Right now, the pet care industry needs to respond to the changing preferences of today’s pet owners in North America.
The era of easy growth—fueled by the boom in pet acquisition during the pandemic and by increased recognition of the health benefits of animal companions—appears to be over.
Nevertheless, there are many opportunities for innovation in pet services and products that better reflect the habits, lifestyles, and demographics of today’s pet owners.
The So What
“The pet parent of today is meaningfully different from their counterparts a decade ago: the relationship with their companion animals is more intense. These pet owners are more willing to spend money on their furry friends and ensure their lives are enriched,” says Brett Baptist, a BCG partner with deep pet sector expertise who specializes in retail and consumer services .
Projected growth by overall value and market size is muted and slowing.
- In the US, pet industry expenditure rose to an estimated $151 billion in 2024, a 2.5% increase from 2023, according to the American Pet Products Association.
- Dog population growth in North America is expected to stabilize at ~1% per year between 2023 and 2028.
But there are also areas that are projected to significantly outperform.
- The demand for high-quality and more premium pet food (often with human-grade, freeze-dried, and other nutrient-dense processes) is expected to continue growing in the high single digits until 2029 in North America, according to BCG analysis.
- Demand for supplements—which are increasingly used to help with joint mobility, allergies, or anxiety in pets—is forecast to grow by 10% each year for dogs, and 12% each year for cats until 2028. This trend is also driven by the increased life expectancy of pets.
“With 80% of pet owners in a recent BCG survey saying they consider their pets to be a vital member of their family, the most fruitful areas for growth will most likely reflect the next stage of the humanization of pets,” Baptist explains.
Other examples of the humanization of pets include:
- Concierge services and customized products, such as nannies, home care, and personalized nutrition.
- Pet food that is grain-free, vegan, or organic, as well as the use of labels to demonstrate ethical and sustainable sourcing.
- Medical treatments for pets that more closely mirror what is available in human medicine. Vet clinics, for example, are now promoting regular dental checks for dogs in the same way as people routinely visit the dentist.
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Now What
These are some of the growth areas for brands and investors to consider.
Ease of Living. Pet ownership should be as convenient and stress-free as possible, with easy access to important information for both pet owners and those who prefer a pet-free experience. For example, knowing whether restaurants have a doggy seating area or which vacations are pet friendly. And, with a growing number of younger pet owners and office workers, there are also opportunities for businesses to offer enriched daycare and boarding experiences. This could also include walking or sitting services, treadmills for dogs, and automated feeding systems.
Technological Advances. As with humans, there are many connected and wearable devices for pets aimed at improving wellbeing. Examples of available technology include GPS trackers, dog fitness trackers, or apps to monitor health, mood, or optimal nutrition. In tandem, some retailers are creating a larger online and omnichannel presence, developing websites and apps which incorporate advice, information, services, and products as part of a one-stop shop for happy and healthy pets. Medical diagnostics for pets are also advancing, with more interventions on offer such as the use of genomics to advise on preemptive action against possible medical conditions that may arise further down the line.
Luxury Offerings. Some of the best-known luxury firms are now offering pet fragrances, designer accessories, or wellness spas for four-legged guests. Other businesses are offering sophisticated styling services and exercise classes, or high-end dog crates that are also an attractive piece of furniture. One BCG survey estimates that about 40% to 50% of high-net worth individuals in the US, Western Europe, and China are pet owners. And with luxury often outgrowing other segments in industries such as footwear, accessories, and cars, there is an opportunity to move from premium offerings to luxury ones.
