Opportunities in U.S. Pet

The U.S pet industry is driving strong growth and longevity, making it particularly attractive for investors. Premiumization, spurred by the humanization of pets, a surge in pet ownership, and the industry’s robustness during economic downturns, are driving forces underpinning this growth. Furthermore, pet benefits from high margins relative to other consumer goods categories, expandability into new products and subcategories, and the prevalence of disruptive models.

Pet, therefore, represents a substantial and growing investment opportunity. The sector has seen strong and sustained growth, even through the Covid-19 pandemic, with the Dog & Cat Food & Treats sector alone now representing a $50 billion industry—expected to reach $65 billion by 2028. While the premium sector is already well-developed, there is significant headroom for growth through innovation in super-premium offerings.

We see three key categories in Pet as being particularly attractive for investors:

1. Food and Treats: This segment continues to expand as brands innovate, particularly to capture remaining headroom in premium categories focusing on products such as freeze-dried, raw-coated, and functional natural. All of these cater to the increasing demand for quality and health-conscious pet food.
2. Contract Manufacturing: The demand for contract manufacturing is on the rise as Consumer Packaged Goods (CPGs) companies and niche disruptors seek to optimize[EA1]  and branch out into new production formats. This segment offers a lower-risk entry point for investors with opportunities for consolidation in a fragmented market.
3. ‘Beyond Food’ Services: Beyond traditional food products, the pet industry is seeing significant growth in services such as veterinary care and pet sitting. The veterinary market, in particular, has experienced a 9% annual growth in spending since 2019, driven by increasing pet ownership and the humanization of pet care. Broader pet care services such as pet sitting services[EA1]  are also gaining traction, though the space remains highly fragmented, presenting an opportunity for professionalization and consolidation.

At OC&C, we have extensive experience across the U.S. pet market, working with both domestic champions and international brands. To learn more about investment opportunities in the pet sector, explore our latest insights below or reach out to our industry experts.