Nov 2, 2020
Find out Which Pet Product Companies are Benefiting During Covid-19
By Claire Grant
With animal adoptions soaring, spending on the pet industry has boomed.
One surprising trend from the Covid-19 pandemic is the increase in pet adoptions across the U.S.
With people spending more time at home and working from home as a result of the virus, many Americans have taken that opportunity to foster or adopt pets from shelters and breeders. Pet stores and shelters across the country have reported an increase in demand during the shutdown. Meanwhile, sales of pet food and pet products have also climbed.
How pet ownership has changed during the pandemic
Americans have gravitated toward pets during the pandemic. In one survey from TD Bank, 33% of those surveyed said that they had considered getting a pet during economic shutdown. Of those surveyed, 50% of millennials, 33% of Gen X people, and 25% of baby boomers said they had considered getting an animal.
Shelters and breeders have directly experienced a surge of interest in pets. One animal shelter in Los Angeles, California, reportedly had 10 to 13 adoptions a day in June, 2020, roughly double its daily average, according to the Washington Post. And a New York City shelter experienced a 15% increase in adoption rates among people fostering animals. Some shelters have even reported temporarily running out of pets, and have even put prospective adopters on waiting lists.
Eighty-five million households in the U.S., or 65% of households, own a pet, according to a 2019-2020 survey. In 1988, 56% of households owned a pet. More dogs are owned in the U.S. than any other type of pet. Americans collectively own 63.4 million dogs, 42.7 million cats, 11.5 million freshwater fish, 5.7 million birds, 5.4 million small animals, 4.5 million reptiles, and 1.6 million saltwater fish.
How the pandemic has affected companies in the pet industry
The boom in pet ownership has also led to a boom in the pet food and product industry. Owning a pet comes with a whole new set of expenses on food, veterinary trips, medicine, toys, and more. In 2019, Americans spent $75.38 billion on their pets. Dog owners spend $259 on food and $76 on treats every year and cat owners spend $228 and $58 respectively on the same items.
As Covid-19 began spreading in the U.S. in March, 2020, pet owners started buying pet food and supplies in bulk, with e-commerce sales totaling $828 million in March, a 77% increase from the previous year. Brick-and-mortar sales of pet food also increased by 18.5%.
Chewy, an online pet product retailer owned by PetSmart reportedly hired 10,000 additional people to keep up with the demand. Chewy recorded a 47% increase in year-over-year sales in September, 2020. Between March 8 and March 12, 2020, PetValu reportedly experienced a 42.4% increase in sales, while Petco saw a 41.8% increase, and Pet Supplies Plus had a 76.4% boost.
Pet spending has remained high through 2020, with sales 36% higher year-over-year in September, 2020. General Mills, which makes the pet food line Blue Buffalo, announced that it increased its market share in the first fiscal quarter 2020. Natural pet food company Wellpet also said that sales of puppy and kitten products increased 15% during the pandemic.
Tractor Supply, which makes pet products for stable animals, could reportedly see bigger sales. Consumer products companies Clorox and Church & Dwight, producers of cat litter and pet-cleaning products, could also benefit according to industry experts. Meanwhile, ahead of the holiday season, Walmart said it would offer an inventory of 3 million pet beds for new pet owners to browse, according to MarketWatch.
Remember, all investing involves risk, and you can lose money in the market. While many products in the pet industry are considered consumer staples—meaning they can be defensive stocks during a recession—ownership of pets can be subject to changing preferences.
Investing in the pet industry
Adopting a pet can be a big expense. If you’re not ready to take the plunge yet, you can still invest in the pet industry. With Stash, you can invest in fractional shares of pet product suppliers and companies that make pet food such as Chewy, Nestle (which makes Fancy Feast), Walmart, and more.