U.S. Pet Market Outlook, 2016-2017

Apr 29, 2016
178 Pages - Pub ID: LA5787124
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U.S. Pet Market Outlook, 2016-2017



The pet industry picked up the pace in 2015, improving over a slower growth rate in 2014. Looking ahead, the future of the industry will be even brighter based on projections in U.S. Pet Market Outlook 2016-2017. Packaged Facts estimates that 2016 will maintain the industry’s growth. With pet owners able to enjoy the warmer than usual weather the country has been experiencing, pet owners will likely not feel inhibited from taking their pets outside, and perhaps making a stop for food and supplies along the way. In addition, private equity has shown considerable interest in pet retail, with a host of investments in the major players – including PetSmart, Petco and Pet Supermarket. The veterinary channel is also seeing changes, including acquisitions from Mars PetCare and VCA. Services, both veterinary and non-medical, have been moving across channels, as more retailers offer grooming, boarding, training and veterinary clinics.Ultimately, Packaged Facts expects the industry to have sales increasing noticeably through 2020.

Scope and Methodology



This report projects U.S. pet market retail sales and trends during the 2016-2017 forecast period, overall and for the four categories: veterinary services, pet food, nonfood pet supplies, and non-medical pet services. It examines the most important developments shaping the market and their implications, including external and internal market drivers, industry trends (mergers and acquisitions, marketing, new product development, etc.), retail channel trends, and trends in pet ownership.

Report Methodology



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 with regard to pet products and services. With a sample size of approximately 2,000, 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.

Our primary research also includes interviews with pet market experts; participation in and attendance at pet industry events including the American Pet Products Association’s Global Pet Expos (2004-2016) and Petfood Industry/Watt Publishing’s Petfood Forums (2004-2016); 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.

Our estimates of market size and company performance are based on reported revenues of pet product manufacturers, retailers, and pet services providers; sales data from IRI for multi-outlet (MULO), which represents sales through U.S. supermarkets, drugstores, mass merchandisers (Walmart, Target, Kmart, and Shopko), Sam’s Club and BJ’s warehouse clubs, dollar stores excluding Dollar Tree, and military commissaries; SPINSscan Natural data from SPINS, Inc., which tracks sales in the natural supermarket channel and in the specialty gourmet supermarket channel; GfK Point-of-Sale Tracking for pet food in the pet specialty, veterinary and farm/feed channels; 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.

Our analysis of pet ownership trends primarily relies on cross-tabulations of data compiled by Simmons, New York, NY. On an ongoing basis, Simmons conducts booklet-based surveys of a large and random sample of consumers who in aggregate represent a statistically accurate cross-section of the U.S. population. On an ongoing basis, Experian Marketing Services conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population.

