Pet Care Market Update – March 2025

Pet Care Market Tailwinds Remain Strong, Private Equity Add-Ons Bolster M&A Activity

Capstone Partners released its latest Pet Care Market Update, reporting that despite moderated merger and acquisition (M&A) activity in the Pet Care market, demand drivers have remained healthy. Pet spending saw sustainable growth during 2024 as the sector continued to normalize following the pandemic-related boom in pet ownership. Shifting consumer preferences have created ample opportunity for sector participants to capture growth in the new year.

Pet owners have remained passionate in the U.S., leading to steady growth in spending on pet products, services, and consumables. Expenditures on Pet & Related Products and Veterinary & Other Services increased 1.9% and 4.8% year-over-year (YOY) in Q4 2024, according to the Bureau of Economic Analysis. Growth has decelerated slightly, landing at more sustainable rates compared to 2023 figures, providing evidence that Pet sector spending has normalized following the pandemic-related boom in pet adoptions. Online channels have continued to see above market sales growth in pet products. Online pet food and pet supply sales in the U.S. rose 2.6% YOY to $28.5 billion in 2024 and saw a compound annual growth rate (CAGR) of 12.8% between 2019 and 2024, according to IBISWorld. Volume has upheld sales growth across channels amid decelerating pricing, but select segments, such as Pet Food, have seen some consumers move up market for ultra-premium priced products while others have traded down slightly from the super-premium level. Differentiated product offerings and heavy digital spend have defined outperformers in the increasingly competitive market. Companies with strong innovation pipelines and product creativity are expected to see sector-leading valuations through 2025.

Also included in this report:

• A detailed trends analysis on the Pet Food, Supplements, and Services segments.
• A breakdown on the types of buyers targeting Pet Care market participants, leading to competitive sale processes for best-in-class operators.
• Four notable transaction highlights, including the Capstone-advised sale of Ultra Pet to Oil-Dri Corporation of America (NYSE:ODC).

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized Pet Care businesses that serve growing end-markets. For more information on the Pet Care market trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, contact us today to start a conversation.