Global pet economy to grow to $500 billion in revenue by 2030 finds new Bloomberg Intelligence study

The global pet industry will expand by more than 45% over the next six years, surpassing $500 billion by 2030, according to a new report from Bloomberg Intelligence (BI). The surge will be driven by increasing pet ownership, particularly in emerging markets like China, robust sales in pet food, strong growth of health and welfare therapies, and the humanisation of pets.

BI expects the global pet food industry to expand nearly 7% this year and then about 5% annually to reach $146 billion by 2030. Food is the biggest ownership expense and limited elasticity allows suppliers to pass along higher costs.

In addition, the pet pharmaceuticals industry could expand to over $24 billion by 2030, from about $16 billion now, driven by favourable demographics, consumer spending and — most important — development of novel therapeutics. Pain, oncology and cardiology can spur innovation and the emergence of blockbuster products as companies continue to bridge findings from human health to pets.

The humanization of animal companions should also boost the industry. Brands including Gucci, H&M and Tommy Hilfiger have launched pet clothing lines to tap into the trend, notes BI, while the US pet Halloween costume market is estimated at $700 million, according to the National Retail Federation. More than three-fourths of the US pet apparel market is dominated by private label, data from Circana show.

Diana Rosero-Pena, Lead Consumer Analyst at Bloomberg Intelligence, highlights the significance of these findings: "The pet economy is experiencing unprecedented growth, fuelled by the humanisation of pets and rising disposable incomes. Companies like Mars and J.M. Smucker are leading the charge in the pet food sector, ensuring consistent growth despite broader economic challenges. The resilience of this sector underscores its potential as a major economic driver over the next decade."

The report outlines several key factors contributing to this growth, including:

• E-Commerce Strength to Continue: Investments from US digital native Chewy and, to a lesser degree, Amazon may help e-commerce grow as much as 87% to $58.4 billion by 2030. Free shipping can breed customer loyalty and expand e-tailers’ baskets.
• China Growth to Top GDP: China's industry can expand at a compound annual rate easily eclipsing that of GDP. The country’s cat and dog population may exceed 156 million by 2030.
• Supplies, Services Highly Elastic: Sales gains for supplies, equipment and services could remain slower than in other categories as they are the most at risk during economic downturns and high inflation. Greater investment in loyalty programs and other pockets of growth can aid customer stickiness.

Andrew Galler, Lead Analyst for Global Health Care at Bloomberg Intelligence, adds: "Innovations in pet healthcare are pivotal to the market's expansion. The development of new therapies and advanced diagnostic tools will not only enhance the quality of care but also drive significant economic value. As pets live longer, the demand for sophisticated healthcare solutions will continue to rise."

Limited new pet ownership and high elasticity during economic downturns would weigh on the supplies and equipment category. BI’s analysis finds that the global segment may grow 36% to $65.8 billion through 2030 (vs. 45% for food), with the US accounting for 44%, followed by Europe at 31%. Though the category is typically a smaller part of pet revenue for retailers than consumables, accounting for about 30%, it is more profitable.

Overall, the US will remain the biggest market and Europe may account for about a third of the market, though other regions may expand more quickly. BI’s scenario finds that China’s market could grow more than 50% to $49 billion, with Alibaba dominating e-commerce. Investments from US pure plays like Chewy could push e-tail up 87% to account for nearly 30% of the pet economy.

To receive a copy of this comprehensive report, please contact BloombergIntelligence@citigatedewerogerson.com.