggered surge in pet adoption and acquisition. In contrast to pet adoption patterns in the wake of the Great Recession, the current adoption response has extended across pet types, disproportionately including pets other than dogs and cats, as indicated by the proprietary April/May 2002 consumer survey data provided in this report. In addition, new online and digital opportunities extend beyond e-commerce to emerging areas such as veterinary telemedicine and teletriage.

Scope and Methodology

This report analyzes current and projects future retail sales and trends across the U.S. pet industry, factoring in the known and projected impact of the coronavirus pandemic across all areas of the market, based on the current situation and the expected trajectory of the crisis. It examines collectively and separately four categories of pet products and services—pet food, non-food pet supplies, veterinary services, and non-medical pet services—and details strategic activity in all of the major retail channels, paying particular attention to the market impact of e-commerce and technology-driven and other emerging products and services.

The information contained in this report was obtained from primary and secondary research. Primary research includes national online consumer polls of U.S. adult pet owners (age 18+) conducted on an ongoing basis by Packaged Facts, to measure purchasing patterns and attitudes regarding pet products and services. With sample sizes of approximately 1,000 pet owners, these surveys are based on national online research panels that are census representative on the primary demographic measures of age, gender, geographic region, race/ethnicity, and household income. The surveys used in this report were conducted between February 2019 and May 2020.

Our primary research also includes interviews with pet market experts; participation in pet industry events including the American Pet Products Association’s Global Pet Expos (2004-2020) and Petfood Industry/Watt Publishing’s Petfood Forums (2004-2019); on-site examination of retail and service provider venues; and Internet canvassing, including blogs.

Secondary research includes information- and data-gathering from consumer business and trade publications including Pet Age, Pet Business, Pet Product News International, Petfood Industry, and Veterinary Practice News; company profiles in trade and consumer publications; and information culled from Packaged Facts’ extensive pet market research database and report collection.

Packaged Facts estimates of market size and company performance are based on reported revenues of pet product manufacturers, retailers, and pet services providers; background sales data from sources such as IRI and Nielsen, surveys of independent and chain pet store retailers; government data including U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; and figures from other market research sources.

