Companion Animal Health Market

Market Overview

The global companion animal health market size was worth USD 21.12 billion in 2022. It is estimated to reach an expected value of USD 45.01 billion by 2031, growing at a CAGR of 9.1% over the forecast period (2023–2031). The growing number of individuals who own pets is driving the growth in the adoption of companion animals, which is expected to drive the companion animal health market over the forecast period.

Regular monitoring of companion animals' health is conducted to discover illnesses and disorders that may threaten their lives if not treated promptly. It encompasses the creation of genomic diagnostics, digital technologies, anti-neoplastic medicines, therapeutic vaccinations, and monoclonal antibody therapy. The number of pet owners who consistently seek veterinary care and are knowledgeable about companion animals' general health and welfare has significantly increased in recent years.

Companion animal health entails the systematic surveillance of the well-being of companion animals to identify diseases and other ailments that, if not addressed, could jeopardize their lives. The field includes the advancement of monoclonal antibody treatments, therapeutic vaccinations, anti-cancer medications, genomic diagnostics, and digital technology. Currently, there is a substantial increase in the global population of pet owners who are knowledgeable about their pets' overall health and welfare and regularly seek veterinarian care.

Market Dynamics

Market Drivers

Growing Companion Ownership

The rising number of pet owners is boosting the adoption of companion animals. This is expected to fuel the market growth during the forecast period. In 2018, almost 57% of homes in the United States had at least one pet. Pet owners are apprehensive about the well-being of their animals. Therefore, there is an increasing need for effective treatment. Moreover, the majority of pet expenditure in the United States is attributed to dogs and cats. The pet sector in the U.S. spent a total of USD 75.38 billion in 2019, as reported by APPA.

Furthermore, increasing demand for effective animal care is boosting the need for veterinary surgeries. For instance, according to an AVMA report, pet owners in the U.S. spent ~USD 15.42 billion on veterinary surgeries in 2017. In addition, the rising number of veterinary hospitals and pet care clinics is contributing to the market growth. According to a report by AVMA, the number of veterinarians in the U.S. is expected to increase by 12% from 2012 to 2022. Moreover, various sports and activities are organized for pets worldwide, especially in the U.S., thereby increasing the risks of injuries.

Increasing Prevalence of Zoonotic Diseases

Zoonotic diseases are classified as bacterial diseases (brucellosis, tuberculosis, and anthrax), viral diseases (yellow fever, HIV infection, rabies, and measles), and parasitic diseases (toxoplasmosis, cysticercosis, and leishmaniasis). The risk of zoonotic infections spreading through mosquitoes, ticks and fleas, or animal contact is high. Zoonotic infections cause diseases such as rabies and Lyme disease. In the upcoming years, it is anticipated that this will lead to a rise in the creation of reference labs to enhance animal health. The World Health Organization is involved in several cross-sectoral initiatives to address health risks at the interface of humans, animals, and ecosystems. Some health risks include developing zoonoses, antibiotic resistance, and food-borne zoonoses.

Additionally, many WHO departments are making various national, regional, and worldwide initiatives. FAO engages closely with other partners, including the World Bank, the World Organization for Animal Health (OIE), national ministries of health, and the United Nations System Influenza Coordination (UNSIC). The primary objective of the National Center for Emerging and Zoonotic Infectious Diseases (NCEZID) is to prevent, monitor, detect, and control the spread of infectious disease outbreaks within the United States and globally. Such factors propel market growth.

Market Restraint

Lack of Standardization

The lack of streamlined national regulatory processes is one of the critical growth-restricting factors. Streamlining is highly necessary for vaccines, which have high market growth potential. Lack of transparency and broader inefficiency in procuring vaccines may negatively impact the overall growth. Thus, there is a high need for harmonizing and standardizing regulations about animal health in different countries. This is believed to be one of the major barriers to a more efficient animal health sector globally.

In emerging economies, a lack of efficient transportation facilities, refrigerated spaces, or networks of laboratories may restrain market growth by creating a wide gap between supply and demand. Moreover, the lack of proper infrastructure or regulations in animal markets in emerging nations negatively influences the animal trade globally, thus restraining the growth even further.

Market Opportunities

Rapid Technological Advancements

Technological advancements in veterinary healthcare drive the market, which is anticipated to offer growth opportunities. These advancements include information management systems, animal owner mobile technology, and vaccine banks. A high focus on innovation in animal health is expected to fuel the market growth prospects. For instance, fitness trackers for four-legged friends could be transformative for pet care. Their ability to detect health issues in pets earlier could expose any problems the animal cannot communicate with themselves. Thus, technology has made caring for and interacting with companion animals easier and better than ever.

Additionally, the development of veterinary health information systems, particularly in developed nations, is anticipated to fuel market expansion in the coming years. Data collected at veterinary clinics can be uploaded online and shared with other academics and physicians using the abovementioned systems. This technology will make it easier to examine changes in disease prevalence in real time. Moreover, vet-owner mobile technology communication will gain significant importance with increasing companion ownership globally. This enables real-time communication that reminds owners of "due dates of vaccinations," the type of vaccines to be administered, medication refills, and dietary information.

Regional Analysis

Region-wise, the global market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe is the most significant global companion animal health market shareholder and is expected to exhibit a CAGR of 8.9% during the forecast period. The region is anticipated to witness consistent growth over the forecast period due to the large production of animal products and the growing companion animal population. Moreover, rising collaborations between healthcare organizations to promote awareness about chronic diseases and easy availability of treatment facilities are among the factors responsible for the significant share held by Europe in the companion animal health market.

