What Pet Parents Won’t Cut in 2025

Issue #201

June 11th, 2025

Quick Hits:

👕 Exclusive luxury apparel brands keep launching pet inspired designs

😲 Have you ever seen a merle wolf dog?

🤝 Central Garden & Pet is prioritizing M&A in pet consumables

🏙️ Mars is expanding its’ Better Cities For Pets program

For many Americans, pets are family, and that bond is proving financially resilient.

The U.S. pet industry is projected to reach $157B in sales in 2025 despite high inflation, as pet owners refuse to skimp on their companions’ care. In fact, 77% of pet owners say the current economy hasn’t affected their pet ownership, underscoring how pet care remains a top priority.

From premium foods to vet visits, spending in key categories remains strong and strategic, even as consumers tighten other parts of their budgets.

I’ll explore which pet spending areas are still growing (and why), what’s holding steady, where cuts are happening, and how pet businesses can adjust.

High-Growth Categories That Are Defying Inflation

Even as 2024 marks a rebound in overall pet food unit and volume growth, premium niches continue to lead the charge.

After years of dollar growth outpacing volume due to inflation, unit sales are now catching up.

Q1 2024 showed +4.5% volume growth and +6.6% unit growth in pet food.

This suggests that more pet parents are not just spending more, but buying more -particularly in categories seen as healthier or higher-quality.

Fresh/frozen diets and freeze-dried formats remain two standout segments, offering a compelling mix of nutrition, convenience, and perceived health benefits.

• Fresh & Frozen Pet Food: Refrigerated and frozen pet food – think fresh meal subscriptions, frozen raw diets, and human-grade recipes have surged.

  In 2023, the fresh/frozen segment saw +21.4% growth in dollar sales and +14.3% in units, one of the rare categories achieving both revenue and volume growth.

  Pet owners are flocking to these diets because they view them as healthier and more “human-like” fare for their pets, aligning with the humanization trend. Interest in fresh pet nutrition has climbed steadily in recent years. The perception of fresh/frozen diets as offering superior health benefits (e.g. less processed, more natural ingredients) makes buyers reluctant to trade down despite inflation.

• Freeze-Dried Formats: Similarly, freeze-dried pet foods and toppers – which deliver raw nutrition in a shelf-stable form – are defying the downturn.

  Freeze-dried products saw +21.7% dollar growth and +9.6% unit growth in 2023. These foods are pricey on a per-pound basis, yet pet parents are investing in them for their convenience (just add water) and high-protein, raw-like nutrition

  (if you’ve ever tried traveling with fresh and/or frozen raw pet food, it will really make you second guess yourself if you’re fully committed to the cause).

  We Feed Raw launched their freeze-dried offering a few months back to capitalize on the accessibility for dog owners to pursue raw diets.

  

  We Feed Raw | Freeze-dried Chicken

  By offering the best of both worlds – raw diet benefits and ease of use – freeze-dried options are gaining share even among cost-conscious shoppers. Pet owners justify the spend as an investment in their pet’s health and happiness.

• E-Commerce & Autoship: The shift to online purchasing in pet retail continues unabated. Online channels now account for about 39% of total U.S. pet care sales, and that share keeps rising thanks to autoship subscriptions and digital convenience.

  In fact, nearly 80% of all pet care dollars are now coming from shoppers who use both online and in-store options (omnichannel), with subscription programs leading the charge.

  As discussed many times here before, Chewy’s Autoship program is a prime example: Chewy reports that recurring Autoship orders now make up roughly 80% of its sales.

  Pet parents have embraced “set it and forget it” deliveries for food, litter, and meds – a model that boosts retention and locks in spending. The graph below from NielsenIQ illustrates how subscription purchases (purple line) have outpaced one-off e-commerce purchases (blue line) over the past four years.

  

  Pet owners subscription spend vs. non-subscription

  In marketing content is king, but in e-commerce, convenience is king, and consumers facing inflation are doubling down on hassle-free, scheduled deliveries for pet essentials.

What’s Holding or Growing in Services

Not all pet expenditures are products – services are a significant slice of the pet dollar, and they’re holding strong.

Veterinary care in particular remains non-negotiable.

Americans spent $39.8 billion on vet care and related products in 2024, and that figure is climbing as vet costs rise (which is consequently driving increasing interest in pet insurance).

