Pets are increasingly considered as part of our families and you can see this in pet industry numbers too. According to American Pet Products Association (APPA), Americans spent $103.6 billion on their pets in 2020. That’s an increase of nearly 7% from 2019. Insider Monkey estimates that the pet market will surpass $110 billion in 2021. More than 40% of this amount is spent on pet foods and treats, 30+% is spent on vet care and products, and more than 20% is spent on supplies, OTC medicine and live animals.
According to APPA, Americans own more than 63 million dogs, 43 million cats, 11.5 million freshwater fish, and 5.7 million birds as pets. Dog owners estimate that they spend an average of $426 per year on pet surgery, $212 on routine vet visits, and $58 on vitamins. The corresponding figures for cat owners are $214 on pet surgery, $160 on routine vet visits, and $54 on vitamins. As you can estimate, pet healthcare spending is a major and growing expense category for animal lovers.
Pet business is also nearly recession proof and this makes sense. Even though we went through a sharp market correction in March 2020, ProShares Pet Care ETF (PAWZ) outperformed the market during and after the correction. PAWZ “invests in a range of companies that stand to potentially benefit from the proliferation of pet ownership. In this article we will use this ETF as our yardstick.