Is the pet industry recession-proof?

[Zlantann]

Over the past months, the world has been ravaged by inflation and people are losing their purchasing power due to the high cost of goods and services. So many sectors of the economy are in a deep recession that has resulted in business failure. The pet sector is also suffering from inflation. In June 2022, pet food inflation in the U.S. reached 10.3%, Canadian had 8.1% and Europe has 8.8%.

But when it is expected that during an economic crisis, people would pull back on spending on their pets, it turned out the opposite. According to research by Edge by Ascential, the pet industry is forecasted to reach $281 billion by 2023. Many economists believe that the pest industry is recession-proof. In the past two recessionary dips of 2001 and 2008, pet spending actually grew unabated each year by 7 percent and 5 percent respectively. Moreover, it has followed a steady trajectory of growth over the past 30 years.  It's rare to find a sector that offers both growth and defensiveness in recessions like the pet industry.

Reasons for the growth of the pet industry

Pets are now part of the family: There are now around 108 million dogs in the United States– roughly one dog to every three humans. In the U.S., 70% of all households now own a pet (an increase from 56% in 1988), which means there are now more households with pets than children. The bond between pet owners and animals is getting closer. Everyone is treating their pets like children.  

Thirty years ago, dogs couldn’t come into the house, then they were allowed in the bed, and soon they will have their own room. With pets increasingly viewed as members of the family (even often taking the place of children as millennials wait longer to get married and have kids), spending on pet-care has consistently grown.

Animal protection laws: Countries now have written laws that protect pets against maltreatment and suffering. These laws are really enforced in developed countries and not in Africa where pests are exploited. Hence pet parents must ensure that these animals are not maltreated. Therefore, expenses on their medical, feeding, housing, etc are a very important part of the family’s expenses. Sometimes the government subsidizes pet products just like other basic needs.

Generation Z loves pets: It is now fashionable for the younger generation to own pets. The millennial generation already makes up 32% of pet industry consumers as they see their pets in a whole new light compared to their parent's generation. Millennials are now three times more likely to be pet owners than they are to be parents. Investors, founders, and analysts in the pet industry stated that while other sectors are suffering, the sector is bullish about its ability to withstand the worst. Part of this is because pet owners love their pets a lot. A recent study by Consumer Affairs surveyed 1,000 pet owners and found that 57 percent of participants aged 27 and 42 love their furry friends more than their siblings. The study also found that millennials’ romantic partners come second to a pet for 30 percent of participants.

In the UK, 3.2 million new homes adopted pets. People under 35 accounted for 59% of new pet owners, while 56% of those buying a pet for the first time had children at home. In the U.S, the numbers are equally staggering.  With the current trend of humanization among Generation Z, pest owners are not tightening their purse strings when it comes to everyday staples like good quality nutrition.
  
Covid-19 Pandemic: Stay-at-home orders created a perfect environment for pet ownership. Long hours spent in the office that once discouraged potential parents from adopting were replaced by the possibility of being present while working remotely. For the first time, half of the people employed pre-COVID-19 have been working from home, trading long commutes for quarantined conference calls, clearing social calendars, and yearning for emotional connection, which for many, has been filled by their pets. Consequently, animal adoption rates skyrocketed more than 110 percent, and fostering grew 197 percent comparatively year-over-year, according to Pethealth Inc. For existing pet parents, the stay-at-home rules offered a chance to spend more meaningful time and invest more deeply in their pets. The pandemic has made people become used to pets.
  

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[paxmao]

-Givign away your pet is one of the last things people do, but there is nothing really recession proof on that regard. The supplies will be more basic, non-brand items... there will be less buys and much less spending in superficial or optional things. The medicines and food staples tend to be the go-to items when trying to shell from a recession - these are classic defensive assests.

[mk4]

Re: Is the pet industry recession-proof?

Just to answer this question, I don't think it is — but the level of negative effects will generally depend on what specific pet-related business. If worse comes worse in terms of the economy, I'm going to guess that dog(or pet) food businesses will be hit the hardest simply because a lot of people wouldn't be able to afford it, and the likes of dogs and cats will likely be fed with leftovers instead.

^This is just a on-the-top-of-my-head take though.

[jackg]

I'm going to guess that dog(or pet) food businesses will be hit the hardest simply because a lot of people wouldn't be able to afford it, and the likes of dogs and cats will likely be fed with leftovers instead.