Veterinary spending is considered essential healthcare for pets, so even if owners switch to cheaper food, they typically won’t skip vet checkups or treatments.

Other pet services are also proving resilient…

• grooming

• training

• boarding/doggy daycare

• pet sitting

In 2024, “other pet services” totaled about $13.0 billion in the U.S.

This category (which includes grooming, boarding, training, walking, insurance, etc.) has rebounded from the pandemic dip and is steady or growing.

Pet parents view many of these services as part of responsible pet ownership rather than optional luxuries. They’ll cut nice-to-have extras for themselves before they cut the dog’s grooming or the cat’s boarding stay.

In other words, services that keep pets healthy, clean, and safe are seen as “must haves,” making them far less sensitive to economic swings than truly discretionary purchases.

What’s Being Cut

Of course, inflation has forced some trade-offs.

The data shows pet owners are trimming expenses in areas deemed less essential or more indulgent.

The first things on the chopping block: treats and toys.

• Treats and Toys Take a Hit: An international survey from 2024 of pet owners from France, Canada, US and Uk confirmed that treats (24%) and toys (22%) are the top categories where people are cutting back during an economic squeeze.

  Pet parents might skip the extra bag of gourmet dog biscuits or hold off on replacing Fido’s plush squeaker toy if money is tight. These items, while enjoyable, are considered non-essentials compared to food or vet care.

  

  BARK’s FY 2024 revenue drop of 8.4% was largely due to carrying fewer BarkBox and Super Chewer subscriptions

  Even though the overall U.S. treats market enjoyed huge growth during the pandemic, it’s now coming back to earth as consumers re-prioritize core needs.

• From Indulgence to Utility – Brand Pivots: Smart pet product brands aren’t just accepting decline in these discretionary categories – they’re adapting their marketing and product mix.

  Many are pivoting from pure “spoiling and fun” messaging to emphasize utility and value. For example, treat companies are launching “functional treats” that double as health supplements (think soft chews that also support joint health) to make treats feel more necessary.

  Others are offering value-sized packs or bundle deals to stretch the dollar. The idea is to justify the cost through practical benefits – positioning a treat as part of the pet’s wellness routine, not just an indulgence. By educating consumers on the long-term benefits (e.g. a calming treat that reduces anxiety, saving a potential vet visit), brands can mitigate some of the price resistance and keep shoppers engaged even when wallets are tight.

  In short, framing products as solving a problem or fulfilling a real need is key to staying in the cart.

Who’s Spending: Demographic Shifts

Another big story in where the pet dollars are flowing is who is driving the spend. Demographic shifts – especially the rise of Gen Z pet owners – are reshaping the market.

Gen Z pet ownership is surging: In 2024, Gen Z accounted for 20% of U.S. pet-owning households (18.8 million homes), a 43.5% jump from the previous year.

This is not only a huge influx of new pet parents, but their profile differs from prior generations. Notably, 58% of Gen Z dog owners are male (as are 63% of Millennial dog owners), reflecting that more young men are joining the ranks of pet caregivers than ever before.

@darcyanddad

The most amazing creature ever created 🐶🐶🐶 #amazing #cutedog #dachshund #sausagedog #doglife

This means the old stereotypes of pet moms as the primary customer are expanding – marketing must speak to a broader, more diverse audience of pet dads and multi-pet households.

Equally important is how Gen Z likes to shop and engage.

This is the generation of digital natives, and they’re bringing those habits to pet care.

Gen Z pet owners heavily leverage social media and online communities to discover products and services.

They rely on platforms like TikTok, YouTube, Instagram (and yes, even Reddit threads) for pet advice, trends, and reviews.

As APPA’s research highlights, brands will need to use visual, digital-first strategies to capture Gen Z’s attention – meaning mobile-friendly content, influencers, and viral pet videos might be as important as shelf placement.

Moreover, Gen Z cares deeply about brand values and authenticity. They favor pet brands that align with their ethics – whether that’s sustainability, social responsibility, or cruelty-free practices.

A values-driven, community-oriented approach, combined with seamless e-commerce and subscription options, is what it takes to win the hearts (and wallets) of these young pet parents.

Businesses that adjust to Gen Z’s expectations stand to gain a customer base that could be loyal for decades.

Actionable Takeaways for Pet Brands

In light of these trends, here are some strategic moves for pet industry founders, operators, and investors to consider:

• Invest in High-Retention Formats: Double down on categories that drive repeat purchase and loyalty. Premium food formats like freeze-dried, fresh-refrigerated, and subscription meal plans have shown they can retain customers even in tough times.

