Pet Health: Products & Services Industry

Consumer spending on pets to reach $31.7 billion in 2016

US spending on pet health products and services at the consumer level is expected to reach $31.7 billion in 2016. Manufacturers’ level pet health product demand is forecast to increase 4.6 percent annually to $5.6 billion that year. Advances in expenditures will be encouraged by the continuing trend of humanizing companion animals and their perception as family members, as well as by growth in the overall pet population. Veterinary technology will continue to adapt diagnostic and treatment techniques from human health care, stimulating value gains for newer, more costly procedures.

Revenues for pet insurance to continue double-digit growth

While the US pet health industry has traditionally been regarded as being “recession-resistant,” spending was somewhat impacted by the 2007-2009 US economic recession. However, demand did not experience declines during this time, as health care is a necessary -- and, to some degree, expected -- expenditure for pet owning households. Uncertain economic conditions led to especially strong growth in demand for services such as pet insurance and for products, including dietary supplements, intended to prevent medical conditions. Among products, pharmaceuticals will retain the leading share of sales, following trends in human medical treatment. As spending on pet health has increased over the last several decades, so have the average expected lifespans of many companion animal species. Accordingly, incidences of age-related medical conditions (e.g., arthritis, cancer) have also grown. Increasingly prevalent weightrelated conditions (e.g., diabetes, heart disease) will further lead to increasing demand for products and services, as a significant number of pets are overweight or obese. In order to better afford these treatments, more owners will purchase pet insurance policies, with revenues expected to continue to grow at doubledigit annual rates.

Health care expenditures on products for cats to increase

While cats have long represented the largest segment of the pet population, spending on health care products for dogs accounted for a disproportionate 69 percent of the total in 2011. Dogs’ greater time spent outdoors raises their exposure to environmental hazards, and dogs are more susceptible to certain medical conditions, such as heart disease. However, research and development into more catspecific health products will incrementally increase cats’ share of the pet health product market going forward.

Study coverage

This upcoming Freedonia industry study, Pet Health: Products & Services, presents historical demand data (2001, 2006 and 2011) plus forecasts for 2016 and 2021 by pet health product, service, medical condition and animal. The study also considers market environment factors, evaluates company market share, and profiles 41 US industry producers (such as Bayer, Merck, Merial, Novartis and Pfizer) and insurers (such as Embrace, Hartville Group and Pethealth).

Veterinary Healthcare Industry in the United States

TABLE OF CONTENTS

INTRODUCTION ix

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4
General 4
Macroeconomic Outlook 4
Consumer Income & Spending Trends 8
Demographic Trends 10
Population 11
Household Formation 13
Pet Demographic Trends 16
Cats 18
Dogs 20
Other Pets 21
Pet Health Service Provider Overview 23
Veterinary Practices & Employment 24
Non-Veterinary Pet Care 26
Pet & Pet Supply Stores 27
Pet Insurance 27
Medical Conditions 28
Pet Health Spending Overview 30
Nontraditional Health Care 33
Regulatory & Environmental Issues 34
Center for Veterinary Medicine 34
Animal & Plant Health Inspection Service 37
Environmental Protection Agency 38
Other Regulations 39
World Pet Health Care Market 40

III. SERVICES 43
General 43
Veterinary Care 44
Surgery 46
Growth Removal 48
Orthopedic 49
Gastrointestinal 49
Declawing & Other Cosmetic Procedures 49
Neutering/Spaying 52
Other Surgical Procedures 53
Non-Surgical Revenues 55
Non-Veterinary Pet Care 57
Pet Insurance 61
Available Plans 63
Market Share 65

IV. PRODUCTS 71
General 71
Pharmaceuticals 73
Systemic Agents 76
Hormones & Insulin 78
Pain Control 81
Anti-Inflammatory Agents 83
Gastrointestinal Systemic Agents 85
Cardiovascular Systemic Agents 87
Respiratory Systemic Agents 88
Other Systemic Agents 89
Antibiotics 91
Other Pharmaceuticals 94
Anesthetic Agents 95
Euthanasia Agents 97
All Other Pharmaceuticals 98
Parasiticides 101
Flea & Tick 103
Heartworm 106
Other Parasiticides 108
Prescription Food 110
Dietary Supplements 112
Vaccines 116
Diagnostics 119
Other Pet Health Products 121

V. CONDITIONS 125
General 125
Skin Conditions 127
Heart Conditions 131
Gastrointestinal Conditions 134
Renal Conditions 137
Arthritis 140
Diabetes 143
Other Conditions 146
Respiratory Conditions 147
Cancer 148
All Other 150

VI. ANIMALS 154
General 154
Dogs 156
Cats 159
Other 163
Birds 164
Small Animals 165
Reptiles & Amphibians 167

VII. INDUSTRY STRUCTURE 168
General 168
Market Share 170
Industry Restructuring 176
Competitive Strategies 178
Cooperative Agreements 180
Marketing 184
Distribution Channels 185


