COVID Fur Babies Expands Pet Health, Wellness Market and Investment Opportunities – BRINK – Conversations and Insights on Global Business

0

Just as Americans have become more obsessed with their own health since the emergence of COVID-19, they’re also concerned about the health of their pets — many acquired during the lonely days of pandemic isolation.

For investors, this opens up new growth markets in areas such as technology solutions for veterinarians and pet owners, high-quality supplements and foods, and pet insurance, which remains very under-penetrated in North America.

A growing willingness to spend

One of the driving forces behind the increased attention to pet health has been dedicated Gen Z and Millennial owners, who have pushed back on having children and adopted pets in large number. A study by pet services company Rover found that nearly a quarter of Gen Z and Millennial pet parents in the United States have delayed having a child or have decided against it, in favor of a pet.

This degree of commitment leads directly to a willingness to spend to keep animals healthy and happy. According to Morgan Stanley, spending per pet has increased – with projections for it to rise to $1,292 in 2025 from $980 in 2020.

Spending on pet healthcare alone has grown at an average annual rate of 7.4% since 2019 as the pet population has grown, up from just 0.1% between 2016 and 2019 . According the American Veterinary Medical Associationthere are over 83 million dogs and over 60 million cats in the United States, with each category increasing by more than 8% between 2016 and 2020.

Vets can’t keep up

But the booming pet health economy is also experiencing growing pains. For more than a decade, for example, there has been an imbalance between supply and demand, with the growth in the number of veterinarians being slower than the growth in demand for veterinary services. This deficit is expected to worsen in the future. Since 2021, the number of vets has grown even more slowly as fewer vets graduate and more vets leave the profession due to dissatisfaction with hours and workload.

Veterinary service revenues, on the other hand, are growing faster than the number of clinics, pets, and veterinary employees, indicating higher spending per animal and higher utilization. We expect revenue per animal to increase by 10% between 2021 and 2025, compared to 8% between 2016 and 2020.

Filling the gaps with technology

Just as in human health, where demand exceeds supply, efforts have been made to close the gap in pet care by increasing productivity through telemedicine and other high technology. Sales in the pet technology market are expected to reach $20 billion in 2027, from $5 billion in 2021.

This reflects pet owners’ growing interest in wellness and preventative care solutions, such as tracers, nutritional supplements and DNA testing. A 2020 Oliver Wyman Investigation pet owners forand that 56% had purchased special technology solely for the welfare of their animal.

Pet parents are increasingly choosing more expensive options with characteristics that reflect their own health choices.

This makes sense, given that more and more pet owners are looking for ways to proactively manage their pet’s health at home. Today, pet owners rely on multiple resources to make informed decisions about their pet’s health and don’t just turn to veterinarians. They increasingly create their own personalized approaches to their pet’s health, frequently visit websites that promote animal welfare, and leverage information from trusted people or businesses that regularly serve their pets. company, such as pet food retailers.

This creates space for industry players to adopt tools and approaches aimed at building pet parent confidence. Kinship, a New York-based coalition of businesses and pet experts, reports that more than 75% of pet parents indicate a desire for health care tailored to their pet’s specific needs.

Only the best for fur babies

Oliver Wyman’s survey also identified product quality and its contribution to health and nutrition as the most important factors in purchasing decisions for everyday items like food, long before the price. Pet parents are increasingly choosing more expensive options with characteristics that reflect their own health choices. To meet this trend, brands and retailers must continue to focus on products that offer clear health, nutrition and functionality benefits and appeal to pet owners, as recent growth shows. the supply of fresh food.

Going one step further, pet food providers can personalize the experience for pet owners, creating life-stage or breed-specific offerings or even formulas personally designed for you. a particular pet. Such customization and a focus on quality ingredients will be key to earning the trust of pet owners.

To cultivate closer relationships with pet parents, big-box retailers have developed end-to-end ecosystems that provide a range of goods and services from food and pharmaceuticals to training and grooming. Online retailers, in particular, have been scrambling to increase uptake by entering the drugstore space.

pet insurance

With this group of health-focused pet parents, there is also an opportunity for pet health insurance providers to expand their market in North America. Currently, only 2.5% of US households with pets have pet insurance. This is well below coverage in Europe.

To be successful, insurance companies need to recognize that most pet owners do not place the purchase of a policy for their fur baby on the same level as their own insurance. This means that pet owners should easily perceive the benefits, otherwise they won’t care. By providing value-added services, such as personalized preventative health plans and interactive wellness tools, insurers may be able to build stronger relationships with pet owners.

The pet health industry is poised for rapid growth thanks to booming pet ownership, rising spending per pet and changing consumer preferences in health and well-being. But pet-related brands must deliver the level of quality and transparency expected of today’s more cynical and far more informed pet owners who aren’t willing to buy anything for their babies. .

Mia Filippini, associate of Oliver Wyman, contributed research and ideas for this article.

Share.

Comments are closed.