How the pet industry is mobilising billions

Pacemakers for dogs, brain surgeries and hip replacement – pets in 2025 may find these normal as veterinary services have gone through significant development in recent years, offering increasingly premium care, mirroring the treatment given to their human companions.

This trend, hand in hand with a recent jump in pet numbers (and a forecasted skyrocketing of meat production), heralds a boom in the veterinary healthcare market for the next decade, driving investment in scientific medical training, equipment and facilities such as clinics.

How pets became a long-tail investment

Pet ownership soared during the COVID pandemic, with research by US bank Morgan Stanley showing that the number of pets in the US alone rose at least by 5 million between 2019 and 2022.

The bank forecasts a 14% increase in pet ownership by 2030 in the US alone and a similar pattern has been seen in Europe.

And even though the cost of living has risen significantly in the past few years, spending on pets’ needs, including premium and personalised pet food, accessories, as well as pet healthcare services, has soared.

“We’re seeing that people are really willing and quite focused on their pets’ healthcare, and sometimes even spending more on their pet’s healthcare than their own healthcare,” said Junko Sheehan, CEO and founder of European veterinary chain UNAVETS about her experience in Europe. “They’d rather take their dog or cat to the vet and they will forego money on a nicer vacation or they will forgo on their own checkup.”

The pet industry’s resistance to economic crises shows that benefits to the industry likely have a long tail, according to analysts. That’s not just a pun: in business, a ‘long tail’ strategy means making huge profits by selling hard-to-find, enduring products in small quantities to a wide consumer base, instead of selling large quantities of a few common products.

“On the whole, the pet category remains an attractive and defensive investment across both food and products, as well as vets, insurance and other services, making investment in the pet sector relatively low-risk,” said Simeon Gutman, equity analyst at Morgan Stanley.

Where the investment opportunities are in Europe

There are approximately 340 million pets in Europe, and its vet market is valued at around $40bn (€38.5bn) making it the second-largest in the world.

It is expected to grow by 6.4% until 2027, according to a 2022 study from market research company Renub Research.

On a country-by-country basis, the biggest markets are in the UK and Spain, the latter offering 6,000 practices and veterinary hospitals and clinics. Germany, France and Italy are also big markets.

While the vet market is largely dominated by a few big players in the US and the UK, continental Europe is still in the early stages of consolidation and the market remains highly fragmented.

“When you look at what percentage is owned by a group, that percentage is still really low,” said Sheehan. “And I think that’s where the opportunity for investors exists.”

From pacemaker to hip replacement: What is new in the vet industry?

The veterinary healthcare industry is likely to boom in the next decade, thanks to a combination of increased animal welfare knowledge, the growing prevalence of animal diseases, and the increase in preventative care driven by the vaccine sector.

A report from The Business Research Company forecasts 7.1% annual growth for the global vet market in 2024, reaching a value of $148.77bn (€143.37bn).

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“You can do everything from a pacemaker for a dog, to a hip replacement… we’re seeing brain surgeries, tumours removed,“ said Sheehan. “And even up to chemotherapy, for example, with cancer in dogs and cats, whereas maybe in the past you would have euthanised your pet and that would have been the next option.”

As the industry increasingly incorporates technology, with regular use of equipment like CTs and MRIs, prices are expected to rise. There is also “a global vet shortage,” said Sheehan.

Meanwhile, specialisation in veterinarianism is playing an increasingly important role, with vets becoming evermore specialised in the various fields of healthcare.

“We have neurosurgery, oncology, cardiology, we have dermatology, orthopaedics and internal medicine,” Sheehan noted.

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The pet insurance market is also expected to face rapid growth, according to Morgan Stanley, highlighting that the industry recorded 26% in annual growth between 2017 and 2021 in the US alone.

In Europe, the market is smaller but growing fast: it was worth $3.2bn (€3.08bn) in 2021 and is projected to grow by 9.2% annually and swell to $6bn (€5.78bn) by 2028, according to a report by Blue Weave Consulting.

Another report by Market Data Forecast estimates the current European market size to be just shy of $1bn (€960m) but expects that it will grow by more than 12% annually until 2028.

“If there is a specialist required or a CT scan or an MRI, which can be quite extensive, pet owners feel more comfortable doing that through insurance,” said Sheehan. “So I’m expecting that insurance will continue to be a driver, a leading indicator, of how we’re going to see the level of pet healthcare continue to evolve.”

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