Most domestic animals can live well of human scraps (dogs, cats and birds especially).

Most dogs can tolerate even simpler diets of things like chicken, rice and vegetables and aren't that demanding  nutrition wise (most animals can synthesise a lot of vitamins in a way humans can't).


There were a lot more people adopting pets because they were working from home over the pandemic as you've said and I think that's the biggest surge that's been seen. People do tend to buy a lot more from stores now too, I think most pet ownership has been widespread for centuries in the UK and probably a lot of Europe but the difference is the trend that they'll buy things from stores for them (but there are limits to this - dogs can use human things and might need to - like repurposing an old duvet into a bed).

Gen Z buy a lot of human toys for their pets too instead of buying things intended for dogs as they might be better quality or more widespread (to be bough in places like supermarkets or department stores while looking for other things).

[cabron]

Dog owners who hit the rock bottom just abandon dogs on the streets since they couldn't feed them anymore. Its wrong but so many reports of increasing abandoned dogs everywhere.

My kid has a dog.  The dog is the only alarm system we have. He barks whenever unknown person come near the house. To me he's a valauble alarm system. Owners should also look at their dogs this way to see its importance as part of their security and family.

Not sure where I've read it but studies shows feeding the dog once a day will extend his life longer than feeding the dog every meal.

[mk4]

Dog owners who hit the rock bottom just abandon dogs on the streets since they couldn't feed them anymore. Its wrong but so many reports of increasing abandoned dogs everywhere.

I'm guessing that this spike up was due to the covid years. People were probably bored and wanted a pet for funsies, totally underestimating the amount of effort needed to care for a dog.

[Z-tight]

I don't feel the pet-industry is recession-proof, but it is the love of pets in a country and amongst its people that strengthens their pet industry, because people there buy pets and take care of them no matter what the condition is; there are other places of the world that the pet-industry is at its lowest, not that it was ever high, dogs for example can share mans' food and leftovers, but there are places people don't have enough to eat, let alone leftovers to share with their pet, in those places there has never be a boom in their pet industry, but it will be at its lowest now because of global inflation, and as a result many people abandon their pets or even kill then, and they can only possible do this because the love of pets isn't so high in that region.

[Zlantann]

I don't feel the pet-industry is recession-proof, but it is the love of pets in a country and amongst its people that strengthens their pet industry, because people there buy pets and take care of them no matter what the condition is; there are other places of the world that the pet-industry is at its lowest, not that it was ever high, dogs for example can share mans' food and leftovers, but there are places people don't have enough to eat, let alone leftovers to share with their pet, in those places there has never be a boom in their pet industry, but it will be at its lowest now because of global inflation, and as a result many people abandon their pets or even kill then, and they can only possible do this because the love of pets isn't so high in that region.

In some developing countries, dogs and cats are good meat. They are reared for meat and stray dogs or cats are captured and slaughtered. African culture doesn't support keeping animals as pets. Most dogs are reared for hunting or for guiding flocks. This part of the world has some of the best-hunting dogs, that can kill rabbits and bring the meat to the owner without several bites.

Some pet animals in some of these nations' homes are underfed and mal-treated. Where the majority of households are struggling to survive, how would pets have good lives? Also, there are no animal care or protection laws in most emerging countries. Pets are treated based on the owner's discretion. You would always see owners kicking, hitting, flogging, or starving pet animals.  

[hugeblack]

This is the strangest piece of information I read today, I did not have a pet, but the look of many of my friends for pets made me believe that such an industry will develop because it has become just like luxury yachts and gold watches as some tend to buy them all the time.

I remember that someone bought a massager for his cat, so if there were catastrophes, wars or ongoing economic crises, I do not expect this industry to continue to grow because sooner or later and when people have to reduce consumption, the pet will not be a top priority.

Do you have any statistics on developing and poor countries?

[el kaka22]

I am not sure about the recession-proof thing, but I know that it is a big enough industry that if you gain a good chunk of it, you will always be rich. Pet stores are not digitally huge just yet, I can easily say that people still do use stores a lot, and that is one thing that could be improving a lot. A future when one company grows so huge that they deal with ALL needs of a pet owner could literally be the next huge industry.

The main reason it hasn't reached there is the fact that it is a growing industry and as the article says Z generation is a bit different, but someone will eventually do it, and it is going to change the industry and then it will definitely be recession-proof when it is digital as much as it can be.

