How pets quietly became a $158 billion industry.
Americans now spend more on their dogs and cats than they do on Christmas and Halloween combined. They spend more on them than they do on the toy industry. More than on candy. More than on recorded music and the box office stacked end to end. Somewhere between the financial crisis and the second year of the pandemic, the pet economy quietly slipped past a few hundred billion-dollar industries without anyone really noticing, and is now charging through the rest of the consumer landscape with the calm confidence of a Labrador headed for the door.
It did not used to be this way. Three decades ago, the entire American pet industry — food, vets, grooming, leashes, fish tanks, the whole catalog — was a $17 billion rounding error in the consumer economy. Today, by the American Pet Products Association’s latest count, it is a $158 billion sector, growing faster than household income, retail at large, and most categories on a CPG executive’s slide deck.
The story of how that happened is part demographic, part emotional, part pandemic, and part a very specific kind of premium-ification: the slow, decade-long process of an animal becoming a family member, and a family member, eventually, becoming a customer.
The line that wouldn’t stop climbing.
In 1994, the US pet industry was worth about $17 billion. Here is what it became.
US pet industry, total spending
Scroll past, and three decades of American pet spending unfurls.
The line bends sharply twice. The first bend is around 2008, when pet owners — even in a recession — kept buying premium food, treating vet care as non-discretionary, and quietly revealing the category’s recession-resistance. The second, and far more dramatic, bend is 2020. Between 2019 and 2021, total spending jumped from $97 billion to $123 billion, a roughly 27% lift in twenty-four months. People did not just buy more pets during the pandemic. They permanently raised the floor on what they spend per pet.
Where the money goes.
Food is still the biggest slice — and that includes a quietly enormous shift toward fresh, refrigerated, and premium kibble. But the more interesting category is vet care, now nearly $40 billion on its own, growing faster than any other slice on the pandemic-era curve. Pet pharma, diagnostics, and dental have turned into proper public companies, and pet insurance — barely a footnote a decade ago — crossed $4.7 billion in premiums in 2024.
Then there is the smallest slice, services: grooming, walking, boarding, doggy daycare. It is only $13 billion, but it is also growing the fastest of any category — a tell that the industry’s next decade looks less like a CPG market and more like a hospitality one.
Where the $152 billion goes
Food still leads, but services — grooming, walking, boarding — are the fastest growing slice.
“If pet care were a country, its GDP would rank around 60th in the world — ahead of Bulgaria, behind New Zealand.”
The generation gap pulling the line up.
The pet boom is not happening evenly across America. Millennials are now the largest generational block of pet owners — about a third of all pet-owning households — and they tend to keep more than one animal at a time. Gen X is steady. Boomers are slowly declining as long-time owners age out. The story underneath the numbers, though, is Gen Z. They look like the smallest slice now, but their household pet ownership grew by 43.5% in 2024 alone, the kind of single-year change you usually see in consumer subscriptions, not in living-room-altering decisions about adopting a dog.
Who owns America’s pets, by generation
Gen Z owns the smallest slice today — but their household ownership jumped +43.5% in 2024 alone.
$150 billion, in plain English.
A number like $158 billion is abstract enough that it slides through the brain without touching the sides. So here is what $150 billion buys, per year, in the rest of the American consumer economy.
$150B alongside the rest of consumer America
Pets outspend candy, toys, and the box office combined — and almost double the recorded music and video game markets put together.
You can stack the candy industry, the toy industry, and the entire US box office on top of each other and they still do not reach the pet line. Even music and video games combined are roughly half of it.
A quiet wedge: pet tech.
Hiding inside the $158 billion is a category that did not exist a decade ago: internet-connected hardware for dogs and cats. GPS smart collars, LTE-tracked harnesses, activity rings, sleep monitors, smart feeders, automatic litter boxes, telehealth subscriptions — a wearable-plus-software stack that more or less ports the consumer iPhone model onto a Labrador.
The most polished of those products is Fi, a New York-based startup whose LTE GPS collar pairs an iPhone-grade industrial design with multi-week battery life, escape-zone alerts, and activity rings that compare your dog against the rest of its breed. (Disclosure: I’m an investor.) It is the rare consumer hardware company that the pet category has produced — one that takes the idea of an animal as a member of the household seriously enough to build the software for it. Pet tech is still a rounding error against pet food, but it is the wedge that turns ordinary pet owners into premiumpet owners — the customers who don’t blink at $300 collars, $90/month insurance, and $14/lb fresh-frozen food.
So what.
The pet industry’s rise is one of those quiet macroeconomic facts that, once you see it, restructures a lot of other stories. The decline of traditional toy spending, the quiet boom in suburban veterinary chains, the rise of refrigerated food shelves at Costco, the entire pet-insurance category — all of it traces back to the same emotional reframe: dogs and cats stopped being household fixtures and became members of the household budget.
The next decade looks denser than the last. Pet pharma is consolidating. Insurance penetration in the US is still only about 5% of dogs and 2% of cats, suggesting roughly a decade of compounding ahead. Premium food and fresh food are eating into mainstream kibble. Services — grooming, walking, boarding, telehealth — are turning into franchised, venture-backed businesses. And Gen Z, the group most likely to live alone and most likely to have two pets, is just entering its peak spending years.
The market that surprised everyone by reaching $158 billion is, on every available curve, still accelerating. The Labrador has barely reached the door.