Forecast is grim for veterinary services in 2020
Packaged Facts expects a pandemic-related thrashing of the U.S. pet market over the short term.
The coronavirus pandemic will batter the U.S. pet market in 2020 and especially the animal care sector, where revenue from veterinary services is forecast to plunge by 30%, according to the market research firm Packaged Facts.
The company’s newly released report, “U.S. Pet Market Outlook,” predicts a 20% rebound in veterinary services in 2021, rising to $25.3 billion, which would match what the profession achieved in 2016. The industry ended 2019 with veterinary services revenue of $30.07 billion.
Non-medical services such as boarding, grooming and pet sitting will be hardest hit in 2020 as owners follow stay-at-home orders and limit travel, Packaged Facts stated. That segment can expect a 47% drop in revenue, to $5.5 billion, potentially closing “mom-and-pops whose businesses might not survive the crisis,” according to the report’s executive summary.
Out of all four pet market sectors — veterinary services, non-medical pet services, retail channel pet supplies, and retail channel pet food and treats — the latter is projected to fare the best. Sales of pet food and treats should grow by 4% in 2020, to $38 billion, a decline from the pre-virus projection of 6%.
Calling food sales “recession resilient,” Packaged Facts attributed the slower growth to owners opting for “lower-cost private-label and value brands.”
Veterinary services comprise the second-largest segment of the U.S. pet market after food sales.
“Unlike pet food, veterinary care often can be — and is being — postponed in non-emergency circumstances,” the report’s executive summary explained. “Partially rising to the occasion is veterinary telehealth, but with only limited power to pick up the short-term slack.”
Citing consumer surveys conducted in February and March, Packaged Facts found pet owner sensitivity to the cost of veterinary care.
“74% of dog owners and 75% of cat owners are concerned about the affordability of emergency health care for their pets, and 68% of dog owners and 70% of cat owners are concerned about the affordability of routine health care,” according to the report.
Packaged Facts added that “Pet insurance is rapidly gaining ground among pet owners who otherwise might not be able to afford routine veterinary visits, much less emergency care and advanced procedures.
“During the pandemic and its aftermath, lower-cost pet health care will be more important than ever, and those able to meet the need will reap not just dollars but goodwill not likely to easily fade.”
The full report is available for purchase at https://bit.ly/2yu6Fh3.
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