Americans will spend more than $70 billion on their pets in 2018, according to the American Pet Products Association. Globally, pet care is a $100 billion industry and growing.
"The pet industry is booming," writes JJ Kinahan, chief strategist at TD Ameritrade, in an email. We spend as much on our pets' care as we do on our own – or on our kids.
Pets are taking on the role of children for many Americans, says Patrick Watson, senior editor at Mauldin Economics. This is particularly true for millennials, who are delaying marriage and having fewer kids. As pet owners increasingly humanize their pets, "they're more willing to spend money on things like premium pet care and food products," Kinahan says.
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Pet owners aren't going to stop spending on their pets just because money is tight. They don't view these costs as "discretionary spending," and "are willing to give up other expenses to cater to their pets," says Jodi Burrows, vice president of SDR Ventures, which has provided advisory and private capital formation services to the pet industry.
"This translates to an industry that will continue to do well even if the economy weakens," Watson says. The industry isn't immune to market pullbacks, but downturns will be less severe and shorter lived than for other industries, he says.
Investors large and small recognize this. Between 2012 and 2016, venture capitalists invested nearly $500 million in pet technology alone, according to CB Insights. This influx of venture capital shows "there's continued innovation and interest from large and small players alike in pet care," says Ben Jacobs, head of ventures for global pet industry leader Mars Petcare. Mars recently launched the first pet care-oriented venture capital firm, aptly named Companion Fund.