Hi, it's West Kasova. We're taking a break this week for the holidays, so here's an episode you might have missed. Hey Vicky, you have two sons and two dogs, so here's a question which of them is more expensive.
The dog's food is crazy expensive, but the boys are growing, so I feed them sometimes too.
From Bloomberg News and iHeartRadio, it's the Big Take. I'm West Kasova today. How much are you spending on your pet? When the conversation turns to pets, and at some point it just always does. After the phones come out and the photos are pat around my.
Animals and send them to you all.
Oh my god, how cute.
It's only a matter of time before it's all about how much the care and upkeep of dogs and cats costs. That's exactly what happened when the Big Take crew was putting together this episode.
My cat's son, Sylvie, costs a lot. When it comes to diet. He's on a prescription diet because he is allergic to everything, and that food went up fourteen dollars over the last ten months or so, so it used to be seventy seven now it's ninety one dollars.
Ninety one dollars Catherine for food.
Yep, and that might sound bad already, but something to know about Sylvie is that he of course hates his prescription food. So I spent about twenty dollars a month extra buying things to sort of doctor up the bowl, like treats, beef toppings. We're trying a new beef broth this week.
Funnily, I know Catherine, my cat too has a broth obsession. So Wednesday is my cat. She's a Persian cat. She has the classic grumpy flat face. Basically, I have to give her this thing called lysing. It's like an immune support. So what I do is I take a little scoop of liceing and I mix it into the broth. And the broths are not cheap. It's a liquid and it has solids. She doesn't eat the solids, and I know that's what keeps the cost up.
Wow, I lucked out. I have a three legged rescue dog named Igy. She's a little angel. She's not picky at all food wise. She'll eat whatever you put in front of her. But that has also gotten us into trouble because somehow, three legged or not, she managed to get up on the counter while we were gone one day and I had just bought a bag of currants to try on my oatmeal. I was excited. I was like, dried food on the oatmeal.
Loo, let me go.
And we come back home from dinner, my partner and I and lo and behold there are currents spread across the couch. She ate the whole bag. It's roughly a cup. First we're like, oh haha, how quirky.
Then we call.
There's apparently a pet poison hotline, so right there, seventy five right off the bat. So you get on the phone and the person goes, okay, there are two options here. One totally harmless, totally fine, option two. Three of them will poison her. So then we had to go to the emergency Vet, which, up front, I think I had to put something like twenty five hundred dollars on my card for them to even do anything. Luckily ended up only being thirteen hundred, so a bargain.
Yeah, I will say, I've also had my poor pop astro who ate something. We still don't know what it was, but yeah, trip to the emergency Vet and you know, stomach X rays and everything out the gate. It was a good fifteen hundred at least, and I did have pet insurance so that covered some of it, but that pet insurance does not cover the three hundred dollars a year bill just to get a wellness check. When I adopted my dog Astro, it was required by the adoption
agency that I get pet insurance for him. So it started off thirty five bucks a month, but then he had that whole issue where he ate something we weren't sure what it was. After that, the monthly premium went way up and it's almost double, So it's great if you don't need it.
Okay, what's the strangest pet expense you've come across.
My best friend has an exotic short hair cat named Pistachio Muffin, and he, much like my beloved persian Wednesday, has a flat face. One vet said that he had never seen nostrils on a cat so small, and those small nostrils led to breathing issues, respiratory issues, and it was just a bad time for little Pistachio. So the vet suggested, you can get the nostrils widened. There are surgeons that will do this a cat nose job, a
cat knows job. Of course, the only surgeon was on the upper east side, and for this nostril widening surgery it was twelve hundred dollars.
So, given how much all of your dogs and cats are draining your bank accounts, do you have any regrets? Would you give them up? Would you not get them if you knew what you were in for?
Never?
They bring me so much joy it's worth every cent.
I used to think that the amount of money people spent on their pets was absurd until I adopted Wednesday, and now I will gladly go into massive debt to keep her happy and healthy.
Before adopting I GI, my partner and I sat down and had a budgeting conversation and we kind of thought we had an idea of what it would be and what our backup plan was should the worst happen. And then the Currents happened and we were like, oh, now we get it, but no, wouldn't give her up, would keep her in a heartbeat. I will just never buy Currents again.
I die for so hands down.
Reporters Knako Katan and Brendan Case wondered, if each of us is spending so much on our pet, how much are we all spending? They set out to put a number on what they call the global pet economy.
