The pet care industry is a $120+ billion market opportunity in the U.S., with about 70% of households owning a pet. During the COVID-19 pandemic, pet adoption rates skyrocketed by over 110%, and fostering grew 197% yearly. The pandemic’s impact on the pet industry is more than this. We did a deep dive into how various segments in the industry evolved over the past two years. And here is why we think the pandemic is a boon for the pet industry.
The boom of telehealth platforms
Telehealth adoption has rapidly increased during the pandemic. Moreover, pet telemedicine has boomed since the FDA lifted its requirement for in-person veterinary examinations for fear of spreading the virus. Daily downloads for virtual vet apps rose 40% back in March 2020, so the pandemic really did accelerate the growth of pet telehealth.
This uptick in telemedicine has appeared to continue in the past two years. And we have seen a huge increase in the number of telehealth companies in the market. There’s also growth in terms of the range of services offered. For instance, telehealth company Fuzzy has a pet store that sells pet products, and it also offers pet insurance to pet parents.
Pet wearables continue to charter on
The pet wearable space is competitive but one with growth potential. The majority of the pet adoption that has been increasing can be attributed to the GenZ and Millennial population. They are also more likely to buy wearable devices for their pets.
We’ve seen smart dog collars with functionalities like enabling identification and GPS tracking in the market for a long time. However, there’s been a shift to smart products that look into pets’ medical diagnosis and treatment. Health features have taken over in relevance, and pet parents want to see as many health features added as possible. For instance, Maven (Plug and Play Animal Health Batch 2) is providing pet parents with a personal vet to track the pet’s safety and health 24/7. The next big disruption in this space would be surgically implanted monitors for diagnostics.
Pet insurance grows steady
We have seen consumer demand for pet insurance, especially dog and cat insurance, grow slowly but steadily over the past few years. The increase in pet adoption has been a major driver for the market. Moreover, growth is expected to come from increased demand to help limit out-of-pocket expenses on critical medical conditions like cancer and accidental injuries. There have also been ongoing discussions with government regulators to create a more robust regulatory framework for pet insurance. The pet insurance industry is predicted to grow by 8% in 2022, and we see this trend of slow and steady growth continue over the next few years.
Smart pet feeders enable pet owners to feed their pets different types of food at specific times of the day without being physically present. That makes them cater well to the busy lifestyle of GenZ and Millennial pet parents. We’re seeing innovative smart feeders on the rise with companies like PupPod (Plug and Play Animal Health Batch 3). PupPod has built the most advanced and interactive dog game ever created. It can give dogs the physical activity and mental stimulation they crave while providing proper nutrition through its feeder. The game also gets more challenging as dogs get smarter, so pet owners can keep their pets engaged.
We’ve also seen some exciting innovations in home appliances that cook healthy pet food. For instance, Kibus Petcare is one of the first companies with a “Kitchen robot” that automatically prepares the exact amount of food dogs need and cooks it to the optimal temperature.
At-home testing is another category that has boomed in the pandemic. More companies are bringing in tests such as food intolerance tests, worm tests, and more specific tests like dog lungworm tests and Giardia tests for dogs. They are great additions to those that have been around for a while, for instance, DNA tests, gut health tests, urine tests, etc. The breadth of tests in the market has been expanding over the past few years. However, more vertical integration in the diagnostic test space is yet to be seen.
Other at-home diagnostic solution categories, such as smart cat litter boxes and smart pet thermometers, are also growing. For instance, Mella Pet Care’s thermometer takes pets’ body temperature and displays the result on pet parents’ smart devices while allowing their vet instant access to that data.