Chapter 1: Executive Summary
Introduction
Scope and Methodology
Report Methodology
Market Performance
Pet Industry Picks Up Pace
Table 1-1 U.S. Pet Market Retail Sales by Category, 2011-2015(in billions of dollars)
Market Share by Category and Animal Type
Reduced Spending Remains the New Normal for Some
Table 1-2 Level of Agreement with Statement: “I am spending less on pet products because of the economy,” 2011-2016 (percent)
Older Pets
Small Dog Trend
Higher-Income Households Crucial to Industry
Human/Animal Bond a Key Catalyst
Humanization
Digital Usage
Industry Trends
Market Structure
M&A and Investment Activity
Veterinary Services Inside Pet Superstores
Mobile Clinics Encroaching on Veterinarian Turf
Innovation in the Pet Industry
Natural Food Dominates the Pet Food Market
Retail Trends
Ubiquity of Pet Products
The Demand for Discounts
Table 1-3 Level of Agreement with Statement: “I look out for lower prices, special offers, and sales on pet products,” 2013-2016(percent)
Purchase Trends by Channel
Walmart Has Largest Draw Among Pet Product Shoppers
Pet Ownership Trends
Pet Ownership at 56% of U.S. Households
Table 1-4 Household Penetration Rates for Selected Pet-Owning Classifications, 2011-2015 (percent of and number of U.S. households in millions)
Dog and Cat Ownership Rates by Age
Table 1-5 Dog or Cat Ownership Rates by Age Bracket, 2009-2015(percent of U.S. households)
Multiple Pet Ownership Trends
Boomers and Millennials
Chapter 2 Highlights
Chapter 2: Market Trends
Market Performance
Pet Industry Picks Up Pace
Table 2-1 U.S. Pet Market Retail Sales by Category, 2011-2015(in billions of dollars)
Table 2-2 U.S. Pet Market Retail Sales Annual Change by Category,2011-2015 (percent change over previous year)
Table 2-3 Projected Total U.S. Retail Sales of Pet Products and Services, 2015-2020 (in billions of dollars)
Table 2-4 Projected U.S. Pet Market Retail Sales by Category,2016-2020 (in billions of dollars)
Table 2-5 U.S. Pet Market Compound Annual Growth Rates by Category: 2010-2015 vs. 2015-2020 (percent)
Market Share by Category and Animal Type
Table 2-6 Category Share of U.S. Pet Market Retail Sales: 2010, 2015,2020 (percent)
Table 2-7 Category Share of U.S. Pet Market Retail Sales by Animal
Type: Dog, Cat, Other, 2015 (percent)
Share of Pet Product Sales by Channel
Table 2-8 Share of U.S. Retail Channel Sales of Pet Products by Channel Classification, 2015 (percent)
IRI-Tracked Channels See Gains
Table 2-9 IRI-Tracked Sales of Pet Products: Total and by Food and Nonfood Category and Segment, December 2015 (in millions of dollars, units and pounds)
Pet Food Keeps Rolling in Pet Specialty Channels
Table 2-10 Retail Dollar Sales of Pet Food in Pet Specialty, Veterinary and Farm/Feed Channels, 2015 (in billions of dollars)
Pet Food Sales Trends in Natural and Specialty/Gourmet Supermarkets
Table 2-11 Retail Dollar Sales of Pet Food and Pet Care in the Natural Supermarket and Specialty/Gourmet Channels, 2014 vs. 2015(in millions of dollars)
Market Drivers
Consumers Optimistic About Economy, Depending on Whom You Ask
Table 2-12 Pet Owners: Overview by Change in Financial Situation Compared with 12 Months Ago, 2012-2015 (percent and index for U.S. pet-owning households)
Table 2-13 Pet Owners: Overview by Expectations for Personal
Financial Situation Over the Next 12 Months, 2012-2015(percent and index for U.S. pet-owning households)
Reduced Spending Remains the Norm for Some
Table 2-14 Level of Agreement with Statement: “I am spending less on pet products because of the economy,” 2011-2016 (percent)
Consumers Tend to Consider Pet Products Too Expensive
Table 2-15 Level of Agreement with Statement: “Many pet products are becoming too expensive,” 2011-2016 (percent)
Pet Owners’ Monthly Spend
Table 2-16 Amount Spent on Pet Products in Last 30 Days, February 2016 (percent by spending bracket)
Table 2-17 Pet Food Purchasing by Price Level, 2014-2016 (percent of dog owners vs. cat owners)
Pet Ownership and Population Trends