In addition to proprietary new pet ownership projections for 2020, factoring in the recent surge in pet adoption as well as Q2 2020 product sales trends, this report provides trended 2009/10 through 2019/20 data on pet ownership levels by type based on Simmons Research National Consumer Survey data. On an ongoing basis, Simmons conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-14 month survey compilation), who in aggregate represent a statistically accurate cross-section of the U.S. population. This report draws on Simmons survey releases through Winter 2019/20 (with a sample including 10,151 dog owners, 5,968 cat owners, and 2,785 other pet owners, and field dates of 1/20/2019 through 3/18/20).
  • Executive Summary
    • Scope & Methodology
      • Scope of Report
      • Report Methodology
      • Sales Outlook for 2020-2024
        • Table Modeling of 2020-2024 U.S. Retail Sales of Products and Services (in billions of dollars)
        • Table Modeling of 2020-2024 U.S. Retail Sales of Products and Services: By Sector (in billions of dollars)
        • Table Modeling of 2020-2024 Annual Change in U.S. Retail Sales of Products and Services: By Sector (percent change over previous year)
        • Table U.S. Pet Market Compound Annual Growth Rates by Sector: 2014-2019 vs. 2019-2024 (percent)
      • Pet Food Sales Growth Will Remain Robust
      • Temporary Setbacks Only for Veterinary Sector
      • Non-Food Pet Supply Sales Boosted by Pet Adoption, DIY Grooming
      • Sharpest Hit for Non-Medical Pet Services
        • Table Usage Rates for Pet Care Services: Last 12 Months vs. Last 3 Months, April/May 2020 (percent of dog- or cat-owners)
      • Market Shares by Animal Type
      • E-Commerce and Channel Shares
      • E-Commerce in Context
      • Chewy Ahead in Sales, Amazon in Percent of Online Pet Product Shoppers
      • Pet Tech Products Post Double-Digit Growth
      • Pet Adoption Surge in Response to COVID-19
        • Table Pet Adoption Rates by Type of Pet: Last 12 Months vs. Last 3 months, April/May 2020 (percent of adults)
      • Pet Population Projections for 2020
        • Table Overview of Pet Ownership by Type, 2019 vs. 2020P (percent of and number of U.S. households)
    • Market Opportunities
      • Opportunities Despite the Coronavirus Pandemic
      • Pets as Family as Pet Population Driver
      • E-commerce
      • DIY Pet Grooming and Oral Care
      • Veterinary Telemedicine and Back-Office Systems
      • Private Label
      • Lower Cost Pet Healthcare
      • New Dynamics in Veterinary Sector
      • Pet Tech
      • Pet Medications
      • CBD
      • Pet Food: Rethinking Superpremium
      • DCM Controversy Spurs Grain-Free Pet Food Alternatives
      • Science-Based and Veterinary Diets
      • Subscription-Based Products and Services
      • Focus on Felines
      • Focus on "Other" Pets
      • "Pet Effect" as Pet Population Driver
      • Cause Marketing, Sustainability, Animal Welfare
      • Keeping Pet Care Affordable for Lower-Income Households
  • Market Size and Growth
    • Chapter Highlights
    • Looking Back at 2014-2019
      • Growth in the Age of E-Commerce and IT
        • Table U.S. Pet Market Retail Sales by Sector, 2014-2019 (in billions of dollars)
        • Table U.S. Pet Market Retail Sales Annual Change by Sector, 2014-2019 (percent change over previous year)
      • Pet Product and Servicing Spending Per Pet-Owning Household
        • Table Dollar Sales Per Pet-Owning Household by Sector, 2014-2019 (millions of dollars and dollars)
        • Table Dollar Sales Per Dog-Owning Household by Sector, 2014-2019 (millions of dollars and dollars)
        • Table Dollar Sales Per Cat-Owning Household by Sector, 2014-2019 (millions of dollars and dollars)
        • Table Dollar Sales Per Individual Dog and Cat by Sector, 2019 (millions of dollars and dollars)
    • Sales Outlook for 2020-2024
      • The Coronavirus Pandemic Impact
        • Table Modeling of 2020-2024 U.S. Retail Sales of Products and Services (in billions of dollars)
        • Table Modeling of 2020-2024 U.S. Retail Sales of Products and Services: By Sector (in billions of dollars)
        • Table Modeling of 2020-2024 Annual Change in U.S. Retail Sales of Products and Services: By Sector (percent change over previous year)
        • Table U.S. Pet Market Compound Annual Growth Rates by Sector: 2014-2019 vs. 2019-2024 (percent)
      • Pet Food Sales Growth Will Remain Robust
      • Temporary Setbacks Only for Veterinary Sector
      • Non-Food Pet Supply Sales Boosted by Pet Adoption, DIY Grooming
      • Sharpest Hit for Non-Medical Pet Services
    • Market Shares and Segmentation
      • Channel Share Shifts
