KANSAS CITY, MO. — Pet industry sales in the United States exceeded $100 billion for the first time ever in 2020, despite and in some ways due to repercussions of the COVID-19 pandemic and consumer trends.
Total pet industry revenue totaled $103.6 billion in 2020, with pet food and treat sales leading the pack at $42 billion. This represents a strong 9.7% increase from 2019 for pet food and treat sales.
Veterinary care and product sales represented $31.4 billion in sales, up 7.2% from 2019, while sales of supplies, live animals and over the counter (OTC) medications totaled $22.1 billion, up 15.1%. The only category to experience a sales decline was other services including grooming, dog walking and boarding, which totaled $8.1 billion in sales, down 21.4% from 2019. This was attributed primarily to the impact of COVID-19.
“This past year presented a host of challenges that resulted in consumers across the country turning to their pets for comfort and companionship,” said Steve King, president and chief executive officer of the American Pet Products Association (APPA). “Interestingly, the product trends we are seeing 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.”
From a retail perspective, across-the-board sales increases for every channel were recorded, with e-commerce coming out on top. Total retail sales grew 6.7% from 2019, and APPA reported pet specialty and independent retailers “experienced solid growth” despite disruptions caused by the pandemic.
Additionally, 47% of pet owners said they have increased the number of times they purchased pet products online and 30% of pet owners said they spent more on pet supplies in 2020, compared to just 10% that reported they had spent less.
King and Celeste Powers, CAE and president of the Pet Industry Distributor Association (PIDA), announced this data on March 24 during Global Pet Expo Digital Access in their keynote presentation, “State of the Pet Industry.”
The pet industry experienced manufacturing challenges, including disrupted consumption patterns and increased demand, worker safety protocols, a shortage of employees and spot shortages in packaging, which put the market in limbo in the first half of 2020. However, sales growth numbers driven by consumer demand and the non-discretionary nature of some pet products allowed the industry to make a steep comeback in the latter half of the year.
Supply chain shortages and delays for imported pet products began in February 2020, King shared, Demand surged in May and has stayed in the double digits. Still today, ground transportation equipment shortages, a lack of available containers, container price hikes and jammed ports are causing supply chain issues for imports that are likely to continue in 2021 “and into the first part of 2022,” King said.
He also shared that fill rates, which have been significantly impacted by COVID-19, are not likely to improve in the short term.
Powers shared some challenges experienced by pet product distributors, saying virtual sales calls impacted the ability to establish strong relationships with new accounts and gain placement for new product lines. This burden trickled down to retailers, who experienced less foot traffic in 2020 due to community lockdowns and COVID-19 risks.
Regardless of these challenges, Powers declared distributor business was “strong and steady.” Both distributors and retailers adopted new ways to connect with each other, their industry partners and consumers to continue offering high-quality product in the marketplace.
“There’s a bullish outlook for this year and the next,” Powers said. “Growth is projected to be at 5.8% for this year, which is above the historical averages of 3% and 4%... Things are looking very positive in 2021.”
Pet food and treat sales are projected to grow 5% this year to $44.1 billion, with veterinary care and product sales growing an estimated 3% to $32.3 billion, supplies, live animals and OTC medications growing 6% to $23.4 billion in sales, and “other services” sales expected to grow 20% to $9.7 billion.
Pet ownership highlight
During the Global Pet Expo Digital Access presentation, King emphasized a key point for pet ownership, explaining the number of dog and cat adoptions actually decreased in 2020 by 27% compared to 2019. He went on to explain that the “empty animal shelter” phenomenon seen last year was largely due to shelters not acquiring the number of homeless animals they typically would, and that more people fostered dogs and cats in their newfound increased time spent at home.
“It's important to note the shelters and rescues really account for just about a third of dog acquisitions and about 35% of cat acquisitions,” King said. “Two-thirds of our dogs and cats come from other sources, and the most prominent being families and friends. For dogs, that's about 32% percent, and cats about 28%. Breeders and pet stores, of course, are other sources of supply, and then stray animals and animals that simply wander in make up the remaining amount.”
The American Veterinary Medical Association also reported a 50% increase in new pets per week from March to August last year, and Banfield animal hospitals also reported a steep increase in juvenile dog and cat acquisitions from 2019.
Read more of our Global Pet Expo coverage.
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