The US: looking back at 2020 and ahead to 2021
In the early stages of the pandemic, some forecasted a large decline in the US pet industry. Fortunately, as the numbers begin to shape up for the year, it looks like the forecast is brighter.
Recession-resistant
2020 was a year unlike any other, changing the way we all worked and lived. The pet industry has long been described as ‘recession-proof’, and when compared to other industries devastated by this pandemic, it has ultimately fared well.
Taking a closer look at the impact of COVID-19 on the pet care community, a more accurate description may be ‘recession-resistant’, as some businesses and sectors of the pet industry have been negatively impacted while others have thrived. One thing remains certain – pets have played a significant role in people’s overall well-being during these challenging times.
US numbers
In 2019, the APPA Industry Spending Study reported US pet industry spending at $95 billion (€77.5 billion), with pet food sales taking the lion’s share of the market. Projections for 2020 estimated a more modest 3.5% growth, again with pet food and services experiencing the highest growth. The actual figures will be released in early 2021, but the pandemic’s impact has certainly altered APPA’s original estimates across various categories within the US market.
Pet food
Pet parents are prioritising their pets’ diets like never before. According to the most recent APPA COVID-19 Pulse Study of pet ownership during the pandemic, over half of pet owners consider themselves to be very brand loyal when shopping for food, and 68% agree their pet’s diet is very important to them. So they do not plan to make any changes – regardless of their financial circumstances.
Veterinary care and product sales
With an increase in pet acquisition in 2020, the US veterinary industry has experienced a surge. As people spend more time with their pets, owners are more attuned to their health needs. Research from the Human Animal Bond Research Institute shows that when owners understand that their pets’ health may be intrinsically linked to their own, it can encourage them to bring their pets to the vet for regular check-ups.
Other services
Some decline is anticipated for non-veterinary services, such as boarding, day care and dog walking. With more people working from home and travelling less, there is a reduced need for these services.
Supplies and OTC medicine
With more pets in the marketplace, sales are tending to increase across all industry segments, including supplies and over-the-counter medicine.
A notable trend in 2020 was the narrowing of the gap between brick-and-mortar and e-commerce sales, with many pet owners shopping online out of safety precautions. Brick and mortar is still the preferred shopping method overall at nearly 60%, but e-commerce is growing. A few key online-only retailers like Chewy.com and Amazon are contributing to this trend as they are marketing heavily to pet owners, focusing on convenience, big selection, competitive prices and fast shipping options. These retailers are not the only option for consumers, however, as major outlets like Petco, PetSmart and Walmart are increasing their online presence as well.
Looking ahead
Results from the latest APPA COVID-19 Pulse Study show that, for now, pet ownership has not been negatively impacted, and that the approach to routine pet care will largely remain unchanged for pet owners in the US.
Still, with many in the industry calling this a successful year for the pet products market, the potential effects of a larger economic setback remain to be seen, especially if more households become financially challenged and unemployment remains high.
While some categories of spending may be affected more than others, APPA expects that vet care and product sales, as well as pet food and supplies, will increase from 2019, and the industry will be on track to meet or exceed the overall projected figure of $99 billion (€80.8 billion) spent on pets in 2020.