Pet Care in the United States and the Future of Premiumization

The United States is by far the most valuable market for pet care, eclipsing sales in other countries, and with activity here a harbinger of global trends. As with many other national markets, the pandemic and resulting home isolation actually supported growth. Consumers have felt comfortable in the companionship of pets, with the increase in pet ownership and the growing demand for high-end pet care, as an anthropomorphic expression of affection and fidelity. But the looming threat is macroeconomic – rapid increases in inflation and prices are obviously going to cause very real problems for trends that depend on relatively safe levels of consumer wealth and discretionary spending.

Source: Euromonitor International Passport Database

After the Pandemic: Dramatic Changes in Daily Life Boost Pet Ownership

Societal changes following the pandemic have tended to benefit the demand for pet care in the United States. Perhaps most important is the continued practice of regularly working from home, giving consumers confidence that they have the time and availability to care for a pet. This has been key in driving pet ownership and increasing dog and cat populations, directly benefiting demand for pet care products and pet food. Another obvious legacy is the acceleration of e-commerce, particularly important in pet care, and where the momentum and distributional change generated by online players such as Chewy is not expected to wane, but rather exerting continued influence on other retailers and solidifying the essential need for an online presence.

Are cracks starting to appear in the premiumization trend?

For years, the pet care industry in developed markets has been driven by the ever-evolving trend of premiumization – pet foods that contain healthy or exotic ingredients and persuade owners that they give their animals the products they deserve. This is especially true in the United States, due to a high standard of living, retail infrastructure, and highly developed consumer habits. A parallel trend towards premiumisation can be seen in the growth of higher priced, value driven products – perhaps illustrated by sustainability considerations, with increasing numbers of consumers willing to pay a premium for products that promise minimal environmental impact.

The supply chain disruption and rising raw material costs seen in early 2022 herald a threat to this long-standing trend. Costs have risen for common pet food ingredients such as chicken, for example, prompting many companies and retailers to externalize these costs by raising end prices. Supply chain disruptions have also led to companies struggling to keep products in stock.

Right now, premium brands are still expected to grow faster than economy and mid-priced brands, but brands in lower price points are clearly getting a boost as more consumers are forced to lower prices. due to drastic price increases. Further into 2022, this pressure is likely to intensify – the result could be a more back to basics approach in pet food, pet products and pet health care for many . Given the global scale of this problem and its immediate and direct impact on discretionary income, it is also likely to be an emerging trend in many other high-value markets, such as the UK United.

Comprehensive analysis and industry data is available in Euromonitor’s latest Pet Care in the USA report. For more information and data covering all major pet care markets across 52 research countries, click here.