Transforming Pet Care: The Impact of Pets Being Part of the Family
As the old saying goes, “our pets are our family.” Research by the American Veterinary Medical Association found that 85 percent of dog-owners and 76 percent of cat-owners think of their pets as family. This increasing amount of people viewing pets as family, coupled with the general rise in pet ownership, has simultaneously driven demand for better pet services. Additionally, there are 65.1 million U.S. households that own a dog (51% of households) and 46.5 million households with a cat (37% of households), many of which do not have any kids. That is more households with a dog than kids and the number of households with cats is not too far behind it. While the COVID-19 pandemic was a great accelerant of this trend, it was also driven predominately by millennials and Gen Z (~50% of pet owners and ~43% of the population).
This piece dives into five pet ownership trends, mostly involving the explosion of healthcare offerings for pets.
The 5 takeaways:
💰Part of the family = $$$$ spent
🥗Better for you / clean label
🏥Veterinary care
💊Medicine
🧾Insurance
- Part of the family = $$$$ spent
Of all the trends in the space, the biggest driver is more money being spent on pets. With more money being spent on pets, that opens up a large wallet share for startups to innovate. Being treated like part of the family means spending like any other member of the family. In 2022, Americans spent $136.8 billion on their pets, which is up nearly 11% from 2021. The large categories that funds get spent on are food, veterinary care, toys, and grooming. The average dog owner will spend $912 per year, and the average cat owner will spend $653 per year. The door remains wide open for new or better products and services that cater to the evolving needs and preferences of this dynamic sector.
2. Better for you / clean label
In the food space generally, a prevalent trend has been the better for you movement and the clean label movement. Both movements emphasize improving the healthiness of everyday foods, adding protein, and using minimally processed ingredients. This trend has not only been applied to human food, but also to animal food. Most pet food is visually unappealing, heavily processed, and made with poor quality ingredients. Startups have focused on two methods: improving the dry food by adding freeze-dried food, like Spot & Tango, or producing fresh food like Ollie, Farmer’s Dog, and Smalls (for cats). These startups are capitalizing on the poor products produced by large enterprises.
3. Veterinary care
The next three trends are all directly part of the healthcare market. If pets are seen as part of the family, people want their pets to live as long as possible. And that means ensuring proper healthcare. Dog owners are spending on average $367 on vet care a year and cat owners are spending on average $253 per year. Like the human side, animal healthcare is an area that has been under innovated and somewhat neglected.
However, investment has been flooding into the veterinary space. Startups like Small Door Veterinary, Bond Vet, Modern Animal, and more are creating physical vet locations to service their clients. They are layering on software, easily accessible information, simple booking, and strong communication to win over customers. Additionally, they are providing a more holistic service to help improve lifespan.
4. Medicine
Staying with the healthcare theme, pharmaceuticals are another area seeing demand for further innovation. The graph below illustrates the challenge very succinctly. At one time human medicine and animal medicine were similar, but in more recent years we’ve seen a divergence: human approvals skyrocketed while animal approvals plummeted.
With all the innovation in the human drug space, startups and large enterprises see the opportunity to help pets. Many of the technologies that can be used on humans, like mRNA vaccines, could also have potential use on animals. Torigen is treating animal cancer with an individualized vaccine based on their immune systems. PetDx enables veterinarians to detect cancer in dogs by drawing blood. As part of the family, access to pharmaceuticals is crucial.
5. Pet Insurance
With the continual improvements in animal healthcare, one gap that had existed in the market was pet insurance. Like any insurance, pet insurance is important because it provides financial protection against unexpected veterinary bills, which is a major cost for pet owners. As part of being a member of the family, it enables pet owners to make decisions based on the best interest of their pets’ health rather than solely on financial considerations. Startups and large enterprises have noticed and began creating products in the space. Pawlicy Advisor is a marketplace to compare pet insurance featuring large insurers, such as MetLife, and startups, like Spot Pet Insurance. The growing popularity of pet insurance underscores its significance in bridging the gap in animal healthcare, offering an opportunity for startups and established companies alike to capture the growing demand and enter the market.
Overall, as pets become more and more part of the family, there is a great opportunity for startups and large enterprises alike to innovate in the space and offer products to cater to the growing wallet share available. The average dog owner will spend $912 per year and the average cat owner will spend $653 per year, there is a lot of opportunity here. On the food side, just like consumers want cleaner label food and better for you food for themselves, they want that for their pets. On the healthcare side, demand for improved care has led to innovation in pharmaceuticals, insurance, and veterinary care. This trend is only at the beginning; as consumers continue to spend in this space, I expect more innovation will follow.