So the worldwide pet economy right now is well north of three hundred billion dollars, and the next seven years are going to be a big story about growth. Bloomberg Intelligence is predicting that number is going to get up to about half a trillion dollars, very close to five hundred billion dollars. And you've got the US that is accounting for not quite half, but almost half of the total.
But you've also got growth in Europe, and you've got the fastest growth in the rest of the world, particularly emerging markets. And so you've got a global trend with certainly more pets because of the pandemic, and especially in the US, there is an uptick in the population. And for each pet, you've got rising average spending because of this new collection of services, healthcare and premium products that pet owners can buy.
Now.
I remember when I was a kid. Of course people had pets, but they weren't taking them to the doctor for MRIs and doing a lot of these really intensive medical treatments, buying them fancy gourmet food. When did all this start to become a really big thing.
It's been growing rapidly for a long time. It was recession proof during two thousand and seven, eight and nine. It was continuing to grow through that. But then I think maybe in the last ten or thirteen years is when the drug companies that we interviewed started to notice this is huge. We have this great anecdote from Zoetis, which is the largest pet healthcare company, saying that their animal livestock portion of their pet business used to be
sixty four percent and the rest was pets. In the past ten years, that has completely flipped to the exact opposite.
And why is that? Why are people now just spending more on their pets than they did before.
You just see pets becoming part of the household. They're treated as one of the family more and more. Then you have the pandemic where there was just a huge uptick in pet adoptions, and then add sort of the lifestyle of the youngest generations Gen Z and millennials that are also kind of contributing to more spending, and they admit they're spending more on their pets than ever before, just you know, before maybe starting families.
That's a really big part of the story. You know, you get gen z, you get millennials, and statistically they're starting families a little later, and if you look at the surveys, they're the ones who are out there saying much more than other generations that you know, yes, pets are very much part of the family. They buy into the whole sort of trend towards humanization, and they are willing to spend pretty heavily on their cats and dogs and other pets.
Brandon, you mentioned earlier that in the US especially, there was this uptick in people getting pets during the pandemic. How big an increase was it.
The increase in pet ownership was one of the big stories in the early stages of the pandemic. And what you end up with three years down the line is that Morgan Stanley estimates that there are about five million more pets in the US as of the middle of last year compared with twenty nineteen. That's an increase of about four percent. So you've got a rising population of companion animals. But it's not just that, it's also rising
spending on each pet. So to give you an idea of the numbers, the Labor Department calculates that household pets spending went up about thirteen percent as of twenty twenty one from two twenty nineteen. That thirteen percent increase is not quite twice the average rate of inflation during that period,
but it's close. And so if you drill down into dollar terms, what you see is that according to Bloomberg Intelligence, it costs about fifteen hundred dollars to own a dog that's per year in the US, and it costs close to one thousand dollars to own a cat.
So those numbers, maybe, on average they're right, but everyone we spoke with for this article, and everyone I know, spends more than that. So for example, we spoke with one woman, Susan Genteel. She's a public school teacher who spent about eight thousand dollars or more on her dog, Elvis, because sadly, he had a heart condition. She was spending on echo cardiograms, she was spending on hyperbaric chambers. You know, she's spending a lot of money to keep her dog healthy.
This is another part of what's really taking pet ownership into the next level, you know, the next boom, which is the cost of health care, the cost of vet services, the fact that a lot of the medicine innovation that you're seeing in the human health sector are transferring into the animal health sector more.
With Brendan and Naka when we come back. Knaka, before the break, you were talking about how more and more expensive medical procedures for pets are becoming the norm. Now, what are some of these procedures that people are having done on their animals that they just didn't do in past years.
I mentioned echo cardiograms. There are also a ton of innovative medicines that have just been approved for these sort of big pharma companies. They sort of have their roots in big pharma, and then some of them spun off and became just focused on pets. So you could be treated for osteoarthritis using monoclonal antibodies, which was used, for example, to fight COVID. And then there are top line diabetes
drugs that you can find now used for pets. And in the case that we spoke with a woman whose dog had a heart condition, she was telling us that she used the same medication for her dog, Elvis, that her father took, so she would give half a pill to Elvis and her dad would take a full pill.
It's not just medicine. It's also a lot more scans like the electrocardiogram I was talking about. Another example is an MRI. One of the people we talked to said that, you know, time was maybe ten, fifteen, twenty years ago. If you lived near a sort of a teaching hospital veterinary medicine, then yeah, you could probably get an MRI, but not many people did. Now that's a service that
you can essentially walk in and get. The downside is that it's going to set you back, you know, two thousand dollars or more.
