Pet finance and the pet market, a booming sector worldwide.
Hello dear friends, I hope you are all very well and have started the week with the best of energies.
Today in the finance blog I come to talk to you about something positive in many aspects and that is a topic that usually brings us pleasant memories, of course from the economic point of view, but I trust that you will appreciate a little away from the apocalyptic predictions of economic crashes or the rebellion of the machines.
Today I want to talk to you about our furry (or feathered, and in some cases scaly too) friends and life companions the pets, and how the economy around them is growing at an accelerated rate every year....
The reasons for this growth are several, one in particular is the growing number of pets in households, with an approximate 2% each year since 2019. In Latin America there were some 670 million pets in 2019, by 2022 there will be an estimated 730 million.
Such projections are based on a number of factors, one of them being reduced poverty and improved living conditions, which mean that more people can afford a pet....
Of course this goes through a paradigm shift in how people, especially the younger ones see pets, until a couple of centuries ago the value of an animal was proportional to its usefulness, a but it fulfilled a function, surveillance, grazing or help in hunting, if it could not make useful was an unnecessary luxury, and in some cases those that failed to fulfill the purpose for which they were bred were euthanized or abandoned, a cat was expected to keep under control pests such as mice, which were a much greater danger than today, as they spread deadly diseases and destroyed crops or stored food.
But as I was saying, nowadays we have come a long way, and the need for pets as a help to conquer the world has been reduced, and pets are seen more and more as family members, in fact, we can say that the need for animals as help at work has been supplanted by a need for them as company, especially in these times, where every day there are more ways to connect with people and yet we are more lonely. Since we share less physically, pets can be a constant source of affection in our lives, even some that people consider cold, like birds, can be a great help to someone going through difficult times.
Also very influential is the growing awareness of animal rights, something I really applaud...as they have contributed so much to humanity, and continue to do so in unexpected ways, that it is only right that they are given protection from both a moral and legal standpoint.
Another factor for the pet boom was the pandemic, the drastic and sudden reduction of human interaction, quarantines and blockades made many people look for pets as an alternative companion, in countries like the United States where despite the pandemic shelters and veterinary clinics continued to work, there were cases of shelters that were completely emptied, as the number of adoptions skyrocketed.
Now... how does this translate into numbers?
Well, the economy of the sectors associated with pets is growing, and it is growing more than the pet population for the reasons I already mentioned.
According to Euromonitor the average is 6% economic growth in pet-related economic transactions in Latin America, and between 5 and 6% for the rest of the world. For an example, in the United States it is estimated 90.5 billion dollars of economic movement related to pet products and services in 2018, in 2019 that figure was 96 billion. And by 2020 it was 99 billion.
In Latin America the pet market moved 1900 million dollars so far this year, and by 2022 it is estimated to close over 2000 million.
In the particular case of Colombia, the following image speaks for itself.
Of course, such numbers and growth projections create opportunities. And also challenges, the use of services such as pet insurance policies, which used to be for a niche market have become more popular as more and more people want the best possible care for their pets in case of illness, dog training is also booming, as there are more and more dogs and owners do not always have the time or ability to train them, services such as veterinary consultation or home beautician are also on the rise.
In food, it is estimated that 63% of pet owners in the United States are willing to pay more for pet foods that better suit their pets' diets.
While the trend is smaller in Latin America, companies such as Nestle have had to increase pet food production by 13%, and Polar, the Venezuelan food company operating in Colombia, has reported that it has had to expand its pet food production capacity.
The opportunity for start-ups and established companies alike is obvious... with cases like Spain where there are already more pets than children under the age of 15, anyone who does not see the economic opportunity that this represents must be blind...
Even in countries in Asia, such as the Chinese giant, where traditionally pet ownership was small compared to the population, it grew by 8% between 2018 and 2019, and the market associated with them as well due to the growth of the middle class.
Conclusion.
I think I speak for many here when I say that it is not difficult to get attached to a pet to the point of seeing it as another member of the family, I in particular consider my Brenda my other daughter and when she gets sick as it happened recently I suffer and worry like a mother, and in those circumstances the money spent on her is never an inconvenience... and I know that's how many here think, so it is totally understandable that the economy that sells those goods and services grows, since every day the number of pets grows and the estimation we have for them increases. We can say without fear of being wrong that the growth of the pet industry will last several years, and represents opportunities for all entrepreneurs in the area, so if you have any venture related to the sector, perhaps this is the best time to start.
And before I say goodbye, I ask you, how much do you love that puss or pug that is with you while you are reading this9. If you show it to us in the comments you can put it along with your suggestions or opinions about it. I read them all, and answer as many as I can.
Recommended Bibliographic Reference
[1] Negocios, actualízate, tendencias, Mercado, mascotas
[3] Seis de cada diez hogares en Colombia tienen una mascota
[4] Las mascotas una tendencia de consumo creciente
[5] Latinoamérica líder en el crecimiento poblacional de mascotas