Pets are huge!
Let me rephrase for those staring at their teacup Yorkie in confusion: the pet industry is huge at $86 billion. And it’s only going to get bigger in coming years.
So what do pet business owners need to know if they want to grow and sell a pet company in the next 1–3 years? I’ve assembled some of the top current trends we’ve noticed among clients we’re working with in the pet space.
If you want to enter the M&A market soon, or it’s on your radar at some point in the coming years, see if you can take advantage of these trends to boost your company’s valuation in the meantime.
Go online or go home
It may be time to review your online sales strategy, which is only getting more important.
Of the broad channels you can sell pet products through, online is one of the most crucial. Retail, whether mass, regional chain, or independent, are important channels to be in, but work best when coupled with robust online sales in a multichannel strategy.
And if you’re a premium brand selling through mainly independent retailers, then online is even more important because it’s tough to generate much growth with a small regional footprint. So consider how to get more of your products in the Amazon and Chewy space, and see what you can do with subscriptions to keep a reliable source of revenue rolling in—a whopping 40% of overall pet care spending goes to subscriptions!
Better for the pet, better for the planet
In pet CPG, two major priorities are winning out: pet health and planet health. Thanks to increased humanization of pets—moving Rover from the backyard to the bedroom—fresh and human-grade foods are booming. Refrigerated dog and cat food is growing at 18.2%, and human-grade products, though still under 1% of total pet food, are climbing 20% year over year.
Meanwhile , many companies make claims of sustainable packaging, while upcycled pet care is surging at over 30% growth.
For pet retail leaders, the opportunity lies in leaning into claims that resonate with this health- and sustainability-conscious consumer. For example, alternative proteins are gaining ground as pet parents look beyond beef and chicken—the top allergens for dogs, yet still the majority of dog food sales—toward salmon, exotic proteins, and plant-based options. And simple label transparency, like calling out dye-free formulations, can be a low-lift way to stand out on crowded shelves.
Feline fever
The American Pet Products Association proclaimed 2025 the Year of the Cat, with 9 million U.S. households adding a feline friend since 2023. Meanwhile, dog ownership has slightly declined (though dogs still form the majority of U.S. pets).
This isn’t just a blip—it’s a demographic shift with a clear driver. APPA’s research identifies Gen Z and Millennial men as the primary engine behind the trend, with Gen Z “cat dads” increasing nearly 20% and Millennial cat dads rising almost 25% year over year.
For pet food and durable goods companies, the message is clear: brands that successfully expand into cat-focused products are positioned for higher growth and stronger valuations. Premium cat food purchases were up 9% from 2023—outpacing the 5% growth in premium dog food—and functional add-ons like mixers and toppers have surged among cat owners since 2018.
Now may be an ideal time to invest more deeply in cat product lines, from nutrition to enrichment to wellness, before competitors claim the shelf space.
What to keep an eye on
As you think through how these trends affect your business, consider what might be affecting your gross margins. For example, which venues sell the most of your top-performing SKUs, and can you bring complementary offerings to bear in those places? Do you understand where your most recent growth surge came from? And what have you done from a supply chain perspective to account for potential disruptions and uncertainty?
All of this may be old hat to you. But in times of change, sometimes it helps to focus on fundamentals just as much as staying aware of trends. People are hungry for high-quality products—including products they can feed their hungry pets!
AUTHORED BY:
Cameron McCaslin | Director | Class VI Securities, LLC
Cameron joined the Class VI team in 2017. Cameron’s primary responsibilities include executing and closing transactions and supporting Class VI clients through financial analysis, modeling, market outreach, industry research, and valuations. Cameron’s experience covers several industries including oil and gas, manufacturing, business services, consumer products, and software-as-a-service.
Prior to accepting a role at Class VI, Cameron was working a contract position in accounting and account analysis at Performance Food Group (PFG) where his primary responsibilities were journalizing transactions in and out of the various cash accounts and account fluctuation analysis. Before PFG, Cameron was a financial reporting intern at Janus Capital Group, where his primary responsibility was assisting the financial reporting team in the preparation of several annual and semi-annual fund performance reports.