What would it happen to a dog like Elvis five years ago, ten years ago? Was there any kind of treatment like this, let alone the kind of diagnostics that are very common for pets these days, you know.
For a dog like Elvis and for a lot of pets out there, the sad answer is probably they would have died earlier. And I think that you have elements of some people being more willing to spend a lot on advanced treatments. You also have a situation where these advanced treatments are out there, and yes, the providers do want to use the expensive equipment to provide the best service.
They can't if you talk with some vets, I think that one lesson you come away with is that they, you know, they do have the issue of affordability in mind. It's something that they struggle with as well. But the fact remains that there certainly are people out there, you know, pet owners who are demanding those services. And so you've got the veterinary medicine industry that is, you know, adjusting to provide them and take advantage of a lot of the technology that they can bring to bear.
And there are lots of surveys about just how close families feel to their pets. Above ninety percent feel that their pets are part of their family or one of their children. Almost above eighty percent, eighty five percent or so say they would spend any amount of money to care for their pets no matter what. And I think that was one of the most surprising things you mentioned, Wes, is just how much people are willing to spend, and with the available services and diagnostics and drugs out there,
they can do that now. And it's interesting what I also found a lot of times people almost underestimate how much they've spent, and when you ask them to itemize it, it's a lot higher than they expected.
Yeah, well, you know, Elvis himself had a nine hundred dollars electrocardiogram. An MRI goes for two thousand dollars or more. And that's according to a group called the Pet Fund that exists to try to help people pay for care that they can't afford on their own. And if you talk with them, they say that it used to be once in a blue mood, you would see a ten thousand dollars price tag for total care of an animal having a serious health problem. That we're told is becoming
increasingly common. And in fact, the people running the Pet Fund have seen bills that range as high as twenty thousand or thirty thousand.
Right, we have in our story the largest insurance claim was it fifty thousand dollars for a dog that was run over in Brooklyn.
And you mentioned insurance, which is another big component in this is that a lot of people, in order to pay for this, or in anticipation of having an illness that could cost a lot of money, are buying insurance. How does that work? How does pet insurance work?
So there's you know, an annual premium and then the deductibles and then the out of pocket, and we actually have Bloomberg Intelligence doing some of the math coming up with an average number. So if a cancer treatment can cost eight thousand or ten thousand dollars, at the end of the year, the total expenses under insurance can be maybe twenty seven hundred. But there are a lot of people who do say that the premiums are very high.
In Susan Gentiel's case, she said that her dog was too old at the point where she wants to get insurance, so it was too expensive. And in general, I think you know, the entire market is about three percent of pets are insured, so that actually opens things up for huge growth in that sector.
So the thing about pet insurance is that you do want to go in with your eyes open. This is an industry that's bringing in about two point six billion dollars in annual premiums right now. That's up from a billion dollars in twenty seventeen. But if you look at the numbers, you know, it really depends on the individual
case whether it's worth it. You know, the average for a dog if you want accident and illness coverage is almost six hundred dollars, and there are some people out there who say, you know, better to take that money, set it aside for future care for the animal and just pay with cash. Others obviously are deciding that they do want the coverage, but it'll come with a pretty high deductible and so they'll still have to pay out of pocket a fairly significant amount.
Are we already starting to see elective procedures for pets, you know, cosmetic surgery, things that aren't purely medical but are just done to, I don't know, make your dog look better.
Certainly, there's a lot of gray area, first of all. And then there is the world of what you might call plastic surgery for animals. It's kind of a famous example, which are called neuticles. These are testicular implants for dogs that you can buy if you have your dog neutered, but you kind of want to have them keep the pre operation. Look, there's a market for this, okay, and a pretty good one apparently. You know, this is a company that seems to be doing okay for itself. There's
a famous example the actor Jake Jillenhall. He was on The Tonight Show and he said that he got a pair of neuticles for his German shepherd.
You should get nuticles.
Do you know what those are?
I must know.
I could guess maybe.
But they're prosthetic testicles. Anyway, long story short, he has nuticles.
This is not elective surgery, but it's in the realm of psychological costs. We found a lot of owners I spoke with put their pets on doggy Prozact because they had behavioral issues, anxiety, a lot of anxiety, and neighbors filed complaints. You know, some pretty difficult experiences that pet owners say is not talked about a lot. And so they had to put their dogs on prozac or put them into day care training, and so those costs can rise to almost as much as you know, a heart condition.
