COVID 19's Impact on Pet Health: A 'Fur Baby Boom' Driving Market Expansion and Innovation

The Expanding Pet Health and Wellness Market Driven by COVID-19 and the Fur Baby Boom

As public health concerns have risen since the onset of COVID-19, so too has the focus on pet wellness among American households. Many of these pet owners adopted their furry companions during periods of social isolation during the pandemic, leading to a heightened interest in mntning their pets' health.

This shift has created lucrative opportunities for investors looking into advancements like veterinary technology, pet supplements and premium food products, as well as pet insurance, which is significantly underserved in North America.

The commitment from younger generationsGen Z and Millennialswho are increasingly foregoing having children to adopt pets signifies a deepened investment in animal care. A study by Rover found that nearly 25 of these pet owners delayed or decided agnst having offspring due to their preference for pets.

This dedication results in higher sping on pet health services and products, with average annual growth estimated at 7.4 since 2019 compared to just 0.1 between 2016 and 2019. The number of dogs and cats in the US has grown by over 8, reaching more than 83 million dogs and nearly 60 million cats as of 2020.

However, this thriving pet health sector faces growing pns. For a decade, demand for veterinary services exceeded the supply due to slower growth in veterinarian numbers compared to the increasing demand for their services. This imbalance is expected to worsen with fewer veterinarians graduating and more exiting the profession over dissatisfaction with work hours and workload.

Despite these challenges, the industry has responded with increased productivity through telemedicine and other technological solutions. The market for pet technology products, valued at $20 billion by 2027 from just $5 billion in 2021, underscores rising interest among owners seeking wellness and preventive care tools like trackers, nutritional supplements, and DNA testing.

Pet owners are leveraging a variety of resources to make informed health decisions for their pets beyond traditional veterinary services. They seek tlored healthcare options that match their pet's specific needsover 75 of pet parents desire personalized care according to Kinship, an alliance of pro-pet businesses and experts.

Pet parents are increasingly choosing premium products based on quality, nutrition, and health benefits over pricea significant shift from previous consumer behavior. This tr has prompted brands and retlers to focus on high-quality ingredients and transparency in sourcing to build trust with pet owners.

Big-box retlers have expanded their ecosystems with comprehensive offerings including food, pharmacy, trning, and grooming services for pets to become one-stop destinations. Online retlers have entered the pharmacy space as an additional value proposition for customers.

Pet insurance presents a promising opportunity for expanding coverage rates in North America, where only 2.5 of pet households are currently insured compared to higher rates in Europe. To succeed, insurers must recognize that pet owners do not prioritize pet insurance similarly to health insurance. They need easy-to-understand value propositions such as personalized preventative health plans and interactive wellness tools.

The pet health industry stands poised for rapid growth fueled by the increase in new pet owners, rising per-pet sping levels, and evolving consumer preferences toward wellness-focused products. To succeed, brands must deliver on expectations of quality, transparency, and service to earn trust from today's more informed pet parents who are not willing to settle for less.

Customer First

Retl and Consumer Goods

Hunter Williams, Melissa Tischler, and Danny Zhang

Marsh McLennan is a global leader in risk, strategy, and people management serving clients with diverse businesses around the world.

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