        • Table Sector Share of U.S. Pet Market Retail Sales: 2014, 2019, and 2020P (percent)
      • Market Shares by Animal Type
        • Table Sector Share of U.S. Pet Market Retail Sales by Animal Type: Dog, Cat, Other, 2019 (percent)
      • Shares of Pet Product Sales by Channel
        • Table Share of U.S. Retail Channel Sales of Pet Products by Channel Classification: Pet Food & Treats, Non-Food Pet Supplies, Total, 2019 (percent)
      • E-Commerce and Channel Shares
      • Boarding and Grooming Led in Share of Service Sector Revenue in 2019
  • Overall Industry Trends
    • Chapter Highlights
      • Impact of Coronavirus Pandemic
    • Industry Overview
      • "Omnimarket" Era
      • Leading Pet Product Marketers and Brands
      • Leading Veterinary and Non-Medical Pet Service Operators
      • Fast-Growing Franchises and Private Companies
      • Pet Food Leaders Covering All Pet Industry Bases
      • M&A/Investment Activity Slower in 2019
      • Recent Mergers, Acquisitions, Investments, and Restructuring
    • Cross-Sector Market Drivers
      • Subscription-Based Products and Services
      • Cause Marketing
      • Sustainability
      • Animal Welfare
      • E-commerce
      • Investment and M&A
      • Pet as Family
        • Table Level of Agreement with Statement: "I consider my dogs/cats/other pets to be part of the family," 2020 (percent of pet owners)
        • Table Travel Activities of Dog and Cat Owners in Last 12 Months, 2019 (percent of dog owners vs. cat owners)
      • Catering to Deal-Seekers
      • HABRI Documents Human Health Benefits of Pet Ownership
      • Higher-Income Households and Pet Spending
        • Table Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Households, 2001-2018 (percent)
        • Table $70K+ Household Share of U.S. Pet Market Expenditures: By Sector, 2011-2018 (percent)
        • Table $70K+ Household Share of U.S. Pet Market Expenditures: By Sector and Income Level, 2018 (percent)
      • Housing Trends May Crimp Pet Ownership
        • Table Pet Ownership Patterns by Type of Residence: Dogs, Cats, and Other Pets, 2019 (percent of households)
        • Table Patterns by Kind of Residence: Households Overall, Pet-Owning Households, and Households Without Pets, 2009-2019 (in millions of U.S. households)
        • Table Pet Ownership Patterns by Age Bracket: Dogs vs. Cats, 2019 (percentages and number in thousands)
        • Table Rates for Living in an Owned home by Age Bracket, 2019 (percent)
    • Dog- and Cat-Centered Drivers
      • Adoption from Pet Shelters Continues to Supplant Livestock Sales
      • Pets in Public
      • The CBD Boom
      • DCM/Grain-Free Pet Food Situation Remains Unresolved
      • Cats Are Not Second Class
      • Dog and Cat Ownership Down Among Lower-Income Households
        • Table Pet Ownership Base by Household Income Bracket, 2009-2019 (in millions of U.S. households)
        • Table New Dog and Cat Adopter Patterns by Household Income Bracket, 2019 (number, percent, and index)
  • Focus on Pet Food and Treats
    • Chapter Highlights
      • Impact of Coronavirus Pandemic
        • Table Great Recession Perspective on Potential Coronavirus Impacts: Usage Rates for Store-Brand Dry Dog Food, 2006-2013 (percent of dry dog food purchasers)
      • Internet Is Top Growth Channel
      • Mass Premiumization at Expense of Pet Specialty
      • Private-Label Gains
      • Amazon and Chewy Banking on Private-Label Pet Food
      • Fresh Pet Food Makers Taking Aim at Kibble and Canned
      • Kibble Marketers Also Focus on Fresh
      • Industry Shaken by Possible DCM Link
      • A Swing Back to Science-Based and Veterinary Diets?
      • Spotlight on Product Safety
      • Trendy and Sustainable Ingredients and Recipes
      • Cannabidiol (CBD): "Treats" Marketers Seeking to Sidestep Regulators
      • Food for Pets Other Than Dogs or Cats
  • Focus on Non-Food Pet Supplies
    • Chapter Highlights
      • Impact of Coronavirus Pandemic
      • Common Denominators: Pet Health, Technology, E-commerce
      • Pet Tech Products Post Double-Digit Growth
      • Pet Food Marketers Weighing in on Non-Food Supplies
      • Tech Trend Creating New Product Categories
      • Multi-Smart Marketers: Wagz and Petkit Cover Multiple Bases
      • Supplies for Other Pets Go High-Tech
      • Pet Medications and Supplements
        • Table Pet Medications and Pet Supplements Sales, 2019 vs. 2023 (in millions of dollars)
      • CBD Taking Pet Market by Storm
      • Fairness to Pet Owners Act
  • Focus on Veterinary and Pet Care Services
    • Chapter Highlights
      • Impact of Coronavirus Pandemic
        • Table Usage Rates for Pet Care Services: Last 12 Months vs. Last 3 Months, April/May 2020 (percent of dog- or cat-owners)
