If you’re not investing in the pet economy in America, you’re missing out, as this sector is hot and only going to get hotter in the next few years.
Morgan Stanley projects that the U.S. pet economy will grow from $110 billlion to $275 billion by 2030. My organization Animal Policy Group has a front row seat to this growing sector, representing many of the major players and veterinary schools, and I think Morgan Stanley might have underestimated what’s happening.
Pets aren’t a fad, and millennials and Gen Zers are now the largest bloc of pet owners in America. They not only buy pet food and supplies at a record pace, but millennials want pet health care delivered at a scale and quality matching human health care (and they’ll pay for it, to boot). COVID-19 alone led to an increase that’s estimated between 11-23 percent of U.S. households acquiring a pet, pushing total households with pets to 70 percent and demand continues to surge. It’s not just because kitties and puppies are cute (mine certainly are); it’s due to a scientific fact: Engagement with pets leads to an increase of oxytocin in our brain and a decrease in cortisol. Why does that matter? Oxytocin is a source of relaxation and happiness, and cortisol accelerates stress and anxiety. Pet owners have experienced this, even if they didn’t know that something “medical” was happening.
If you’re still a skeptic, ask yourself why TV commercials feature a dog or cat regardless of the product or message. Car companies run ads showing a dog smiling in the passenger seat along a California coastal highway and don’t mention a thing about the vehicle.
Research for Nationwide Pet Insurance by Kerry O’Hara, PhD, established that employees value a company and their boss much more if the company is pet-friendly, and this includes employees who don’t own a dog. Hotel groups like Kimpton now offer “non-pet floors” just so folks who can’t or don’t want to be near pets have some space. Who could have predicted this 20 years ago when pets were forbidden inside of a hotel?
There are a myriad of aspects you can invest in, if you want to participate in the pet economy: health care, pharmaceuticals, telemedicine, nutrition/food, supplies, accessories, services like boarding and daycare, and more. Private equity firms investing in veterinary practices have scaled from less than 10 five years ago to over 60 now. My phone rings weekly from new investors interested in where to launch in the pet space. A sideshow just 20 years ago, pets are now center stage and we’re just getting started.
Mark Cushing is the founder and CEO of Animal Policy Group and author of Pet Nation: The Inside Story of How Companion Animals Are Transforming Our Homes, Economy and Culture.