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When we looked at millennial trends recently, one of the main findings was that they are delaying marriage, housing, children, and other life milestones until later in life. While other generations may not see this as too much of a problem, according to JP Morgan’s chief global strategist, David Kelly, these delays could actually result in a slowdown in the U.S. economy.
However, not all industries are slowing. While the housing market and auto industries are particularly effected, millennials are ‘filling the void’ with pets – and the pet care industry is booming.
‘Everyone thinks they have the best dog. And none of them are wrong.’ – W.R. Purche, author
59%* of British consumers own a pet, according to a recent study, with us Brits projected to spend over £2 billion* on our furry, feathered or scaly friends by 2023. These numbers don’t even take into account the cost of buying a pet in the first place: the cost of buying dogs from breeders, pet stores, shelters, or private adoption, for example, reaches somewhere in the vicinity of £8.7 billion** each year.
When you compare these figures with the fact that 54%* millennials said they’d prefer to cut back spending on themselves than their pet, it’s clear that our pets aren’t just our pets – they’re family. Figures also show we’re consuming as such: taking them on holiday, buying premium foods, ensuring they receive the best care and all the other added luxuries of life – no matter the expense to ourselves.
Higher-quality pet food is becoming the norm for most, and household names are creating new and specialist lines to accommodate the changes in the industry. It’s no longer puppy, adult and senior lines of kibble. From grain free or soy free, to veterinary diets, there’s an abundance of choice.
Nestle, the Swiss multinational food and drink company, which is a top holding in GAM Star Continental European Equity***, acquired Purina in 2001. By 2006 it had the largest market-share (about a third) of the pet food industry^. In 2018, Purina made up 14% of Nestle’s annual sales and had become its fasting growing brand, consistently reaching 1 billion Swiss Francs in sales across every region where it’s sold.^^
But there’s more to it than just food: Purina has been so successful because it’s gone on to provide pet insurance products and a specialist line of treats to advance veterinary research. Another aspect is pet pharmaceuticals or veterinary products like antibiotics.
One of the effects of humanising our pets is that we opt for premium care. I can speak from experience that I will, and do, pay thousands a year in medication to keep my dog healthy. One of these medications helps to keep her hypothyroidism under control, and is produced by Dechra Pharmaceuticals, the second largest holding in EdenTree Amity UK***. Dechra develops and manufactures high quality products exclusively for veterinarians, including the antibiotics used to treat and stop the spread of infections in cows on diary farms.
If you’re spending all this money on caring for your pets, it stands to reason that you’re also more likely to have an excellent pet insurance plan. Available from large providers like Sainsbury’s Bank, to boutique specialists such as 4Paws Pet Insurance, the options of coverage range greatly. For example, 4Paws Pet Insurance is the only pet insurance provider underwritten by insurance giant Aviva, the UK’s largest insurer and top ten holding in Schroder Income***.
The cost of owning a pet is expensive and based on this research I’d dare to say pets are the real reason millennials are broke – not avocado toast. A rough estimate puts our dog’s annual cost at £2,000 and that doesn’t include having to spend more on holidays to have a pet friendly hotel, driving rather than flying, and any number of additional pet care costs. Multiply that over the span of his or her 10+ year life expectancy, and a little extra for senior care and one-off vet services, and you’re looking at close to £30,000.
Sure, I could have saved that money for a house deposit, but that house is never going to wag it’s tail when I come home from work, stay by my side all day and night when I’m ill, protect me when I’m home alone, or sleep on top of my feet keeping them warm while I write this. So millennials rent, we put off children, and we plan for a second dog instead.
*Source: Mintel, 16 October 2018
**Source: The Dog Merchant by Kim Kavin
***Source: Fund factsheet, 30 April 2019
^Source: Pet Food Politics: The Chihuahua in the Coal Mine by Marion Nestle
^^Source: Nestle 2018 Annual report