What’s the secret behind the boom in pet spending? Mostly, it’s preventative care
The millennial generation (loosely, and depending who you ask, everyone born between 1981 and 1996) is taking care of its pets better than any generation that precedes it. As this generation has come into adulthood, that’s had a dramatic impact on pet spending, which has shot through the roof. Where is that money going? Overwhelmingly, the answer is: preventative care. For Idexx Laboratories, a company that specialises in early diagnostic tools for “animal companions” that’s incredibly good news.
Idexx Laboratories’ share price has climbed steadily this year: +35% so far
Source: Yahoo Finance
The common wisdom around millennials and their pets is that the latter are a stand-in for children. There’s some convincing evidence for this belief, as millennials are starting families far later than their parents’ generations. 21% of millennials are married – by the same age, 42% of baby boomers (born between 1946 and 1964) had walked down the aisle. And, in the developed world at least, millennials are having far fewer children than any other generation in history. All across Europe, fertility levels (a measurement of the number of healthy babies the average adult woman will have during her lifetime) has fallen to the point where populations are declining. Could pets be the millennial answer to children? The way many of them talk about their “fur babies” it certainly looks that way.
However, millennials are different from their parents in other ways too. For one thing, millennials are far and away the most educated generation to have ever lived. In the US, almost half of millennials (47%) hold a college degree. Meanwhile, not even 30% of baby boomers (28.8%) do. Millennials also have access to Google, smart phones, email, streaming services… in short, all the fruits of the digital tree that blossomed in their lifetimes. The end result of all this is that millennials are far more informed and far better connected than their predecessors were. They’ve been encouraged to think about ethics from a young age, and can see all manner of horrific animal cruelty on YouTube or Facebook.
For those reasons, it’s probably not the case that having kids would see millennial families kick the pooch back outside to live in the garden. Some of their most-loved internet celebrities are animals (RIP the legendary Grumpy Cat, who died the week before last at 7 years of age, sending digital denizens into a fit of mourning). There is clearly a wider trend in play, that’s seeing animal rights discussed prominently, big game hunting disparaged, swathes of young people turn to plant-based diets, and – yes – younger adults buying the kind of preventative medical treatment for their cats and dogs that was once reserved for grandma.
All that’s great news for animals and animal lovers. It’s also great news for the companies that make these medical treatments and the people that invest in them.
Dominion holds Idexx Laboratories in its Global Trends Luxury Fund. Share price as-at 23 May 2019.
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