Table 2-18 Household Penetration Rates for Selected Pet-Owning Classifications, 2011-2015 (percent of and number of U.S. households in millions)
Give Me Shelter
Pet Owners Downsize
Table 2-19 Size of Pet Dogs, 2012-2016 (percent of dog owners)
Table 2-20 Size of Most Recently Acquired Pet Dog, 2014-2016(percent of dog owners)
The Market for 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)
Older Pets
Table 2-21 Age of Dogs and Cats, 2016 (percent of pet owners)
Failing to Recognize a Weight Problem
Table 2-22 Agreement with Statement: “I have an overweight dog/cat,”2015 vs. 2016 (percent)
Industry Banks on Higher-Income Households
Table 2-23 Share of Total U.S. Pet Market Expenditures: $70K+ vs.Under $70K Income Households, 2001-2014 (percent)
Table 2-24 $70K+ Household Share of U.S. Pet Market Expenditures:By Category, 2009-2014 (percent)
Human/Animal Bond a Key Catalyst
Table 2-25 Pet Food Purchasing by Price Level, 2014-2016 (percent of dog owners vs. cat owners)
Table 2-26 Agreement with Statement: “My dog or cat has a positive impact on my physical health,” 2016 (percent)
Table 2-27 Agreement with Statement: “I enjoy purchasing pet products that pamper my dog or cat,” 2016 (percent)
Table 2-28 Level of Agreement with Pampering Statements, 2016(percent)
Humanization
Classroom Pets
Digital Usage
Table 2-29 Technologies Used in the Last Seven Days, Pet Owners Vs. Non-Pet Owners
All for a Good Cause
Table 2-30 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,” 2014-2016 (percent)
Table 2-31 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,” 2014-2016 (percent)
Table 2-32 Agreement with Statement: “I have contributed time or money to pet welfare or rescue causes,” 2015 vs. 2016 (percent of dog owners vs. cat owners)
Chapter 3 Highlights
Chapter 3: Industry Trends
Introduction
Market Structure
M&A and Investment Activity
Petco Stirs Up Rumors, Then Lands with New Private Equity Firm
Mars PetCare Adds to Veterinary Portfolio
Mars PetCare Buys Whistle
More Veterinary Practices Consolidate
Petco, Blue Buffalo IPO Filings Offer Glimpse into Operations
Table 3-1 Blue Buffalo’s Net Sales and Growth, 2010-2015(in millions of dollars and percent change)
Jaguar Animal Health Runs to Public Markets
Oasmia Debuts on NASDAQ
Sanofi and Boehringer Ingelheim in Talks Over Merial
Bayer Could Consider Sale
Nestlé Purina Acquires Merrick
Wellpet Acquires Sojos
Dechra Acquires Putney
Patterson Buys Animal Health International
Distributor Consolidation Continues
Other Deals
Pet Services
Retailers and Vets Continue to Add Services
Veterinary Services Led by Banfield and VCA
Veterinary Services Inside Pet Superstores
Table 3-2 Percentage of Dog or Cat Owners Who Have Taken Pets to a Pet Superstore for Veterinary Services in Last 12 Months, 2016
Veterinary Visit Statistics
Table 3-3 Percentage of Dog and Cat Owners Who Have Visited Vet in Last 12 Months, 2016
Oral Care Services
Figure 3-1 Level of Agreement with Statement: “I am concerned about the dental hygiene/breath odor of my pets,” 2015 (percent)
Mobile Clinics Encroaching on Veterinarian Turf
Table 3-4 Percentage of Dog or Cat Owners Who Have Visited a Mobile Veterinary Clinic in Last 12 Months, 2016
Fairness to Pet Owners Act
Pet Specialty Chains Bank on Non-Medical Services
Table 3-5 PetSmart and Petco Sales of Pet Services, 2001-2015(separately and combined, in millions of dollars)
Table 3-6 Percentage of Dog or Cat Owners Who Have Taken Pets to a Pet Superstore for Non-Medical Pet Services in Last 12 Months,2016 (percent)
Top Service Types
Table 3-7 Top Pet Service Types: Last 12 Months vs. Last 30 Days,2016 (percent of dog owners vs. cat owners)
Innovation in the Pet Industry
Pet Products
New Product Roundup
Preventive Health Benefits of Pet Food Emphasized
Table 3-8 Level of Agreement with Statement: “High-quality dog foods/cat foods are effective for preventive health care,”2014-2016 (percent)
Product Safety Drives Purchase Decisions
Table 3-9 Level of Agreement with Statement: “Fear of pet food contamination/ product safety is a key consideration in the dog foods/cat foods I buy,” 2014-2016 (percent of dog owners vs. cat owners)
