Consumer spending going to the dogs

What recession? Overall spending in the pet industry was at an all-time high in 2011, surpassing $50 billion, according to the American Pet Products Association (APPA). Roughly 62 percent of U.S. households own a pet, which equates to 72.9 million homes, according to a 2011-2012 APPA National Pet Owners Survey.

“As the total pet population continues to grow, despite a slower pace, we still see the overall industry expanding year after year,” said Bob Vetere, APPA President. “As pet owners continue to pamper pets and treat them like members of the family, we see positive growth and a response to consumer demand for more products and services which we expect to see through 2012.”

With aging boomers and single households forming the demographic majority in North America, family pets have never had it so good. Pets lucky enough to find themselves living in the lap of boomer luxury are the sole focus of their owners daily routine and the object of their affection.

The latest annual pet industry report shows spending grew 5.3 percent to $50.96 billion in 2011. The association projects a steady 3.8 percent growth rate through 2012, predicting close to $53 billion in overall pet spending.

Helping fuel the growth, the pet marketplace continues to attract a stream of entrepreneurs and investors introducing new, innovative products.

More than $4 billion to be spent on pet services
Pet services experienced the largest growth last year rising 7.9 percent over 2010. As pet owners continue to pamper pets, their spending on services like grooming, boarding, pet hotels, pet-sitting, and doggie day care was $3.79 billion. Of all the categories, pet services is expected to see the largest growth at 8.4 percent – an estimated $4.11 billion in spending.

Supplies and OTC medications had significant growth in 2011 with $11.77 billion spent in this category. Up 7.6 percent from 2010, the increased use of OTC medications as an alternative to veterinary care continues to rise.

Pet food spending on the rise
Demonstrating a slower but steady increase in 2011 was the food category. Food spending is estimated to rise by 3.1 percent in 2012. Pet sales and adoptions are flattening, according to APPA’s National Pet Owners Survey and others, meaning the total money spent is spread over virtually the same number of animals.

“On the flip side, the service category continues to flourish and is expected to do so in 2012 as well,” said Vetere. “We are seeing a boom in this category as people continue to work and require services such as pet sitting, boarding and walking to care for their pets at home.”

Pet insurance is also expected to increase in 2012. Included in veterinary care figures, pet insurance is estimated at $450 million and projected to grow to more than $500 million in 2012.

Pet spending reality check 
As any pet owner knows, it’s really the animal that has us well trained, particularly the daily routine of feeding, walks, playtime and bedtime.

And while pets provide us with comforting companionship, it’s important to prioritize your spending. As with our human relationships, the best memories aren’t about designer duds or gourmet dinners, it’s about the time you spend together – going on walks, hanging out, and just enjoying each other’s company.

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