Why it matters:
- The American Pet Products Association projects that sales of pet care will grow at an above-average pace — 5.8% in 2021 versus 3% to 4%, historically.
- The humanization of pet care means that owners are increasingly considering the holistic wellness of their pets, prompting companies to provide preventative care solutions.
- Online purchasing of pet care products increased sharply in 2020, and is expected to repeat those gains.
Sales of pet products reached a significant growth milestone last year amid the pandemic, as consumers adopted new pets at a record pace and invested heavily in their health and well-being.
The boom has created new opportunities for companies that offer preventative and health-maintenance solutions, as consumers increasingly view their pets as family and are sparing no expense to care for them.
“2020 was a year of profound impact and change, and the pet industry experienced its share of both,” said Steve King, president and CEO of the American Pet Products Association (APPA), noting that the industry reached $100 billion in sales for the first time last year.
The APPA projects sales of pet care will grow 5.8% in 2021, compared with the historical average of 3% to 4%, as people adopted pets in record numbers during the COVID-19 pandemic.
The APPA’s biennial National Pet Owners Survey found that pet ownership increased from an estimated 67% of U.S. households that own a pet to an estimated 70% during the pandemic. Among both pet owners and non-pet owners surveyed, 14% said they had obtained a new pet during the pandemic, and at least one in four of those new pet owners said the crisis influenced their pet acquisitions, King said.
“Pet owners demonstrated an unshakeable commitment to the pets in their lives, with premiumization and humanization trends continuing to drive pet owner behavior,” he said.
For example, he noted that 51% of pet owners said they were willing to pay more for ethically sourced pet products and eco-friendly pet products.
“Dog owners, in particular, continue to invest in the premiumization trend,” said King, noting that the percentage of dog owners purchasing premium dog food increased from 37% in 2018 to 41% in 2020.
Increasingly, pet owners have sought to provide more holistic and preventative levels of care akin to the way humans have sought to manage their own health.
“From kombucha to kimchi, we are seeing a major surge in consumer interest around products for people that promote health and wellness from the inside out, and this holds true for pet parents, as well,” said Greg Kean, vice president of innovation and product development at WellPet, which offers a variety of natural pet foods and treats under multiple brands that seek to support pets’ digestive health, among other benefits.
“As society gradually returns to normal and pet parents return to routines, the tailwinds that our industry has seen will also bring about new opportunities, such as a greater emphasis on mealtime being an even more important bonding moment for pet parents and their pets, as well as treating, and the emotional and functional benefits it delivers,” he said.
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Pet owners demonstrated an unshakeable commitment to the pets in their lives, with premiumization and humanization trends continuing to drive pet owner behavior.
Steve King, president and CEO of the American Pet Products Association
Relieving anxiety with pet CBD
Nik Topolovec, founder and CEO of Kitsie, a newly launched supplier of CBD-infused oils, balms and dog treats, agreed that pet owners are increasingly investing in preventative care for their furry family members.
“Pet owners are looking more and more at ongoing wellness — trying to prevent things from going wrong,” he said, citing the rapid growth of pet physiotherapy centers as an example.
He said that while the pandemic resulted in a large increase in pet ownership, many of those pets have grown accustomed to being home with new owners, and they stand to suffer separation anxiety as their full-time human caretakers resume their pre-pandemic routines and spend more time away from home.
That’s how Topolovec became interested in pet CBD as a treatment for anxiety for his own dog, also named Kitsie (and designated as the chief inspiration officer for the company that shares his name).
In addition to treating anxiety, pet owners also use pet CBD to treat chronic pain, inflammation and joint stiffness and soreness, much as humans use CBD, which is derived from the hemp plant and which became widely available via the 2018 Farm Bill.
Although the Food and Drug Administration has not authorized CBD for use in any pet products and has in fact cracked down on certain pet CBD marketers, more and more states are allowing veterinarians to discuss CBD as a treatment for pet ailments.
Topolovec said the National Animal Supplements Council has “helped define the market” for CBD pet products, and that he himself has researched the area thoroughly and aims to be a thought leader in the emerging space.
Treating pets as children
Daniel Rotman, founder and CEO of PrettyLitter, which makes a lightweight, highly absorbent cat litter that changes color to indicate potential health problems detected in cats’ urine, said pet owners increasingly see their pets as part of their families.
“We’re seeing a trend in dog and cat owners giving their pets the same kind of experience they would give their children,” he said.
This is reflected in both food items, which are increasingly promoted with human-style claims such as “natural” and “gluten-free,” and in the investments consumers make to protect the health of their pets.
Increasingly, those investments are for preventative care, such as the disease-detection offered by PrettyLitter, said Rotman. It is particularly important in the case of cats, he said, because their innate stoicism often limits them from expressing discomfort.
The trend toward the humanization of pets has attracted an increased level of investment in pet care brands, Rotman said, driving more research and development on the part of suppliers and improvements in areas such as product packaging.
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Pet adoption coincides with e-commerce gains and partnerships with Target, Martha Stewart
The increase in pet adoptions during 2020 also coincided with a sharp rise in e-commerce activity on the part of consumers, which played right into the hands of PrettyLitter, Rotman said, based on the company’s direct-to-consumer subscription model.
King of the APPA noted that online pet care shopping increased significantly in 2020, with 86% of the association’s survey respondents saying they had shopped for pet products online last year, compared with 72% in the prior year.
“Before the pandemic, 60% of pet owners usually purchased pet products in person at brick-and-mortar stores,” said King. “During the pandemic, in-person shopping dropped to 41%, aligning more closely with the 46% of pet owners who prefer to purchase online with purchases shipped to their home.”
He said many pet owners expect that their online shopping, including both delivery and online ordering with curbside pickup from brick-and-mortar stores, will continue.
Learning about new products by browsing online also gained ground during the pandemic, King pointed out. While consumers had previously reported that in-store browsing had been the number one way they became aware of new pet products, the latest survey showed that surfing online was nearly at parity with in-store browsing last year.
The growth of e-commerce in 2020 didn’t stop PrettyLitter from making its first-ever launch in retail stores, however, through an agreement with Target, where Rotman said PrettyLitter has become one of the retailer’s best-performing cat litter SKUs. While PrettyLitter had long resisted retail distribution, Rotman said the awareness that the brand built online and through word-of-mouth helped create enough familiarity to support the Target rollout.
PrettyLitter also launched its first celebrity partnership, a promotional engagement with Martha Stewart, who also happens to be a fan of the brand, Rotman said.
Now PrettyLitter is focused on leveraging its database of customers accumulated through its online sales to explore other related product opportunities, he said.
Kean of WellPet agreed that pet owners have become more interested in maintaining their pets’ wellness before they get sick with products that promote good digestive health, for example.
Pets’ healthy digestive tracts support their immune systems, impact overall well-being and also support protection from toxins and allergens, Kean said, citing the company’s Wellness CORE Digestive Health line of recipes that are crafted with digestive enzymes, prebiotic fibers and probiotics.
In addition to products promoting digestive health, WellPet also offers WHIMZEES natural dental treats for dogs, which are designed to provide a reward, entertainment and tooth-cleaning functionality.
“More than ever, consumers want to see exactly what ingredients are being used and what benefits each element can have for his or her pet,” he said.
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