  These formats not only grew over 20% last year, but they also encourage ongoing engagement (pets need to eat daily!). Similarly, subscription models should be a priority – convenient recurring deliveries keep revenue flowing.

  Seek to make your product a recurring need in pet parents’ lives, not a one-off treat.

• Tailor Offerings for First-Time & Younger Pet Parents (Especially Men): The influx of Gen Z and Millennial pet owners – with young men in particular now a majority of new dog owners – calls for a fresh look at product design and marketing.

  Ensure your branding isn’t unintentionally excluding this rising demographic. Products that appeal to tech-savvy, often busy young professionals can resonate well.

  Meet them on digital platforms: engage with TikTok trends, Instagram reels, and online communities to build trust. And remember the values component – emphasize your mission (sustainability, rescue support, etc.) authentically to earn Gen Z loyalty.

• Use an “Essential Services” Framing: Whether you’re selling pet insurance, grooming services, or training classes, frame them as essential to pet well-being.

  During economic lulls, consumers scrutinize what’s truly necessary. Craft messaging that positions your service as part of responsible pet parenting – for example, stress that regular grooming prevents health issues, or training leads to a happier home (not just a well-behaved dog).

  By highlighting the tangible health, safety, or emotional benefits, you make it harder for pet parents to cut your service from the budget. The more your offering feels like a must-have (and not a luxury), the more “inflation-proof” it becomes.

• Focus on Needs-Based, Recurring Revenue Over Impulse Buys: Finally, skew your product mix toward items that customers plan to buy rather than those bought on a whim.

  The data shows people are pulling back on spontaneous, nice-to-have purchases (like extra toys or novelty treats).

  But they continue to spend on subscription, preventative health products, and consumables that are part of a routine.

  If you’re a pet retailer, emphasize loyalty programs and subscription plans for staples. If you’re a product maker, consider adding functional benefits that encourage daily or weekly use.

WINNER 🏆️ : DOGGYDEX

(🔥🔥 Heating up with 2 consecutive weekly wins)

 Proudly introducing the DoggyDex™, an index comprised of 10 publicly traded companies whose primary focus is the dog/pet industry.

List of tickers used can be found below.

The yellow line-plot in the chart represents these companies above (DoggyDex™) and their combined performance against both the S&P 500 and Bitcoin on a weekly basis.

Pawformance is measured by % gains & losses.

• $CHWY - Chewy: E-commerce platform for pet supplies

• $IDXX - Idexx Labs: Vet point of care instruments and vet software

• $FRPT - Fresh Pet: Pet food company

• $ELAN - Elanco: Manufactures pet disease prevention products

• $PETS - PetMeds: Online pet pharmacy

• $ZTS - Zoetis: World's largest producer of meds and vaccines for pets and livestock

• $TRUP - Trupanion: Pet insurance company

• $WOOF - Petco Health & Wellness co.: Pet health & wellness company

• $BARK - BarkBox: Subscription service providing dog products, services, and experiences

• $PET - Wag! Group Co.: Tech platform that allows pet owners to connect with industry professionals for services such as walking, training, etc.

The search for “pup cup” over the past 5 years shows a clear upward trajectory—this isn’t just a passing social media trend; it’s turning into a cultural staple for pet parents.

• 2020–2021: Interest was pretty sporadic and relatively low, with some occasional spikes (likely tied to viral TikToks or seasonal promotions).

• 2022 Onward: Things start picking up. You can see a steady climb in baseline search volume, with peaks that are higher and more frequent. This suggests broader awareness and recurring demand.

• 2023–2025: The search interest stabilizes at a much higher floor than earlier years. We’re seeing consistent spikes, possibly tied to warmer months or national pet-related holidays. And now in 2025, it’s hitting all-time highs with projected continued growth.

Pup cups aren’t just a cute marketing moment - they’re a sticky, shareable, recurring behavior.

The trend’s endurance suggests pet owners are actively seeking these kinds of micro-indulgences, especially ones they can experience with their pets. For cafés, retailers, or brands looking for engagement boosters, this is a low-cost, high-love activation opportunity that still has plenty of headroom.

Surely we can get more creative than just a tiny cup with whipped cream!

You reached the end, you deserve a treat 🍖

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See you Friday!