[Hydrogen]

Its been claimed that the life or death nature of healthcare allows for the industry to demand much higher payments in contrast to any other industry.

Perhaps this trend naturally extends to the pet industry for identical reasons.

Can't comment much on the finance, business and economics side of things. Except to mention that I remember the pet food industry being linked to slavery in asia years back. A good chunk of pet food comes from the fishing industry. Of which the fishing industry in asia is known to use slave labor on fishing boats. While most may not realize it, it is possible a high percentage of the goods and products they purchase and use on a daily basis carry links to sweatshops and slavery in foreign nations.

While these circumstances may be sad and unfortunate. They might also serve as a buffer zone on the labor side, which prevents pet food from reaching unaffordable levels. I don't even know what to think about that.

[Jatiluhung]

The increasing interest of people to have pets at home continues to increase during the Covid-19 Pandemic. because people have to stay at home. and they need entertainment or animals to treat their boredom. or it can be said that they need activities that can be done at home. and came the hobby of pet animals.

in the country where I work today (indonesia), I see the citizens are even more interested in collecting ornamental plants that they buy expensively. even to the point that there is one plant whose price is very expensive, such as an ornamental plant called Monstera. This plant was auctioned for around $8000 dollars.
Monstera

But I see an increase in the pet industry sector and the ornamental plant industry only in the midst of the covid-19 pandemic because people really need it at that time.

but now when inflation starts to get worse in various countries. I actually see that the pet business opportunity will be heavily affected by inflation and will be prone to recession. because nowadays people from the middle to lower economic circles will be much more concerned with their own needs than their pets. they will prefer to stock up on food rather than having to buy a pet.

but in the UK, I believe there is still a high level of interest in the pet industry because in that country, pets are even considered as family and friends. But I read in the news that the cost of funerals for animals is increasing rapidly in the UK as a result of inflation itself.

[Smack That Ace]

My kid has a dog.  The dog is the only alarm system we have. He barks whenever unknown person come near the house. To me he's a valauble alarm system. Owners should also look at their dogs this way to see its importance as part of their security and family.

I have 2 dogs, honestly dogs are the friendliest animals to us humans, I love them for their loyal nature and very helpful in our life as you describe.
I consider them as family members, dogs are friendly friends. and yet so many countries in Asia raise them and butcher them, it's horrible.

Not sure where I've read it but studies shows feeding the dog once a day will extend his life longer than feeding the dog every meal.

I've never heard of it but it's not convincing. Animal bodies, like us humans, need enough energy to function in a day. one meal a day is too little for any animal (I won't mention reptiles like snakes...). For me, what we eat, the dogs will eat the same.

[wxa7115]

Re: Is the pet industry recession-proof?

Just to answer this question, I don't think it is — but the level of negative effects will generally depend on what specific pet-related business. If worse comes worse in terms of the economy, I'm going to guess that dog(or pet) food businesses will be hit the hardest simply because a lot of people wouldn't be able to afford it, and the likes of dogs and cats will likely be fed with leftovers instead.

^This is just a on-the-top-of-my-head take though.

This is probably the most likely scenario, when people are hit with misfortune and they suffer losses which affect their standards of living they sell the stuff they know it has value, but probably one of the last things they ever think about getting rid off are their pets.

However as you say there is nothing that is truly recession-proof, it is just that is going to take a more intense crisis before people begin to think about whether they can afford their pets or not, and once they notice the amount of money they are spending on their pets they are bound to reduce costs.

[Kakmakr]

I think when it comes to pets, people react the same than how they might be reacting to Alcohol taxes.    It seems to me ...no matter how expensive alcohol become, people still find the money somewhere to pay for it.

People will cut back on other expenses to pay for alcohol and food for their pets. The pets stimulate "pleasure" hormones with people...and alcohol does the same... so why would people spend less on something that gives them pleasure?

We need those things that gives us pleasure.... when everything around us falls to pieces... right?

[BRINIRHA]

I am a person who likes to raise animals. and what I feel in the current state of the economy I don't mind raising animals. The animal I keep is a cat. Their treatment does cost a hefty amount of money. but because this is a hobby and pleasure then spending money for pleasure is commonplace. But when the impact of inflation is increasingly felt. I also prefer not to buy food for my cat. better feed them what we eat. thus becoming more cost effective. but if we talk about recession then all industries will definitely be affected including the pet industry. because sometimes we are forced to reduce our hobby of pets a little when the economy is like now.

