NEW YORK — Younger generations are now becoming the target audience for the overall pet industry, with Millennials and Gen Zers set to dominate pet ownership throughout the United States. According to the American Pet Products Association’s (APPA) 2023-2024 National Pet Owners Survey, for the first time the number of Gen Z and Millennial pet owners now equals the number of Gen X and Baby Boomer pet owners.
Pet ownership among Gen Z and Millennials has risen steadily from 2018 to 2022. Sixteen percent of Gen Zers reported owning a pet in 2022, an increase of 5% from 2018, and 33% of Millennials owned a pet in 2022, an increase of 2% from 2018. Combined, Gen Zers and Millennials make up nearly half (49%) of all US pet parents, whereas 25% are Gen Xers, 24% are Baby Boomers and 2% belong to the oldest generation — Builders.
Despite this, younger generations are actually spending less on their furry companions compared to older pet owners, according to recent research from MarketWatch. MarketWatch’s Guides Team analyzed pet industry spending data from the US Bureau of Labor Statistics’ (BLS) 2021 Consumer Expenditure Survey.
Overall pet spending
Overall, pet parents have ramped up their spending habits over the past years. In fact, US pet industry sales topped $136.8 billion in 2022, according to APPA’s 2022 State of the Industry report, an increase of 10.8% from the previous year. Additionally, Bloomberg Intelligence estimates that the US pet market will achieve $195.6 billion in sales by 2030.
According to MarketWatch’s analysis, on average, annual pet spending throughout the United States increased 67% from $460 in 2013 to $770 in 2021. MarketWatch attributed this constant increase in pet spending to various factors, including the shift in pet humanization.
“Culturally, the dogs are out of the doghouse,” Daniel Caughill, founder of pet advice site The Dog Tale, said in MarketWatch’s report. “Once regarded as merely a pet, dogs and cats are now recognized as a member of the family, with their own beds, insurance policies and ugly Christmas sweaters. People form a deep and meaningful bond with their pets, and as culture is more accepting of these bonds, people are spending more.”
Over the past 10 years, the amount US pet parents spent on their pets increased nearly 54% from $631 in 2011 to $969 in 2021, according to MarketWatch. Despite this, the amount of income pet owners dedicated to their pets also spiked in 2017, with people spending an average of 0.97% of their total income. This rate has dropped to 0.88% in 2021, as detailed by MarketWatch.
Though Millennials and Gen Zers are beginning to dominate the pet space, they are spending less compared to their older counterparts. On average, Gen X pet parents spend the most on their pets annually at $949, followed by Baby Boomers who spend $842, then Millennials at $679, the Silent Generation (or Builders) at $495, and Gen Zers spending the least at $369.
Baby Boomers and the Silent Generation also dedicate more of their income toward their pets, spending about 1.07% and 1.18% of their income on pet products, respectively. Gen Xers spend 0.81% of their income on their pets, and Millennials spend the least amount of their income (0.74%) on their pets. Despite the fact that Gen Zers spend the lowest annual average on their pets, this generation dedicates more of their income toward their pets compared to Millennials at 0.83%.
These generational differences are likely due to the higher net worth accumulated by older generations, whereas younger generations, like Gen Zers, are just now beginning to obtain a steady income.
“Boomers and members of the Silent Generation are more likely to have a larger net worth and a smaller, fixed retirement income,” Caughill said. “So, smaller pet expenses could represent a higher percentage of their income. Millennials are at a point in their life when they may have more income but more overall debt and liabilities, such as school debt and childcare expenses.”
Additionally, MarketWatch found that Baby Boomers spent nearly 20% more on their pets than on themselves, spending about $842 on pet products versus $703 on personal care products. On the other hand, Millennials spent more on themselves than on their pets, spending an average of $777 on personal care products versus $679 on pet products.
As well as analyzing generational differences in pet spending, MarketWatch also studied gender differences in pet spending, sharing that women are willing to spend more on their furry companions compared to men. Single women are reported to spend significantly more on their pets at an average of $575 per year (about 1.47% of their income) compared to men, who spent $367 per year (about 0.75% of their income).
MarketWatch also analyzed regional differences in pet spending. Inhabitants of the Western United States spend the most on their pets at an annual average of $1,046, followed by those in the Northeast who spend $803 annually. Those living in the Midwest spend about $691 annually, and those in the South spend the least at $636 annually.
Comparing the amount spent to average income, MarketWatch found that pet owners living in the Western US spend the most of their income on their pets at 1.10%. Those in the Midwest dedicate 0.82% of their income to their pets, and those in the Northeast and South dedicate the smallest amount of their income (0.80%) toward their pets.
The impact of inflation
Inflation is hitting consumers — including pet parents — hard throughout the United States, and the globe. The price of pet food products have risen an average of 14.4% since March 2022, according to the BLS’ Consumer Price Index report.
According to MarketWatch, data demonstrates that this inflation is hurting younger generations’ pet spending habits more than those of the older generations. Pet parents have experienced an overall 11.6% increase on pet product spending from 2020 to 2021, with the amount of income being spent on pets increasing from 0.82% in 2020 to 0.88% in 2021.
As inflation rose, older pet owners in the Silent Generation and Gen Xers spent more of their income on pet products while Millennials and Gen Zers decreased their spending habits. Millennial pet parents decreased the amount of their income spent on pet products by 2.3%, and Gen Zers decreased theirs by 13.2%.
“Inflation’s impact on pet spending among younger individuals could be due to their lower financial stability compared to older generations, making them more sensitive to price fluctuations in pet care items and services,” Kyle Binder, founder of the dog grooming blog PetLovers, said in MarketWatch’s report. “Millennials may be more likely to cut back on pet expenses during times of economic uncertainty.”
With inflation set to continue, and a potential recession looming, younger generations may continue to decrease their spending habits, whereas pet parents in older generations may witness little impact on their pet purchasing habits.
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