By Rachael Green, Benzinga
Pet ownership is on the rise in the United States, with an estimated five million more pets today than there were before the pandemic. But this isnt just a pandemic boom thats doomed to fade. The number of homes with pets has been trending upward for decades. As the number of pets grows, so, too, does the demand for supplies and services to care for them. According to Morgan Stanley, the pet services industry is set to grow at a compound annual growth rate (CAGR) of 8% over 2022-2030, reaching a projected total of $277 billion. Here are some of the key trends to watch in the booming pet services industry.
More Pets And More Spending On Those Pets Is Creating A Surge In Demand
Morgan Stanley pegs that 8% CAGR not just to the rise in the number of pets but to the rise in how much owners are willing to spend on them. The annual spend per pet is expected to increase from $980 million in 2020 to $1.9 billion in 2030 as owners take pet health and wellness more and more seriously.
In addition to the increased spending, that piece of the household budget is becoming increasingly inelastic. Nearly half of pet owners in a recent Ally Consumer Research survey said they would cut spending on themselves or take on debt before cutting their pet budget.
That increased pet spend isnt just going to higher quality food or dog sweaters. Its going toward more frequent visits to the vet, increased spending on prescription medications, pet insurance premiums and a more proactive routine of preventative and surgical care for pets.
These trends have sparked a wave of new companies entering the space or expanding their reach. In April, PetMed Express (NASDAQ: PETS) acquired PetCareRX for $36 million in a bid to add new health and wellness verticals to its business. The online pet pharmacy will now add PetCareRXs marketplace of pet wellness supplements and nutritious food to its portfolio.
In September, Walmart (NYSE: WMRT) opened its very first pet services center, providing both veterinary care and grooming services to Walmart customers. The Dallas, Georgia location is Walmarts pilot initiative, but the company says it plans to expand it to other locations in the future.
In August, Wag! Group Co. (NASDAQ: PET) expanded its online platform for comparing and buying pet insurance, finding dog walkers or sitters, and getting one-on-one training into Canada as the company eyes global expansion.
That same month, the vet services segment saw its first publicly traded company enter the market with the closing of Inspire Veterinary Partners Inc.s (NASDAQ: IVP) $6.4 million IPO. The owner and operator of vet hospitals is strategically building a nationwide network of hospitals and clinics, with 13 locations across nine states so far. The fast-growing company plans to acquire 10 locations per year while also expanding into related services like emergency care, pet boarding, lab testing, and more.
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