Reaching a Historic Milestone in Pet Industry Sales
APPA reports that the national pet industry exceeds over $100 billion in sales for the first time in industry history.
Despite the pandemic (or perhaps partly because of it?), the pet industry hit a historic milestone. In March, the American Pet Products Association (APPA) announced the industry had reached over $100 billion in annual sales, the highest level in industry history. The milestone was released in APPA’s 2020 State of the Industry Report.
“We have reached a critical milestone, generating $103.6 billion in sales,” said Steve King, president, and CEO of APPA. “We are bullish for the coming year, projecting growth of 5.8% – well above the historical average of 3 to 4%. This past year presented a host of challenges that resulted in consumers across the country turning to their pets for comfort and companionship. Interestingly, the product trends we see in the pet care community mirror those of consumers – a desire for a healthier lifestyle, increased focus on fitness, turning to supplements for improved well-being, and technology playing a larger role in everyday life.”
“Delighted, but not surprised.”
APPA had previously estimated 2020 spending at $99 billion, a 3.5% increase over 2019. When the final numbers came in at $103.6 billion and 6.7% growth over the prior year, “we were delighted but not surprised,” said King. “The trends we had been tracking all year of increased pet acquisitions and spending during the pandemic were confirmed when we looked at the cumulative numbers at the end of the year.”
Many of the same growth drivers the industry experienced during the pandemic will still be at play post-pandemic, leading APPA to project better-than-average growth in 2021. “Millions of new pets acquired in 2020 will need to be fed and will require veterinary care and products to maintain their health and comfort throughout their lives,” said King. “We anticipate many people will continue to work from home, at least part of the time, which means spending more time with their pets, which also drives sales.”
Trends from the report included:
- $22.1 billion was spent on supplies, live animals, and OTC meds, a 15.1% increase from 2019.
- $42 billion was spent on pet food and treats a 9.7% increase.
- $31.4 billion was spent on vet care and product sales, a 7.2% increase.
- While $8.1 billion was spent on other services such as grooming, dog walking, and boarding, this was a 21.4% decline from the previous year. As quarantines are lifted, and consumers venture out, the use of these services is expected to rise.
From a retail perspective, every channel showed an increase, especially e-commerce, which is consistent with consumer shopping trends overall:
- Total retail sales increased by 6.7% from 2019 to 2020.
- 47% of pet owners reported they increased the number of times they purchased online.
- Pet specialty and independent retailers experienced solid growth.
- 30% of pet owners spent more on their pet/pet supplies in the past year, with only 10% saying they spent less.
Premiumization/humanization was a sales growth driver pre-pandemic that only accelerated last year, and “we feel that trend will continue,” King said. “Growth in the need for veterinary care will continue due to the increased pet population, plus we know people are more attuned to the health of their pets when they spend more time with them. We also anticipate a big jump in non-veterinary services such as boarding, daycare, and grooming as people begin traveling again and return to their offices.”
For more information about APPA and its annual State of the Industry Report, visit americanpetproducts.org/press_industrytrends.asp.