We'll be right back gn We've been talking about how pet ownership and the amount of money people spend on their pets are going up. But there's also the opposite happening, which is a lot more people, especially who got a pet during the pandemic, are trying to return them or finding new homes because they just can't keep up.
Yeah, you are starting to see that, and what you see in the data such as it is because again, you know, the data here is not quite as clean as with human activities. But if you look at numbers compiled by a group called Shelter Animals Count, you're certainly seeing an uptick in most states in what what are called pet surrenders compared with the early days of the pandemic.
There's an important caveat there, though, which is that by and large those numbers are lower than they were in twenty nineteen, and so it's not quite right yet, at least to say that there's a bunch of people who ran out and got pets during the pandemic and now they just can't deal with them. Certainly, that description fits
the case of some people. For many others, you know, I think that they're, you know, at least compared with pre pandemic levels, seem able to keep their pets at home and seem happy.
And I think actually that's a really clear sign that pet owners are willing to go very far to keep their pets, even if for whatever reason it was, they might want to rehome their pets. You might have the numbers taking up from the start of the pandemic, but we're still not at twenty nineteen levels. You know, that trend toward humanization and doing whatever you can to make sure your pet is healthy and happy and stays with you.
That I think will continue, and that's perhaps where this market will continue to head towards the half trillion target.
That's right. In the short term, there is a bit of a question mark just from the economy. There's obviously a lot of economic uncertainty out there, and it is the case that when the economy worsens, there are more people who look to rehome their pets. Whether the economy will worsen to that extent, whether people will react with the same historical pattern, all that remains to be seen. But it's a big question mark. As we go through the rest of this year.
We hear from the drug company saying that costs spent on healthcare are sticky, right, They're very recession resilient, and so people would decide to lower their costs in some other area a cheaper car or fewer clothes sooner than actually taking away bending on a pet.
As you're reporting on this boom industry that, as you describe, is only going to get bigger and bigger, what are you looking for? What are the trends down the road that you're keeping your eye on.
I'm interested in how human health is trickling down into pet health, especially because it takes a lot shorter to go through the approval process FDA approval process to get a new drug for a pet, and so eventually we might see innovation first hitting the pet market before the human market.
Yeah, there's a lot of research out there on dog aging for a number of reasons, one of which is that dogs have shorter lifespans, and so a human researcher can track multiple generations of dogs over the course of a career. There's something called the Dog Aging Project, which is based out of the University of Washington and Texas A and M University. It's got forty four thousand dogs enrolled, where the dog owners fill out questionnaires keep track of
their pets health and behavior. The hope is that over time they start to generate insights into how dogs age, which genes age the best. It's even conceivable that there could be some insights from that project coming into human health, and you know, there's startups out there with plans to do something similar. You could see a number of so called anti aging drugs on the market within three four
years potentially, So that's definitely one thing to watch. Another thing that I keep my eye on is whether the assumption that people will keep accepting higher prices in fact turns out to be right. There's a lot of money behind these industries, right Like Mars Incorporated, the candy bar Company is one of the big investors in veterinary services. And the bet there is that humanization trend rising incomes
greater supply of pricier options for pet care. You know, the bet is that those will all come and give this very robust annual average growth over the next five, seven, ten years. But there's a lot that could go wrong too, you know. It could be that people you know, just can't hack it, particularly in the middle or lower income levels. Could be that demand isn't quite where they're expecting it
to be. But right now, the people putting money at risk here definitely expecting these numbers to keep rising pretty quickly in terms of spending.
And I think it's important for our listeners to know your bias dog or cat.
Cat. My wife and my kids know that more of a cat person, but we do have two cats and two dogs. Our house is a bit of a zoo and we love them all.
And Naka I grew up with a dog and it would have to be dog again.
Knahok, Tan, Brendan Case, thanks so much for coming on the show.
Thank you so much for having us, Thanks.
For having us.
Thanks to Rebecca Shasson, Katherine Fink, Sam Gebauer, and Vicky Ergolina for sharing their cat and dog stories. And thanks to you for listening to us. Here The Big Take. It's a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen, and we'd love to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of The Big Take is
Vicky Ergalina. Our senior producer is Katherine Fink. Our producer is Rebecca Shasson. Our associate producer is Sam Gobauer. Philde Garcia is our engineer. Our original music was composed by Leo Sidrin. I'm Weskasova. We'll be back on Monday with another Big Take. Have a great weekend.