The global pet care market value is expected to hit $269bn by 2025, and the US pet care market is forecast to grow at 3-5% and is valued at $48bn. The increasing rate of humanisation of pets has resulted in retailers developing strategies for consumers seeking to treat their pets and providing the necessary pet care products.
Number of U.S. households that own a pet, by type of animal (m)
Source: American Pet Products Association’s 2019-2020 National Pet Owners Survey.
Since 1988, there has been a 64% increase in pet ownership, driven by ageing boomers and younger generations. The increasing rate of humanisation of pets, coupled with the hectic schedule of pet owners, has resulted in growing demand for pet health and wellness services. 86% of pet owners include their pets in holiday celebrations, 67% take their pet on holiday with them, and 56% sleep with their pet.
Total U.S. Pet Industry Expenditures, 2002-2019 ($bn)
- Includes food, supplies and over-the-counter medicine, veterinary care, live animal purchases and grooming and boarding.
- Estimate. Source: American Pet Products Association’s 2019-2020 National Pet Owners Survey.
There has been a steady increase in pet expenditure over the past two decades, and the growth of expenditure is largely unaffected by economic recession. During the last recession, veterinary practice revenue was flat to 1% down compared with most other industries, which were down by 10% to 50%, and 76% of pet owners reported their pet spending is not influenced by the economy
“Since 1988, there has been a 64% increase in pet ownership, driven by ageing boomers and younger generations.”
Destination Pet has differentiated itself in this large market by offering a “HUB approach” to the animal care market with a portfolio of services addressing the large unmet need for pets, “pet parents”, and veterinarians. These services are positioned to “own the pet” by offering medical care, day care, grooming, training, and boarding as an integrated offering.
Expected total global pet care market value by 2025
L1’s acquisition enables Destination Pet to strengthen and grow its service platform in the US and expand into the European market. L1 aims to be a global leader in pet health and wellness services and will commit up to $450m overall to invest in this sector.
“This investment, coupled with a targeted acquisition strategy, enables the company to accelerate its growth trajectory and continue to expand its footprint, extending Destination Pet’s reach with the ultimate goal of providing better care to pets and a better customer experience for its existing and potential new customers.”
“As an international investment firm with deep knowledge of diverse markets and patient long-term capital, L1 is well positioned to bring this model to additional markets. Destination Pet offers an engine of experience and transferable assets to expand into Europe, with a platform on which to scale,” added Ivan Zhivago – Partner of L1 Health.
What are the first steps L1 is taking at Destination Pet?
L1 is now working closely with Shane Kelly and the Destination Pet management team to enhance the core platform so that Destination Pet is scalable and supports a robust pipeline of acquisitions.
We have established a strong international Board to supervise the execution of the strategy. In addition to Shane and the L1 Health deal team, Rolf Classon has joined the Board. Rolf was running the Bayer Animal Health division and is an experienced Board member.
Mike McArthur has joined the company as the Chief Financial Officer to strengthen strategic finance and corporate development functions. Additionally, Matt Dobbs has joined the company as the Chief Medical Officer. Matt is a respected veterinary and serial entrepreneur who built and sold two vet platforms in the UK and will bring perspective and experience from the fastest consolidated market in the EU.