Pet spending in America and abroad

Fifty-three percent of respondents to the AAHA 2004 Pet Owner Survey say they're spending more today on pet products and services than they did three years ago. (See Figure 1.) However, the overall increase in pet spending is less than in recent years.

Figure 1 : Spending habits

Pet spending in the United States is estimated to increase by 4 percent, to $35.9 billion, from 2004 to 2005, compared to a 6 percent increase from 2003 to 2004, and a 9 percent increase from 2002 to 2003, according to the American Pet Products Manufacturers Association.

Still, pet spending definitely isn't stagnant. Evidence: According to the Census Bureau's tracking of retail sales, Americans spent more money on pets than on hardware, jewelry, or candy in 2004. In fact, Americans are estimated to spend $8.6 billion on veterinary care alone in 2005, according to the APPMA's National Pet Owner Survey. (See Figure 2 for more estimates.)

Figure 2 : The 2005 forecast for pet spending

Pet spending around the world

One trend is clear: People all over the world are taking a greater interest in their pets as an integral part of the family. Here's a look at the international scene:

• In the United States, 63 percent of households have a pet, and owners spent $34.4 billion on pets in 2004 according to the APPMA. This translates to $91 per pet and $498 per pet-owning household.

• According to an Oct. 23, 2004, article in the International Herald Tribune, 30 percent of households in Japan own a pet. In 2004, the Japanese pet industry saw $9.3 billion in revenue.

• In Brazil, the pet supplies industry and accessories market is expected to grow 7 percent in 2005, according to Market Research: 2004 Global Pet Industry Business Opportunities, compiled by Dillon Media.

• The same study shows that Italy's pet industry was worth $2.9 billion in 2002 and experienced 70 percent growth from 1994 to 2004, more than double any other European Union country. The report also predicts 5 percent growth in the Italian pet industry from 2004 to 2005.

• Britain spent $740 million on pets in 2003, according to Mintel International, a London-based market research company. And the value of pet accessories and the pet-healthcare market in Britain increased by 20 percent from 1998 to 2003. Even though the APPMA records a 41 percent increase during the same period in the United States, British pet owners are more likely to buy pet insurance for their furry family members.

Less than 1 percent of U.S. pets were insured in 2002, compared to 14 percent of dogs and 5 percent of cats in Britain, according to Market Trends: The U.S. Market for Pet Insurance, compiled by Packaged Facts. And according to a November 2004 article in Pet Age, 25 percent of dog owners in Britain and almost 50 percent of pet owners in Sweden have pet insurance.

Quick fact

Will the United States see similar growth in the percentage of insured pets? According to the KPMG megastudy, "14 percent of pet owners are reasonable or good prospects for pet insurance." To date, more than 1,100 companies offer pet insurance through Veterinary Pet Insurance Co. as a voluntary group benefit, and the number of pet-insurance policies issued through employer benefit programs has increased by almost 400 percent since 2000, according to VPI.

Figure 3 : Pet owners are spending more on care