Americans spent a whopping $60.3 billion on their pets in 2015, topping the previous year's spend by nearly 4%. And though spending on veterinary care rose just 2.5% to $15.4 billion, pet owners are buying more medications than ever before, helping push the total dollars spent on over-the-counter drugs and other supplies up nearly 4% to $14.3 billion.
Those are the top-line numbers from the American Pet Products Association's (APPA) annual report, released March 17 at the Global Pet Expo in Orlando, FL. The organization says that spending on OTC meds is growing so fast it's expected to hit nearly $15 billion this year.
"The use of pet medications and supplements to ensure longer, healthier lives for pets is increasing, thus somewhat offsetting any lower income growth for vet services," said APPA CEO Bob Vetere in a press release announcing the new data. He added that the availability of pet medicines in new retail channels, such as mass-market outlets, is fueling the growth of the drug category in animal health, as is "considerable investment."
Although spending on veterinary care grew relatively slowly in 2015, it was still the second most prosperous category in companion-animal health, behind pet food, according to the APPA.
The growing interest in keeping pets healthy--and paying big bucks to do so--is benefiting several publicly traded animal health companies. Pet hospital chain VCA ($WOOF), for example, beat earnings estimates in the fourth quarter of last year, after its sales for all of 2015 grew 11.2% to $2.1 billion. And the company is clearly betting on further growth, paying $344 million earlier this month for an 80% stake of a 56-hospital veterinary chain in Las Vegas.
PetMed Express ($PETS), which sells OTC animal drugs, has had its share of ups and downs but has seen an upswing recently. The company reported better-than-expected sales in the quarter ended December 31, as its average order size jumped from $76 to $78.
The APPA attributes America's increased spending on pets to an ongoing trend: More than ever, we're treating our four-legged friends as family members. "The pet humanization trend is alive and well and continues to drive growth at the premium end of the market," Vetere said.