Pets are loyal companions and increasingly thought of as part of the family. They’re also big business. Let’s look at some notable trends.
Pet Ownership Is Growing
Today, roughly 70% of U.S. households have pets, up from 56% in 1988, according to the American Pet Products Association (APPA). In fact, more households have pets than have children.
84.9 million households have pets
32.8 million U.S. households have children
Sources: APPA 2021-2022 National Pet Owners Survey; Bureau of Labor Statistics, April 2022
What’s driving the growth in pet ownership? The two most populous generations in the United States—baby boomers and millennials—are bringing pets into their homes in greater numbers.
"The two biggest generations are bringing pets into their homes in greater numbers."
Baby boomers, until recently the largest generation in history, have entered a new phase of life and are becoming pet owners in greater numbers. Among baby boomers globally, at least 32% own pets.
Millennials, who are now the nation's largest generation, have also embraced pet ownership. Many millennials are becoming pet owners before, or even instead of, having children. Today, 32% of millennials own pets domestically, and the APPA reports that 62% of millennials and 52% of Gen Z have increased their pet care spending since 2020.
More and More, Owners Are Caring for Pets Like Family
Over the years, pet owners have dramatically changed the way they think about and care for their pets. For many pet owners, their animals have become part of the family. They want their pets’ lives to be as happy, healthy and fulfilling as their own, and they’ll likely spare little expense to ensure it. As a result, they’re spending billions of dollars on premium-quality foods, state-of-the-art health care, insurance policies, luxury services and more. With this attitude, pet care has evolved to offer more sophisticated products and services that are being driven by three main factors:
We’re humanizing our pets. Pet owners often think of their pets as they would their children. They talk to their pets, bring them along on vacation, modify homes to accommodate them and celebrate pets’ birthdays. Today, pets are true members of the family.
We’re “premiumizing” pet care. Pet owners are building an appetite for premium and even luxury pet products. Higher-quality pet food is becoming more common. In the U.S., $50 billion was spent on food and treats in 2021, and a 2022 global study found that 79% of pet owners check pet food labels for ingredients they dislike. Owners are also indulging pets with nonessentials, like toys and costumes—the global market for pet accessories is projected to reach over $42 billion by 2026.
We’re providing pets with health care comparable to our own. Advances in veterinary health care are providing meaningful improvement in our pets’ lives. There are ongoing innovations in veterinary treatments, preventative medications, diagnostic and screening tools, imaging (MRIs and other scans), and wellness products and therapies. Owners are willing to pay for these treatments. It's estimated that pet owners will spend more than $34 billion a year on vet care and product sales in 2021. In addition, pet owners are also buying health insurance policies. In North America, private health insurance was purchased for more than 4.41 million animals in 2021, exceeding $2.83 billion in premiums.
"Pet care has evolved to offer more sophisticated products and services."
79% of pet owners check ingredients on food labels
28% of pet owners spend money on their pets for social media content
45% of pet owners would take on debt to cover an emergency expense
$594 average annual cost for an accident and illness insurance policy for dogs
78% of pet owners consider their pet to be a best friend or family member
Sources: Beneo, January 2022; LendingTree, 2021; NerdWallet, 2021; Quotient, 2021; Naphia, May 2022
The Pet Care Industry Is Thriving
The pet care industry spans veterinary pharmaceuticals, diagnostics, product distributors and services, manufacturers of pet food and pet supplies, and pet supply retailers. Each of these subindustries is responding to the demands of pet owners with continued innovation that’s led to notable growth.
Here in the United States, the pet care industry has grown steadily every year since 2001, even during the Great Recession. Meanwhile, a similar boom has been building internationally. The global pet care industry is expected to grow from $232 billion in 2020 to as much as $350 billion by 2027.
Global pet care industry sales
2020: $232 BILLION
2027: $350 BILLION (Estimated)
These trends may not continue or may reverse. Source: Global Market Insights, February 2021.
Corporate interest is intensifying, too. The pet care industry is undergoing a wave of research and innovation, and there are a number of companies—both large and small—poised to benefit from both the proliferation of pet ownership and advances in the ways we care for our pets.
PAWZ ProShares Pet Care ETF
PAWZ is the first ETF focused on the pet care industry. PAWZ gives investors the opportunity to gain broad exposure to public companies in the global pet care industry—companies that stand to potentially benefit from the proliferation of pet ownership and the emerging trends affecting how we care for our pets.
Sources: ProShares; APPA, 2021-2022 National Pet Owners Survey; Bureau of Labor Statistics data, April 2022; U.S. Bureau of Economic Analysis, Federal Reserve Bank of St. Louis; Beneo Global Pet Food Survey, January 2022; Quotient Survey July 2021; LendingTree, September 2021; NerdWallet, October 2021; Global Industry Analysts, Inc., May 2021; Global Market Insights, February 2021.
Investing involves risk, including the possible loss of principal. This ProShares ETF is non-diversified and entails certain risks, including imperfect benchmark correlation and market price variance, that may decrease performance. Investments in smaller companies typically exhibit higher volatility. Smaller company stocks also may trade at greater spreads or lower trading volumes, and may be less liquid than stocks of larger companies. Please see the summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will achieve its investment objective.
The fund is subject to the risks faced by companies in the pet care industry. Although the pet care industry has historically seen steady growth and has been resilient to economic downturns, these trends may not continue or may reverse.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses. Read them carefully before investing.
The “FactSet Pet Care Index” and “FactSet” are trademarks of FactSet Research Systems Inc. and have been licensed for use by ProShares. ProShares have not been passed on by these entities or their affiliates as to their legality or suitability. ProShares based on the FactSet Pet Care Index are not sponsored, endorsed, sold, or promoted by FactSet Research Systems Inc., and it makes no representation regarding the advisability of investing in ProShares. THIS ENTITY AND ITS AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES. FactSet Research Systems Inc. does not guarantee the accuracy and/or the completeness of the FactSet Pet Care Index or any data included therein, and FactSet Research Systems Inc. shall have no liability for any errors, omissions, or interruptions therein.