The Number Of Households With Pets Has Unexpectedly Declined

Yesterday at Global Pet Expo, the American Pet Products Association (APPA) released a summary of its annual study on pet ownership. It said the percent of households with pets declined from 70% in 2021 to 66% in 2022, going from 90.5 million households in 2021 to 89.6 million in 2022.

It’s shocking because the data is contrary to longstanding trends in pet ownership and the explosion of pets in daily life.

It’s also contrary to spending trends. In face of declining households owning pets, the dollars spent on pets in 2022 were up 10.8% over 2021. According to APPA, pet industry spending, $136.8 billion in 2022, is now bigger than domestic home building ($124 billion), domestic airlines ($127 billion) and beauty and personal care ($91 billion).

The humanization of pets, treating pets like children or human companions, is still driving spending. James Straggas is CEO of K9Wear which makes doggie apparel for major brand names so consumers can outfit their pets with the same brands that people wear. Tommy Bahama, Badgley Mischka and Natori are some of the brands K9Wear produces for.

Michelle Dulake of Fera Pet Organics told me pets “need us and rely on us,” but added, “how far we are going with humanizing them is just getting wild.”

It’s not just spending on products where consumers are parting with money. Investors given the opportunity through Wefunder to invest in startup Bow Wow Labs snapped it up immediately.

What’s Driving The Decline

I spoke with a number of industry insiders and experts at Global Pet Expo and everyone struggled to fully explain the decline in households owning pets.

APPA says 36% of the decline in pet ownership households came from animals that passed away and weren’t replaced. Pete Scott, CEO of APPA, said “those are probably boomers aging out of pet ownership,” but only accounts for part of the decline in pet-owning households.

Straggas of K9Wear suggested that the growing importance of Gen Z and Millennials as pet owners may have impacted the decline as those young consumers pair up and move in with other pet owners or move back in with their parents who may also own pets, reducing the number of pet-owning households.

Sean Warner, CEO of feed company Grubbly Farms, thought “part of it might be realizing the amount of upkeep that’s needed on a weekly or monthly basis.”

Dulake of Fera Pet Organics expanded on that point. She said after the holidays every year, many pets go back to the pet store and many unwanted pets are euthanized or let loose and killed.

That post-acquisition regret may be the key to the numbers. The pandemic was a giant accelerator for pet ownership. It’s sad but reasonable to say that the decline in pet-owning households may be driven by new owners who changed their minds once the initial pandemic-induced need for companionship receded and the costs and work involved became clearer.

None of the experts I spoke with disagreed with the “buyer’s remorse” factor or had a better explanation.

Dogs can’t get Covid but it may be that many of them died from the pandemic just the same.

The Future Of Pet Ownership

If the explanation of post-acquisition regret is the major cause of the decline in pet-owning households, then APPA’s forecast for 2023 pet expenditure growth of 4.9% makes sense. It means the decline in households owning pets will prove to be a one-time blip and growth in ownership and spending will continue. Time will tell.

Scott of APPA explained that Gen Z and Millennials are now equal in pet-owning numbers to Gen X and Boomers and those younger consumers’ numbers will increase as a percent of the total as time goes on. Their buying habits, preferring stores over online, preferring experiences over things, using an increasing amount of supplements with more telehealth to replace vet visits, will now be more dominant as the industry continues to grow and the decline in ownership experienced in 2022 will recede.

The pet industry has been recessionproof for a long time. The decline in households owning pets raises the question of whether that continues to be true. Based on the continued increase in spending and the most reasonable explanation for the decline in households owning pets, it appears that the decline is an indication of how the pandemic affected furry friends who are vulnerable to human whims.