Table 3-10 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,” 2014-2016 (percent of dog owners vs. cat owners)
Figure 3-2 Level of Agreement with Statement: “I consider natural and organic pet foods to be safer than regular pet foods,” 2016 (percent)
Natural Food Dominates the Pet Food Market
Figure 3-3 Level of Agreement with Statement: “Natural/organic brandpet products are often better than standard national brand products,”2012 vs. 2014 vs. 2016 (percent of pet owners)
Interpreting Natural
Pet Food Leaders
Grain-Free and Other Free-Of Claims
Table 3-11 Dog and Cat Owners Currently Using Pet Food, By Free-Of Claim, 2015 (percent)
What’s New in Ancestral
Proteins
Table 3-12 Agreement with Statement: “My dog/cat needs a highquality protein diet,” 2016 (percent of dog owners vs. cat owners)
Senior, Weight Management and Special Needs Products Near $3.8 Billion
Figure 3-4 Share of U.S. Retail Sales of Senior, Weight Management and Special Needs Pet Products by Category, 2015 (percent)
Diets for Every Pet Type
Home-Cooked Pet Food
Food Toppers
Treat Trends
Oral Care Products
Trends in Non-Dog/Cat Pet Food
Holiday-Themed Pet Products and Services on the Rise
Table 3-13 Agreement with Statement: “Over the recent Christmas/ Winter Holiday season, my dog(s)/cat(s) got special gifts or treats,”2015 vs. 2016 (percent of dog owners vs. cat owners)
The Nonfood Pet Supplies Market
Pet Supply Sales Has Multiple Drivers
The Pet Medications Market
Multi-Tier Market: Veterinary, Pet Specialty, and Mass
Figure 3-5 Share of U.S. Retail Sales of Pet Medications by Distribution Channel, 2015 (percent)
Lightweight Now Heavyweight in Litter Category Pet Travel
Table 3-14 Travel Activities of Dog and Cat Owners in Last 12 Months,2016 (percent of dog owners vs. cat owners)
Crates, Carriers, and Pet Shelters
Chapter 4 Highlights
Chapter 4: Retail Trends
Ubiquity of Pet Products
The Demand for Discounts
Table 4-1 Level of Agreement with Statement: “I look out for lower prices, special offers, and sales on pet products,” 2013-2016(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,” 2015 (percent)
Coupon Use Goes Down
Figure 4-1 Percent Who Use Pet Food Coupons: Dog Owners vs.Cat Owners, 2010- 2015 (percent)
Consumer Loyalty Levels Off
Table 4-3 Channel Loyalty in Pet Product Purchasing: All Channels,2008-2015 (percent and number)
Table 4-4 Share of Customer Base Who Are Channel-Loyal by Leading
Retail Channels or Pet Superstore Chains, 2009-2015 (percent)
Table 4-5 Channel-Loyal Customer Base for Pet Products by Leading
Retail Channel or Pet Superstore Chain, 2009-2015 (number in thousands)
Pet Product Purchasing Rates by Channel
Table 4-6 Household Purchasing Overview for Pet Products by Retail Classification: U.S. Households Overall vs. Dog or Cat Owners, 2015 (number and percent)
Purchase Trends by Channel
Table 4-7a Purchasing Rates for Pet Products by Selected Retail Channels and Pet Superstore Chains, 2011-2015 (percent)
Table 4-7b Purchasing Base for Pet Products by Selected Retail Channels or Pet Superstore Chains, 2011-2015 (U.S. dog or
Walmart Draws Top Percentage of Pet Product Shoppers
Table 4-8 Channel Choices for Pet Product Shopping, Last Three\ Months: Pet Food, Pet Medications, Other Pet Supplies, 2015 vs.2016 (percent of pet product buyers)
Private Label Gains Overall
Table 4-9 IRI-Tracked Sales of Private Label Pet Products: Total and by Category and Segment, 2015 (in millions of dollars, units and pounds)
Table 4-10 Private-Label Share of IRI-Tracked Sales of Pet Products:
Total and by Food Category and Segment, 2014 vs. 2015 (percent)
National Brands Outpace Private Label
Table 4-11 IRI-Tracked Sales of Branded Pet Products: Total and by
Category and Segment, 2015 (in millions of dollars, units and pounds)
The Mass-Market
Walmart and Pets
Table 4-12 Walmart.com’s Top-Selling Pet SKUs
Target’s Bullseye Mascot Returns to Spotlight
Pet Specialty Chains
PetSmart and Petco’s Sales Close in on $12 Billion
