Veterinary Services Market Size

Veterinary Services Market Size

Veterinary Services Market size accounted for about USD 86.8 billion in 2021 and is estimated to grow at 6.7% CAGR between 2022 and 2030. The rising pet adoption rate and subsequently rising demand for veterinary services will largely facilitates overall industry growth.

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The rising implementation of digital solutions in veterinary services industry is allowing veterinarians to efficiently offer quality care to different types of animals. Digital transformation of a veterinary facility enables smooth access to patient records as well as efficient care. For instance, technological advancements allow veterinarians to perform imaging tests, upload the images on cloud and share with any pathology lab globally. Digitalization of clinical treatments also enhances the overall quality of the veterinary imaging services.

Furthermore, increasing affection between pet parents and their pets coupled with rising disposable income as well as surging market penetration of different pet insurance schemes enable pet parents to willingly spend on providing quality veterinary services to their pet. Clinics are largely tapping this opportunity to promote ancillary veterinary services such as wellness plans, day-care, and boarding plans for pets.

The increasing pet-related issues, and concerns about their health, nutrition, as well as the emergency care that the different animals need are some of the other prominent factors contributing to the veterinary services market growth.

Veterinary services involve treatment of diseased animals, periodic healthcare monitoring, animal neutering, preventive services, diagnostic and dental services for pets, pet vaccination, artificial insemination, and animal health protection, among other services. Veterinary services also include surgeries and pet consulting services the health & wellbeing of companion and farm animals.

The emergence of COVID-19 pandemic largely affected the operations of the overall healthcare sector. Several essential products & services witnessed a multi-fold increase in its demand while their non-essential counterparts registered a slump across geographies. The COVID-19 pandemic was noted to have slightly slowed veterinary services market growth.

Amid the increasing number of cases in the initial months of the pandemic, stringent restrictions on the movement of humans and goods resulted in limited patient influx in veterinary facilities. The shortage of skilled healthcare professionals coupled with suspended/postponed elective procedures largely disrupted the operations of veterinary facilities, resulting into a negative impact on providers in the market.

However, on the upside, pet adoption rate was observed to increase during this period as individuals responded to the stay-at-home orders by adoption companion animals. For instance, according to a biennial survey conducted by American Pet Products Association (APPA), over 25% of pet owners who adopted new pet during the pandemic stated that their decision was primarily influenced by the restrictions imposed due to COVID-19.

The rising disposable income also enables pet parents to spend on quality veterinary services. Over the course of the pandemic, as the restrictions were noted to ease down, veterinarians were also noted to resume operations while abiding by the mandatory guidelines. Adoption of digital consultation services by both, pet parents as well as veterinarians, allowed veterinary services being offered in remote locations, enhancing the overall convenience of owning a pet. These advancements are largely noted to have surged the market demand significantly.

The willingness of pet parents to spend more on pets can spur the market statistics

According to American Pet Products Association (APPA), in 2021, about 70% of U.S. households have minimum one pet. The U.S. has witnessed an increased overall and per capita spending on pet care in past few decades. According to The North American Pet Health Insurance Association (NAPHIA) The U.S. pet insurance market witnessed a rise and had more than $1.99 billion in gross written premiums in 2020. The pet insurance enables the pet owners to efficiently spend quality care services for their pets and provide them with optimal treatment options, minimising the out-of-pocket expenses.

Further, the pet adoption rate is also observed to have increased in the recent years. According to APPA, 14% of new and existing pet owners adopted a new pet in 2021. Hence, owing to rising pet adoption coupled with pet insurance schemes, the overall market is expected to grow significantly throughout the forecast period.

Rising costs of veterinary services may hamper the market growth

Rising pet population, increasing demand for veterinary services alongside technological advancements in the clinical procedures is primarily leading to increasing costs for veterinary services. This is expected to hinder the market growth to certain extent.

For instance, as per American Veterinary Medical Association, in 2020, the pet population of companion animals in the U.S. involved over 38% dogs and over 40% cats. Further, according to a survey conducted by the American Pet Product Association, only 5 percent of cats and 10 percent of dogs are covered by pet insurance. While the pet insurance industry in the U.S. is expanding, it is still in its infancy.

Additionally, as per the Nationwide/Purdue University Veterinary Price Index, since 2015, the cost for veterinary services have increased more than 10% for clinical treatments and over 5% for routine check-ups. Similar trend is observed for prices associated with veterinary surgical procedures as well as medications. It is anticipated that the aforementioned factor will have moderate impact on the market over the long term as the penetration of pet insurance products increases.