|
|
The pet economy is running the human healthcare playbook. And Europe is furthest along. |
|
One Number
Morgan Stanley projects that annual US pet spending will grow from roughly $196 billion in 2025 to more than $240 billion by 2030. Morgan Stanley, via CNBC, July 2026 That is a quarter of a trillion dollars a year. And the interesting part is not the size, but that the spending has changed the category. |
|
|
One Argument Pet spending used to be consumption — food, toys, the occasional grooming indulgence. It is starting to behave like something else entirely — healthcare.Healthcare economics follows a sequence of steps — costs inflate, insurance spreads, pharma arrives and institutional capital follows. All four acts are now visible in pets. The UK Competition and Markets Authority found vet prices rose 63% between 2016 and 2023, against 32% general services inflation. Sweden’s competition authority published its own report on vet price opacity in February 2026. The regulators believe that this is healthcare. Insurance is the area where the US is decades behind Europe. In Sweden, 92% of dogs are insured, according to an Agria/Novus survey in 2020/21. In the US, 5.99% of dogs are, according to North American Pet Health Insurance Association’s 2026 industry report. The first US pet policy, in 1982, went to Lassie, the collie, according to NAPHIA. Nowadays Swedish insurtech Lassie raised a $75 million Series C at a $400 million valuation in February to expand across Europe, according to Reuters/TechCrunch. Ozempic class GLP-1 drugs are now in veterinary trials. Okava is testing a six-month implant in cats. Akston performs tests with a weekly injection at Cornell, according to CNBC reporting in July 2026. Nothing is approved yet, anywhere. But the direction is unmistakable — pets are the next patient population. Europe’s largest vet group, IVC Evidensia, which is one of the five chains that together have bought more than 1,800 UK practices over the past decade, is in early talks with advisers about a multibillion-pound listing, probably in 2027, according to Financial Times reporting. The company, majority-owned by EQT with Silver Lake and Nestle’s Purina alongside, was valued above €12 billion in 2021 and has nearly doubled its earnings since, to £698 million. When the roll-up starts talking to listing advisers, a sector has finished becoming an industry. Rather unexpectedly, Morgan Stanley itself warns that pet GLP-1s will not replicate human drug economics, because veterinary care remains largely an out-of-pocket expense. No insurer means there will be no blockbuster drug. The first proper recession could reveal the humanisation hype behind this structure and force all that spending to evaporate.
|
|
One Position Watch European pet insurance penetration, not pet drug headlines. Sweden is not a curiosity. It is the finished model that every projection elsewhere silently assumes. Where insurance penetration rises, the drugs find payers, the clinics defend their multiples and the IPOs justify their price. Where it stays flat, $240 billion is more of a hope than a market. I am wrong if pet GLP-1s reach commercial scale in the US out-of-pocket market. That would mean humanisation alone carries premium pricing and no insurer is required. The keystone then would not be insurance. It would be love. In your market — would anyone insure the dog before the car? Hit reply and tell me. I read every answer. |
|
If this was forwarded to you and you'd like to receive Corporate Financier's Notes every Thursday, you can subscribe here. Reading on your phone? Tap the three dots or overflow menu in the top corner of your email app and select View in browser for the best experience.
|