[Taskford]

Dog owners who hit the rock bottom just abandon dogs on the streets since they couldn't feed them anymore. Its wrong but so many reports of increasing abandoned dogs everywhere.

I'm guessing that this spike up was due to the covid years. People were probably bored and wanted a pet for funsies, totally underestimating the amount of effort needed to care for a dog.

Having a pet is somehow a trend right now many celebrities posted their pets that's why other wants to follow and also they see a lot of cute pets posted that's why some want to have this without knowing there's huge responsibilities in it. Pet industry is not recession proof we all see that the dollar value rise up and it affects the price of all commodities and also with other things including pet cares so for having this issues we can also see the price hike of pet cares and that's what happening at this moment.

[tbterryboy]

I am a person who likes to raise animals. and what I feel in the current state of the economy I don't mind raising animals. The animal I keep is a cat. Their treatment does cost a hefty amount of money. but because this is a hobby and pleasure then spending money for pleasure is commonplace. But when the impact of inflation is increasingly felt. I also prefer not to buy food for my cat. better feed them what we eat. thus becoming more cost effective. but if we talk about recession then all industries will definitely be affected including the pet industry. because sometimes we are forced to reduce our hobby of pets a little when the economy is like now.

No, you didn't reduce your hobby, you still have your pets with you and you can adopt more because you said you can still be able to feed them with the food that you also consume and not foods that are specifically built for cats. We sometimes do that actually. We have one cat and two dogs. Sometimes we bought them dog food and cat food if we have an extra budget but most of the times they just eat regular food.

If the pets are sick and need some medication then that is a different story anymore. I think we normal individuals can't do much to help our pets but they need a special treatment of the experts or veterinarians and this cost some dollars.

[Wapfika]

Dog owners who hit the rock bottom just abandon dogs on the streets since they couldn't feed them anymore. Its wrong but so many reports of increasing abandoned dogs everywhere.

My kid has a dog.  The dog is the only alarm system we have. He barks whenever unknown person come near the house. To me he's a valauble alarm system. Owners should also look at their dogs this way to see its importance as part of their security and family.

Not sure where I've read it but studies shows feeding the dog once a day will extend his life longer than feeding the dog every meal.

We added more dogs this year, they can be consider a stress reliever their loyalty and sweetness makes us care for them more,they are not just a guard dog or our alarm clock but considered as family. We even bring them in vet for checkups even our dog who is not a pure breed. Many will do give their needs once they know how special thei dog is even if there is recession. During pandemic lockdown they are a good companion hopefully those who buy or adopt dog during pandemic will not abandoned their furbabies and will provide what they need. Be a responsible owner and be inspired in some celebrity dogs now in tiktok that gives viewer good vibes.

[Ryu_Ar1]

The increasing interest of people to have pets at home continues to increase during the Covid-19 Pandemic. because people have to stay at home. and they need entertainment or animals to treat their boredom. or it can be said that they need activities that can be done at home. and came the hobby of pet animals.

in the country where I work today (indonesia), I see the citizens are even more interested in collecting ornamental plants that they buy expensively. even to the point that there is one plant whose price is very expensive, such as an ornamental plant called Monstera. This plant was auctioned for around $8000 dollars.
Monstera

But I see an increase in the pet industry sector and the ornamental plant industry only in the midst of the covid-19 pandemic because people really need it at that time.

but now when inflation starts to get worse in various countries. I actually see that the pet business opportunity will be heavily affected by inflation and will be prone to recession. because nowadays people from the middle to lower economic circles will be much more concerned with their own needs than their pets. they will prefer to stock up on food rather than having to buy a pet.

but in the UK, I believe there is still a high level of interest in the pet industry because in that country, pets are even considered as family and friends. But I read in the news that the cost of funerals for animals is increasing rapidly in the UK as a result of inflation itself.

This is the same thing that happens in the area I live in, now maybe even almost every house in my area has this plant to maintain and cultivate.
Maybe this is related to a hobby and obviously this is actually quite profitable because the more they are popular, the higher the price when they are traded.
In the case of animals, maybe this is just for entertainment, but when the economy is getting more and more difficult, this will also definitely be a little burdensome because pets obviously need quite a bit of care starting from food and a place for them to be stored, in contrast to ornamental plants which only allow a little for maintenance costs because it only requires fertilizer and water to water regularly.