Furthermore, market players are adopting various strategies to maintain their position in the market, thus supporting overall market growth. For instance, in February 2021, Zoetis obtained European Commission approval for its product— Solensia—used in feline osteoarthritis treatment, which is expected to help expand its portfolio. In September 2020, Vetoquinol acquired the rights of Profender and Drontal product families for the European Economic Area and the UK from Elanco. Therefore, the company increased the size of its business and visibility in the market.

North America is estimated to exhibit a CAGR of 7.9% during the forecast period. North America held 37.64% of the companion animal health industry due to the high prevalence of livestock and zoonotic diseases, leading to greater animal deaths. The presence of many established pharmaceutical companies that are extensively commercializing their pharmaceuticals and enhancing their geographical reach is predicted to be a key factor responsible for the largest share held by this region. Moreover, healthcare programs and various initiatives being undertaken to promote companion animal health are among the factors expected to further improve growth potential in this region. For instance, the North American Pet Health Insurance Association promotes awareness about pet health insurance coverage and developing and exploring partnerships to address challenges affecting the companion animal health industry. Animal welfare organizations are undertaking effective measures in case of emergencies or sudden disease outbreaks, which is expected to contribute to market growth.

Segmental Analysis

The global market has been segmented based on product, animal type, distribution channel, end-user, and application. 

Based on animal type, the global market is segmented into dogs, equine, cats, and others. 

The dog segment dominates the global market and is estimated to exhibit a CAGR of 8.8% during the forecast period. The dominant share captured by dogs is a consequence of increasing animal healthcare spending on pets, specifically in developed regions. According to the American Pet Product Association, companion animal spending has consistently risen to USD 109.6 billion in 2021 within the U.S. Market. As per the statistics released by the American Pet Product Association, over 20% of this spending was found to be on supplies, live animals, and over-the-counter medicine, whereas over 29% was on vet care and product sales. The substantial share can also be attributed to the high penetration of feed additives, vaccines, diagnostics, and pharmaceuticals for companion animals. The increase in adoption of these products results from growing consumer awareness about their availability and benefits. Moreover, the general concern of owners about the overall hygiene and health of their pets is also a growth contributing factor for this market.

Based on product, the global market is bifurcated into vaccines, pharmaceuticals, OTC, prescription, feed additives, diagnostics, and others.

The pharmaceuticals segment owns the highest market share and is anticipated to grow at a CAGR of 9.10% during the forecast period. Pharmaceuticals include anti-infectives, anti-fungal agents, analgesics, parasiticides, and others. Pharmaceuticals held the largest share in 2022 owing to the increasing prevalence of food-borne diseases, brucellosis, and zoonotic diseases (potentially hazardous to animals), creating clinical urgency for using potent pharmaceuticals and targeted medicines. Moreover, the significant increase in animal bite incidents results in a high chance of diseases and microbe transmissions, which further propels the demand for pharmaceuticals.

Based on distribution channels, the global market is segmented into retail, e-commerce, and hospital pharmacies. 

The hospital pharmacies segment dominates the market and is expected to grow at a CAGR of 8.6% during the forecast period. This is due to the rising prevalence of chronic diseases and several epidemics. Hospitals provide advanced treatment products, which are expected to contribute to the overall growth of the hospital segment. High procedural volume because of frequent readmission of pets for treatment is one of the factors responsible for segment growth. This has also increased the need for veterinary pharmaceuticals, further boosting the adoption of companion animal health products.

Moreover, rising initiatives by the government to promote safety and reduce adverse effects are key contributing factors for segment growth. In the majority of countries, pet owners purchase products from veterinarians. Pet owners can purchase these products from various sources besides veterinarians due to the advent of online retailers and big-box retail stores.

Based on end-users, the global market is segmented into point-of-care testing/in-house testing, reference laboratories, and veterinary hospitals and clinics. 

The veterinary hospitals and clinics segment owns the highest market share and is expected to grow at a CAGR of 8.7% during the forecast period. In veterinary hospitals and clinics, various diagnostic and therapeutic options are offered. This is a key growth driver for the market. In 2020, veterinary hospitals and clinics comprised most of the end-user segment. This segment's leading market share results from several applications, including therapy, toxicological testing, and clinical pathology. The fact that some vaccines can only be obtained from accredited veterinary hospitals and clinics accounts for the segment's expansion.

Furthermore, the opportunity for segment expansion has widened over the past few years due to many government animal welfare groups issuing rules for safety practices and standards to be adopted in veterinary hospitals and clinics. Moreover, the expanding need for veterinarians in areas such as dermatology, oncology, ophthalmology, and orthopedics has also presented potential growth opportunities for segment growth, thereby increasing its market share.

Recent Developments

• June 2023 – Merck Animal Health, a division of Merck & Co., Inc., Rahway, N.J., USA, announced that the European Commission had approved INNOVAX®-ILT-IBD, a dual-construct HVT vaccine that provides long-term protection against infectious laryngotracheitis (ILT), infectious bursal disease (IBD) and Marek's disease (MD). Following the centralized approval procedure, all European Union countries where INNOVAX-ILT-IBD is licensed will update their national registrations.
• May 2023 – Merck Animal Health announced that the Australian Pesticides and Veterinary Medicines Authority (APVMA) had approved a novel injectable formulation of BRAVECTO® (fluralaner) for the treatment and prevention of flea (Ctenocephalides felis) infestations for 12 months, control of paralysis tick (Ixodes holocyclus) for 12 months, control of brown dog tick (Rhipicephalus sanguineus) for 11 months and control of flea allergy dermatitis (FAD).