    • Veterinary Sector Dynamics
      • Not Just Omnichannel—Omnimarket
      • Mars Units Lead Ranks of Veterinary Chains
      • Industry Consolidation
      • Veterinary Usage Rates and Reasons for Visits
      • "Pets as Family," IT, and E-commerce Disrupting Business as Usual
      • Competing Formats Challenging Traditional Practices
      • Veterinary Clinics: What Customers Want
      • Millennials Receptive to Alternative Veterinary Approaches
        • Table Attitudes of Dog or Cat Owners Toward Alternative Veterinary Approaches by Age Bracket, 2020 (percent)
      • PetIQ and Essentials PetCare Opening Walmart-Based Clinics
      • Walgreens and CVS Also Partnering with Veterinary Service Providers
      • Veterinary Services in Big Boxes
      • Petco Continues Push into Veterinary Services
      • Pet Owners Like the Idea of Vet Services in Retail Venues
        • Table Consumer Attitudes on Veterinary Services in Retail Stores, 2019 (percent of pet owners)
        • Table Attitudes of Pet Owners Toward the Availability of Veterinary Services in Retail Outlets: By Age Bracket and Hispanic Origin, 2019 (percent)
    • Virtual Veterinary Pet Care
      • Vet Care Service Providers Going Digital
      • Telemedicine and Teletriage in Pandemic Era
      • Veterinarians Countering E-tailers with Online Pharmacies of Their Own
      • Vet-Connected Pet Wearables
    • Non-Medical Pet Services
      • Impact of Coronavirus Pandemic
      • Topline Market Figures
        • Table Use of Non-Medical Pet Care Services, 2020 (percent of dog and cat owners)
        • Table Average Amount Spent on Non-Medical Pet Care Services in Past 12 Months, 2020 (percent of dog and cat owners)
      • PetSmart and Petco
      • Franchise Operations
      • Best Friends Pet Care
      • Internet as Pet Care Assistant
      • Subscription and Loyalty Programs
      • Battle of the Apps
      • Pet Insurance Posting Double-Digit Growth
        • Table Percent of Dog and Cat Owners Who Have Medical Coverage/Plan for Their Pets, 2020 (percent of dog and cat owners)
      • Emerging Pet Services
  • Retail Trends
    • Chapter Highlights
      • Impact of Coronavirus Pandemic
    • Cross-Channel Competition
      • The New "Omnimarket"
      • Retail Channel Shares
        • Table U.S. Retail Channel Sales of Pet Products: Sales & Shares by Channel Classification, 2018 vs. 2019 (dollar sales in millions and percent share)
      • e-Commerce Remixes Retail
      • The Paradox of Mass Outperforming Specialty
      • Pet Superstores Are the Most Vulnerable to Online Incursion
        • Table Cross-Shopping Rates for Pet Products by Retail Channel, 2019/20 (index for dog/cat owners)
      • Mass Premiumization and Channel Loyalty
    • Focus: E-Commerce
      • E-Commerce/IT Upend Retail Dynamics
      • Online Shopping and Smartphone App Trends
        • Table Pet Owner Base for Selected Online and Smartphone App Activities, 2013/14–2019/20 (use in last 30 days in thousands and percent of U.S. adult pet owners)
      • Online Sales and Share
      • Online Customer Base
      • Online Pet Product Shopper Demographics
      • Frequency of Online Shopping
      • Spending Levels Online
      • Hierarchy of Pet Product Types Purchased Online
      • E-Commerce in Context
      • Chewy Ahead in Sales, Amazon in Percent of Online Pet Product Shoppers
      • Pet Food Subscription and Auto-Replenishment Programs
      • Rapid Home Delivery and Click-and-Collect
      • Leading E-Tailers Setting Their Sights on Pet Medications
      • Amazon's PillPack Acquisition May Lead to Prescription Pet Meds
      • PetMed Express Feeling the Online Heat
  • Topline Pet Population Trends
    • Chapter Highlights
    • Impact of Coronavirus Pandemic
      • Pet Adoption in Response to COVID-19
        • Table Pet Adoption Rates by Type of Pet: Last 12 Months vs. Last 3 months, April/May 2020 (percent of adults)
      • Pet Ownership Projections for 2020
        • Table Overview of Pet Ownership by Type, 2020P (percent of and number of U.S. households)
      • Smaller Dogs Remain Big
        • Table Size of Pet Dogs: Previously Acquired and Recently Acquired, 2019 (percent of dog owners)
      • Aging Pet Population
        • Table Age of Dogs and Cats, 2020 (percent of pet owners)
      • Pet Overweight/Obesity
      • Annually Trended Simmons Data
      • Pet Ownership Trends Over Last Decade
        • Table Pet Ownership Rates by Type of Pet, 2010/11 – 2019/20 (in percent of U.S. households)
        • Table Pet Owner Base by Type of Pet, 2010/11 – 2019/20 (in millions of U.S. households)

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