The pet industry – led by the expansion of animal health – is expected to see significant growth through 2030.
Brain surgery and nanotechnology are part of the future of healthcare, not only for humans but also for animals: trends indicate that pets receive increasingly sophisticated care, an image of the treatment given to their human companions .
This trend, along with a recent increase in the number of pets (as well as the expected increase in meat production), heralds a boom in the veterinary healthcare market for the next decade, driving investment in scientific medical training, equipment and facilities such as clinics.
How Pets Became a Long-Term Investment
Pet ownership has soared during the COVID-19 pandemic, with a study by US bank Morgan Stanley showing that the number of pets in the US alone increased by at least 5 million between 2019 and 2022.
The bank predicts a 14% increase in pet ownership by 2030 in the United States alone and a similar trend has been observed in Europe.
“Everyone is moving to cities and yet the rate of mental illness is higher. At the same time, there is a pet boom. And pets are known to alleviate depression and reduce anxiety,” said Junko Sheehan, CEO and founder of the European veterinary network UNAVETS, adding that longer life expectancy has also had an impact on this number, because older people need pets. company.
With the increase in the number of pets, the willingness to spend on their needs has also proven to be resistant to crises.
Although the cost of living has skyrocketed over the past two years, spending on pet needs, including premium and personalized pet food, accessories, as well as pet health service companies, has increased considerably.
“We found that people are really willing and very focused on their pet’s health care, and sometimes they even spend more on their pet’s health care than they do on their own health care,” Sheehan said of your experience in Europe. “They would rather take their dog or cat to the vet and will give up the money for a better vacation or give up the exam itself. »
The pet industry’s resilience to economic downturns shows that the benefits for the industry are likely to be long-term, analysts say. It’s not just a play on words: In business, a “long tail” strategy involves making huge profits by selling durable, hard-to-find products in small quantities to a large consumer base, rather than selling large quantities of a few products. common. products.
“Overall, the pet category continues to be an attractive and defensive investment, both in food and products, as well as in veterinary, insurance and other services, investing in the relatively low-risk pet sector,” said Simeon Gutman , Morgan equity analyst. Stanley.
A closer look at the European market
There are around 340 million pets in Europe and its veterinary market is valued at around 40 billion dollars (36.52 billion euros) and is growing rapidly. The largest markets are in the United Kingdom and Spain, the latter offering 6,000 practices and veterinary hospitals and clinics. Germany, France and Italy are also important markets.
Although the market is largely dominated by a few large players in the US and UK, continental Europe is still in the early stages of consolidation and the market remains highly fragmented.
“When you look at the percentage owned by a group, that percentage is still very low,” Sheehan said. “And I think that’s where the opportunity exists for investors.” »
The European veterinary market is the second largest in the world and is expected to grow 6.4% by 2027, according to a 2022 study by market research firm Renub Research.
What’s the latest in pet health?
The veterinary healthcare sector is expected to grow over the next decade, thanks to a combination of greater knowledge about animal welfare, the growing prevalence of animal diseases and the rise in preventative care driven by the vaccines sector.
A report from The Business Research Company predicts annual growth of 7.5% for the global veterinary market, from $180.32 billion (€164.62 billion) in 2022 to $195.77 billion ( 178.72 billion euros) in 2023, potentially reaching more than 320 billion dollars (292 billion euros). ). billion).
“You can do everything from a pacemaker for a dog to a hip replacement… we see brain surgeries and tumor removal,” Sheehan said. “And even chemotherapy, for example, for cancer in dogs and cats, when maybe in the past you would have euthanized your pet and that would have been the next option. »
As the industry increasingly integrates technology, with the regular use of equipment such as CT scanners and MRIs, prices are expected to increase. One reason is that “there is a global shortage of veterinarians,” Sheehan said.
At the same time, veterinary specialization plays an increasingly important role, with veterinarians becoming increasingly specialized in different areas of healthcare.
“We have neurosurgery, oncology, cardiology, dermatology, orthopedics and internal medicine,” Sheehan noted.
Pet insurance is also expected to see rapid growth, according to Morgan Stanley, noting that the sector saw 26% annual growth between 2017 and 2021 in the United States alone.
In Europe, the market is smaller, but it is growing quickly: it was worth 3.2 billion dollars (2.92 billion euros) in 2021 and is expected to grow 9.2% per year and reach 6 billion dollars ( 5.48 billion euros) in 2028, according to a study. report from Blue Weaving Consulting.
Another report from Market Data Forecast estimates the current size of the European market at just under a billion dollars (910 million euros), but expects it to grow by more than 12% per year until “2028”.
“If a specialist, a CT scan or an MRI is needed, which can be quite thorough, pet owners feel more comfortable doing that with insurance,” Sheehan said. “So I hope that insurance continues to be a driver, a leading indicator, of how we see the level of health care for pets continue to evolve. »