Total US spending on pet health products and services is projected to increase 7.1 percent per year to $28.9 billion in 2011. Spending on services, such as veterinary care, laboratory testing and pet insurance, will reflect expanding efforts by pet owners to improve the health and lengthen the lifespans of their pets. Technology transfer from human medicine to veterinary care, such as in the case of dialysis, organ transplant and magnetic resonance imaging (MRIs), is partly responsible for increased spending on services. Consumers are expected to spend over $10 billion on pet health products at the retail level. Veterinary practices, which hold a significant share of the market, will continue to lose share to on-line pharmacies, due to the cost savings these entities provide. These and other trends are presented in Pet Health: Products & Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

At the manufacturer s level, demand for pet health products in the US is forecast to advance 5.6 percent per year to $4.6 billion in 2011. Gains will be promoted by a growing interest in preventative care products, such as dietary supplements, to ensure long-term health of pets. Further fueling gains will be an increase in age-related and weight-related conditions among pets, which will provide opportunities for anti-inflammatory agents, insulin, weight loss agents, angiotensin converting enzyme (ACE) inhibitors, and inodilators.

Parasiticides accounted for the largest share of demand in the pet health products market in 2006 with 34 percent. Gains will result from increased interest in preventing heartworm and controlling fleas and ticks. The wider availability of parasite control products through retail outlets and the Internet will aid demand.

Growth in pharmaceuticals will be fueled by new product introductions intended for largely untapped segments of the market, such as obesity and psychological conditions (e.g., anxiety). Further gains will be limited by increased competition from natural remedies or alternative medical treatments. Dietary supplements will achieve the more rapid gains, though the inclusion of vitamins, minerals and various extracts in premium pet food may limit growth. However, many consumers are shifting toward supplementing pet diets with formulated dietary supplements.