Profits have never been cuter – Is the rise of the pet industry truly sustainable?
Many readers will have gained a cat or dog in the last two years – in fact 3.2 million pets have been purchased in Britain since March 2020. In a country of 67 million people, there are now 17 million pet owning homes and around 34 million pets. The increase has been most pronounced among younger households.
This has led to commensurate growth in the UK pet industry. The question remains whether this rise is sustainable?
A spike in growth
This significant surge in pet purchases has led to significant growth across the entire pet industry. This includes the sale of pets themselves, pet food, pet toys and other accessories as well as pet related services, such as vets and grooming.
The most common pets are dogs and cats, as might be expected, but indoor birds, rodents and rabbits as well as cold blooded pets are also popular.
In 2017, annual spending on pets plateaued. However, there has been huge growth since then, with the industry expanding from approximately £7.8 billion in 2019 to £9.7 billion in 2021.
What is driving this growth?
The main driver appears to be a desire for companionship, which was likely borne out of the lockdown of 2020 and beyond when people were forced to spend time at home alone.
The growth seems to largely have come from younger people, with 59% of new pet owners under the age of 35. It is commonly argued that the younger generation are less likely to have children and are replacing them with pets, but this does not appear to be the case. The majority (56%) of new pet owners also have children in the home.
In addition to an increase in pet purchases, there has also been a change in the nature of the industry. Previously, pet products were largely utilitarian and intended to be as cheap as possible. Most households would not generally spend significant amounts of money on their pets. However, the market is shifting towards more expensive, luxury products and a greater variety as people have begun increasing their spending on their pets.
Luxury products costing more money are therefore taking off. An example of this is "Pretty Litter" - a brand of cat litter intended to change colour based on the health of your cat. This allows cat owners to notice changes in health and take greater care of the animal.
The range of products is also growing. There are new product categories emerging continuously. One example is pet wet wipes. These are a relatively new product, but Amazon has almost 300 brands of pet wet wipes available and searches for them have increased by 44% in the past 5 years. Pet toothpastes are also growing in popularity. Previously, pet owners would throw their animal a chew of some kind for their teeth, but it seems a desire to directly care for their pets' teeth through brushing is becoming increasingly common.
There is innovation within more traditional pet food industries too. For example, the pet food market has exploded with a variety of raw dog food, pet supplements and even pet ice cream gaining in popularity.
Is it sustainable?
With some analysts projecting a 4.5% average growth in the period of 2022-2027, it appears that the growth is likely to continue but at a reduced pace. Given that a significant factor in the last two years of growth was the COVID-19 lockdowns, it is not surprising that things are likely to start tapering down.
There were concerns that new pet owners might not keep their new pets once the world "re-opened", which could hinder market growth. However, these concerns have proved to be largely unfounded. Only 5% of new pet owners have given up their pets and 74% of new pet owners said the new pet had helped their mental health. Therefore, it seems that pet ownership is likely to remain popular.
That said, given the present cost of living crisis and high inflation, it is unclear whether this industry is likely to continue growing. Will families prioritise spending on their animals when many will be struggling to pay for energy and other necessities? This remains to be seen.
But is it environmentally sustainable?
Governments are increasingly regulating human activities that they consider to negatively affect the environment. Therefore, it is possible that pet ownership and the industry in general will eventually be subject to greater regulation in order to meet environmental targets.
Some commentators predict that owning a dog produces more carbon than driving a family car. This is because, as with human food, production of animal food produces carbon emissions and it is often packaged in plastics, which cannot be easily recycled.
Owning pets can also have significant, negative ecological effects. For example, some shampoos, sprays and flea treatments can damage local wildlife and insect populations. In addition, domestic outdoor cats are estimated to kill over 100 million mammals and birds a year in the UK, and between 7.5 and 26.3 billion in the US. A truly staggering figure. This has led to calls in the US to regulate cat ownership and, in particular, to ban or localise the practice of cats being let out of the house. In the UK, it is extremely common for cats to roam the streets, yet, in the US, the majority of cats are housebound.
Will an increasingly environmentally conscious but animal loving generation continue to own domestic animals at such a high level given these effects? With the predicted increases in the pet industry over the next 5 years, it is unlikely that these concerns will have any significant effect in the short term. Indeed, given the average lifespans of domestic cats and dogs it is unlikely that any reduction will be seen for at least 7-15 years. With any luck, someone will have thought of some environmentally friendly solutions to pet ownership in that time.
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