a growing niche theme


In recent years, the number of pets and the money spent on them has been increasing. The Covid-19 pandemic has further strengthened the propensity to cope with stress and isolation during the health crisis. Even if pet care companies have benefited greatly from the pandemic, it should be noted that this industry experienced strong growth before the arrival of the coronavirus: the world market is growing at an average of 5.8% per year.

Pet products sales in the United States (the world’s largest market) are in the billions of dollars:

Source: APPA and Statista

The three engines of growth

This market is driven by the following megatrend: demographic change and social changes on a global scale. On the one hand, life expectancy is increasing in a developed world and pets have become an important source of companionship. On the other hand, the world population tends to work longer and have children later. This new generations therefore they dedicate themselves to “puppies”. For proof, millennials (also called “millennials”) have the most pets. It is in this context that pets occupy an increasingly important place in human life.

Another growth engine: emerging markets. With the increase in the standard of living, the number of pet owners is also increasing. For example, for an industry worth over $25 billion in China, the number of households with pets is close to 100 million. That’s three times more in 2017 than it was five years ago. These trends have led to an increase in the number of pets and spending on them.

our friends animals

Animals help us lead healthier lifestyles. When you have a dog, you need to take him for a walk several times a day. That’s why owning a pet is good for our mental health as well as our physical fitness. Studies show that dog owners are much more likely to meet daily physical activity recommendations. Dog walking or horseback riding allows us to get out of our homes, which is great for our health. So owning and caring for a pet helps us take care of ourselves.

It goes even further than that, as pets have now become full members of the family. Where in the past they lived only outside, they are now settled inside our homes. This development is explained by what is known as the “pet effect”: Numerous scientific studies have shown that pets have a positive effect on our mental health. Service dogs have saved the lives of many soldiers suffering from post-traumatic stress disorder (PTSD). Pets also help their owners better manage their emotions and help people with mental health issues think of something else. Synotherapy (therapy with dogs) is sometimes used to help students reduce stress.

By sharing wealth and love, humans and animals help each other. It’s not surprising that 98% of pet owners see their pet as a member of the family. And this link seems to benefit their health above all else. Scientific studies have shown that cats and dogs can lower blood pressure and levels of the stress hormone cortisol. Their presence also stimulates the production of oxytocin, serotonin and dopamine molecules that help the body relax. Some studies have even shown that dogs can reduce the risk of schizophrenia in adults. This is also what pet owners think about. One survey found that 74% of people surveyed felt their mental health improved after owning a pet. Also, 75% of the participants stated that their friends and family members made the same observation.

Investing in the animal economy

Overall, this is a long-term growth trend with many positive byproducts. For investors, this means that demand for pet food, toys, medical monitoring, accessories and even fashion must remain stable. It is a sector that can offer stable returns in the long run and should continue to rise. The pet economy has also held up well to the shocks, performing well in the last three recessions (2001, 2008 and 2020). This is because pets are part of the family and therefore guaranteed food, medical care and insurance regardless of the state of the economy. An adopted animal usually represents a 10-year partnership; this brings recurring benefits to this market.

Many companies are aware of this and have invested heavily in this industry to take advantage of its strong growth. Zonebourse experts have created a thematic list that aims to identify worldwide players benefiting from the prosperous and lively pet market.

Explore the thematic list by clicking here

Resources:

  • Johns Hopkins Medicine (December 18, 2019), Early exposure to dogs may reduce risk of developing schizophrenia, ScienceDaily.
  • Stock News (December 9, 2020). Freshpet Inc. (FRPT) Enters 52-Week Highs on 09 Dec Session.
  • Newman, K. (May 24, 2018), More From Horseplay, US News.
  • Evans, J. (October 18, 2020), Petcare market boom as lockdown loneliness drives sales, Financial Times.
  • Agne Blazyte (2020), China’s pet industry market size 2010-2019.
  • Zooplus AG Capital Markets Day, 17 November 2020 (November 2020).
  • Human-Animal Bond Research Institute (April 16, 2018), 2016 Pet Owners Survey, HABRI.
  • Allianz Global Investors (25 February 2021).
  • China’s pet economy soared to record highs (July 26, 2019).



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