Company Profiles 188

Abbott Laboratories 189
ADER Enterprises Incorporated 191
Bayer AG 192
Beefeaters Holding Company Incorporated 194
Boehringer Ingelheim GmbH 197
Central Garden & Pet Company 199
Colgate-Palmolive Company 202
Embrace Pet Insurance Agency LLC 204
Farnam Companies, see Central Garden & Pet
Four Paws Products, see Central Garden & Pet
FURminator, see Spectrum Brands
Hartville Group Incorporated 206
Hartz Mountain, see Sumitomo
Heska Corporation 208
Hill’s Pet Nutrition, see Colgate-Palmolive
IDEXX Laboratories Incorporated 212
Intervet/Schering-Plough Animal Health, see Merck
Mars Incorporated 216
Merck & Company Incorporated 218
Merial, see Sanofi
Natura Pet Products, see Procter & Gamble
Nestlé SA 223
Novartis AG 226
Nutri-Vet, see Beefeaters
Nylabone Products, see Central Garden & Pet
PBI/Gordon Corporation 228
Pegasus Laboratories, see PBI/Gordon
PetAg Incorporated 231
Pethealth Incorporated 233
Pfizer Incorporated 236
Procter & Gamble Company 240
PTZ, see Pethealth
PurinaCare Insurance Services, see Nestlé
Royal Canin, see Mars
Sanofi 243
Sergeant’s Pet Care Products Incorporated 245
Spectrum Brands Holdings Incorporated 249
Sumitomo Corporation 253
Synbiotics, see Pfizer
Trophy Animal Health Care, see PBI/Gordon
United Pet Group, see Spectrum Brands
VCA Antech Incorporated 255
Veterinary Pet Insurance Company 257
Virbac SA 259
Wellmark International, see Central Garden & Pet

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY
Summary Table 3

SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators 7
2 Personal Consumption Expenditures 10
3 Population & Households 13
4 Households & Pet Ownership 16
5 Pet Population 18
6 Pet Health Service Providers 24
7 Selected Pet Medical Conditions 30
8 Pet Health Sales & Services Revenues 32

SECTION III -- SERVICES
1 Pet Health Service Revenues by Type 44
2 Veterinary Care Service Revenues by Type 46
3 Surgery Revenues by Type 48
4 Non-Surgical Revenues by Type 57
5 Non-Veterinary Pet Care Revenues 60
6 Pet Insurance Revenues 63

SECTION IV -- PRODUCTS
1 Pet Health Product Demand by Type 72
2 Pharmaceutical Demand by Type & Animal 76
3 Systemic Agent Demand by Type & Animal 78
4 Antibiotic Demand by Type & Animal 94
5 Other Pharmaceutical Demand by Product & Animal 95
6 Parasiticide Demand by Type & Animal 103
7 Flea & Tick Treatment Demand by Type & Animal 106
8 Heartworm Treatment Demand by Animal 108
9 Other Parasiticide Demand by Animal 110
10 Prescription Pet Food Demand by Animal 112
11 Dietary Supplement Demand by Type & Animal 116
12 Vaccine Demand by Animal 119
13 Diagnostics Demand by Animal 121
14 Other Pet Health Product Demand by Type & Animal 124

SECTION V -- CONDITIONS
1 Pet Health Product Demand by Condition 126
2 Skin Conditions: Pet Health Product Demand by Type & Animal 131
3 Heart Conditions: Pet Health Product Demand by Type & Animal 134
4 Gastrointestinal Conditions: Pet Health Product Demand by Type & Animal 137
5 Renal Conditions: Pet Health Product Demand by Type & Animal 140
6 Arthritis: Pet Health Product Demand by Type & Animal 143
7 Diabetes: Pet Health Product Demand by Type & Animal 146
8 Other Conditions: Pet Health Product Demand by Type, Condition, & Animal 147

SECTION VI -- ANIMALS
1 Pet Health Product Demand by Animal 155
2 Dog Health Product Demand by Type 159
3 Cat Health Product Demand by Type 162
4 Other Pet Health Product Demand by Type 164

SECTION VII -- INDUSTRY STRUCTURE
1 Pet Health Product Sales by Company, 2011 169
2 Selected Acquisitions & Divestitures 178
3 Selected Cooperative Agreements 182

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT
1 World Pet Health Product & Service Demand, 2011 42

SECTION III -- SERVICES
1 Pet Insurance Market Share, 2011 66

SECTION IV -- PRODUCTS
1 Pet Health Product Demand by Type, 2011 73

SECTION V -- CONDITIONS
1 Pet Health Product Demand by Condition, 2011 127

SECTION VI -- ANIMALS
1 Pet Health Product Demand by Animal, 2011 155

SECTION VII -- INDUSTRY STRUCTURE
1 Pet Health Product Market Share, 2011 172