Table 4-13 PetSmart and Petco Sales and Number of Stores,2001-2015 (aggregated, in units and millions of dollars)
The Strategy of Exclusivity
Small Format Stores Designed with Millennials in Mind
Other Pet Specialty Players
Selling at Supermarkets
Wholesale Clubs
Drugstores/Convenience Stores
Online Sales
Table 4-14 Level of Agreement with Statement: “I am buying pet products online more than I used to,” 2011-2016 (percent)
Table 4-15 Time Frame for Most Recent Online Purchase of Pet Products, 2012-2016 (percent of pet owners)
Other Retail Markets
The Pet Professionals
Natural Supermarkets
Dollar Stores
Agricultural/Feed-Seed Stores
Home Improvement Stores and Hardware Stores
Luxury Retailers
Food Co-ops
Chapter 5 Highlights
Chapter 5: Pet Ownership Trends
Pet Ownership at Almost 56% of U.S. Households
Table 5-1 Household Penetration Rates for Selected Dog- or Cat- Owning Classifications, 2010-2015 (percent of U.S. households)
Table 5-2 Household Populations for Selected Dog- or Cat-Owning Classifications, 2010-2015 (thousands of U.S. households)
Table 5-3 Household Penetration Rates for Selected Pet-Owning Classifications, 2011-2015 (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, 2009-2015(percent of U.S. households)
Multiple Pet Ownership Trends
32% of Pet Households Keep Multiple Types
Table 5-5 Multiple Pet Ownership by Animal Type, 2010 vs. 2015(percent of pet-owning households)
Table 5-6 Ownership of Multiple Pets of a Single Type, 2011 vs. 2015(percent of U.S. households who own a given type of pet)
Boomers and Millennials
Table 5-7 Household Penetration Rates for Selected Pet-Owning Classifications: By Generational Cohort, 2015 (percent of U.S. households)
Table 5-8 Household Populations for Selected Pet-Owning Classifications: By Generational Cohort, 2015 (number of U.S. households in thousands)
Table 5-9 Indexes for Selected Pet-Owning Classifications: By
Generational Cohort, 2015 (U.S. households)
Table 5-10 Indexes for Dog or Cat Ownership: By Age Cohort, 2011vs. 2015 (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,2009-2015 (percent)
Table 5-14 Share of Total Dog/Cat Owners by Household Composition,2009-2015 (percent) Dog vs. Cat Households
Table 5-15 Dog Ownership Rates by Household Composition,2009-2015 (percent)
Table 5-16 Share of Total Dog Owners by Household Composition,2009-2015 (percent)
Table 5-17 Cat Ownership Rates by Household Composition,2009-2015 (percent)
Table 5-18 Share of Total Cat Owners by Household Composition,2009-2015 (percent)
Pet Ownership Grows Among Minorities
Table 5-19 Change in Pet Market Consumer Base: White Non-Hispanics vs. Minorities, 2011 vs. 2015 (number and percent of U.S. dog- or cat-owning households)
Table 5-20 Dog and Cat Ownership Trends by Race/Ethnicity, 2009-2015 (percent and number of U.S. dog- or cat-owning households)
Table 5-21 Dog vs. Cat Ownership Trends by Race/Ethnicity, 2011 vs. 2015 (percent and number of U.S. dog- or cat-owning households)
Table 5-22 Demographic Snapshot of the U.S. Population, 2014
Table 5-23 Projected Population Growth of Hispanics, 2015-2060(in thousands)
Pet Owner Psychographics
Health and Medical Related Sentiments and Practices
Table 5-24 Selected Health & Medical Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2015 (percent and index)
Table 5-25 Selected Health & Medical Psychographics: Dog or Cat
Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2015 (percent and index)
“Green” Sentiments and Practices
Table 5-26 Selected Sustainability Related Psychographics: Dog Owners vs. Cat Owners vs. Other Pet Owners, 2015 (percent and index)
Table 5-27 Selected Sustainability Related Psychographics: Dog or Cat Owners Overall vs. Purchasers of Selected Superpremium Pet Brands, 2015 (percent and index)
Media, Marketing and Channel Related Sentiments and Practices
Table 5-28 Selected Media and Marketing Related Psychographics:Dog Owners vs. Cat Owners vs. Other Pet Owners, 2015 (percent and index)

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