5 Stocks For the 60% Surge in Pet Spending

It was found in the 2024 American Pet Products Association (APPA) National Pet Owners Survey that 82 million US households own a pet. This statistic demonstrates how common pet ownership is becoming across the country, with Millennials making up 32% of all pet owners. Global pet food sales alone in 2025 are projected to reach $158.4 billion, and have grown by over 53% since 2020, expecting to reach over 60% in over the next twelve months. As a result, companies such as Chewy (NYSE: CHWY), Freshpet Inc (NYSE: FRPT), Petco (NASDAQ: WOOF), Nestlé S.A. (OTC: NSRGY), and The J. M. Smucker Company (NYSE:SJM) will all be likely beneficiaries of the spending surge.

It Started With Snoopy

From a cultural perspective, a case could be made that it all started with Disney films like Lady and the Tramp and 101 Dalmatians,  Charles M. Schultz’s “Snoopy” comic strip and the TV series, Lassie. The notion that pets had creative thinking and anthropomorphic qualities had existed previously in fantasy literature, but its visual depiction and the manifestation of pet interactions with humans as equals led to a trend that has resulted in today’s “humanization of pets.”

With pets ascending to equal member family status, a deep emotional connection between pets and pet parents has driven innovation and spending in the industry. When pets become designated heirs to multi-million dollar fortunes and pet ownership has exploded since the pandemic, a significant recurring market has correspondingly escalated for pet food and other services. These “fur-baby” family members have their own food, treats, medical, and entertainment products, and this has fueled a huge growth industry that has caught considerably less attention than sexier industries, like AI, biotech, and cybersecurity.

Chewy. Inc.

It may come as a surprise to many, but pet products company Chewy is the 16th largest e-commerce company by market cap in the world, ahead of companies such as Etsy, Instacart, Newegg, Lightspeed POS, and numerous others. Founded in 2011, Florida-based Chewy set a record at the time when it was acquired in 2017 by privately held chain PetSmart for $3.35 billion in cash. It went on to file an S-1 to go public in 2019 as a separately operated spinoff and it has continued to grow ever since. When it was acquired by PetSmart, Chewy grew sales from $2.1 billion to $3.5 billion. When the company went public, it had boosted net sales to $4.85 billion. By 2021, Chewy went into the black generating revenues of $8.89 billion, $10.1 billion in 2022, and $11.15 billion in 2023. 2024 saw $11.86 billion, 2025 is on track to close out at $12.6 billion.

In keeping with the recurring sales model that pets-as-family-members generate, Chewy’s Autoship sales, which subscribers use to ensure regularly scheduled deliveries of food, treats, medicines, and other products, is the primary driving force behind its growth trajectory. According to TD Cowen, who has rated the company a “buy”, gross margins are anticipated to improve from 28.2% to 29.3%.

Based on its cash flows, Chewy’s is viewed as being undervalued by as much as 44%. While increased competition from Amazon and other pet supplier retailers may pose some risks to Chewy’s continued advancement, the company’s pet-supplies industry sector leadership and successful business model make it poised to be an odds-on likely beneficiary from the industry’s overall growth

Freshpet Inc.

In the movie, Once Upon a Time in Hollywood, Brad Pitt won an Oscar for his portrayal of stuntman Cliff Booth. In a decisive scene, Booth is about to feed his pit bull when his home is raided by a surrogate Charles Manson murder cult. He promptly defeats all of them using a can of Alpo dog food, a staple of the 1970s, as one of his weapons. Pet foods have come a long way since then.

Founded in 2006, New Jersey headquartered Freshpet has made pet nutrition its mission with a gourmetlike approach towards crafting its different varieties of pet foods. Sourcing fresh ingredients and natural farm-raised poultry, beef, or fish, Freshpet foods are a far cry from the canned mystery meats that comprised Alpo and other commercial dog and cat foods in past years.

Freshpet capitalizes on the trend towards pet food premiumization. Its varied menu selections, marketed under the Freshpet, Dog Joy, DogNation, Spring & Sprout, Vital, Homestyle Creations, Deli Fresh, and Nature’s Fresh brands, are all prepared by veterinary nutritionists and marketed as top quality fresh foods. Freshpet also makes Dog Nation and DogJoy fresh treats.

Specializing in dietary choices specifically catered to dogs, Freshpet offers veterinary formulations that specifically address such concerns as:

• Weight management
• Allergies
• Digestion issues
• Energy deficiencies
• Skin and coat issues
• Picky eating habits

Freshpet suffered a steep price drop starting at the beginning of 2025. After climbing from $36 in 2022 to a high of $164 near the end of January, 2025, the stock has fallen to $56.32 at the time of this writing in November, 2025. The selloff has been attributed to several factors:

• A slowdown in dog adoptions gave the impression that the market growth was curtailing.
• The company missed analysts’ projections for Q4 2024 and Q1 2025.
• In 2024, animal shelter statistics showed that cat adoptions (64%) grew while dog adoptions (56%) slowed.
• Higher expenses and slower retail outlet growth due to Freshpet food refrigeration requirements.
• Analysts’ ratings cuts due to reduction of revenue guidance from $1.18 – $1.21 billion down to $1.12 – $1.15 billion in May, 2025.

However, the company now appears to be turning things around. Freshpet beat analysts’ forecasts in both Q2 2025 and Q3 2025. Q3 most recently posted the following improvements:

• Revenue: $288.8 million vs analyst estimates of $284.1 million (14% year-on-year growth, 1.7% beat)
• Adjusted EPS: $1.83 vs analyst estimates of $0.40 (significant beat)
• Adjusted EBITDA: $54.61 million vs analyst estimates of $52.95 million (18.9% margin, 3.1% beat)
• Operating Margin: 8.6%, up from 4.7% in same quarter, year over year
• Locations: 29,745 at quarter end, up from 27,838 in the same quarter, year over year
• Organic Revenue rose 14% year on year vs analyst estimates of 12.4% growth (163.4 basis point beat)
• Sales Volumes rose 12.9% year on year (26.1% in the same quarter year over year)

In its latest analyst call, Freshpet CEO Billy Cyr and the other executives noted the following contributing elements and upcoming improvements, including:

• Continued increased profit margins based on upcoming technology innovations in production, plant cost leverage, and overall operational management.
• A forthcoming expansion of refrigeration island rollouts for retail outlet partners.
• Initiatives to expand e-commerce direct to consumer sales and other branding opportunities were in the works.

Petco Health and Wellness

Launched in 1965 from San Diego as a mail order veterinary supply business, United Pharmaceutical Company renamed itself as Petco in 1979. Its founder, Walter Evans, formed Petco to be one of the first American pet product specialty retail chains, since prior to 1965, pretty much all pet foods and medications were only sold in supermarkets.

Despite this 60-year pedigree, Petco only went public in 2021, trying to capitalize on its name brand recognition in the pet industry and the surge in pet adoptions and spending due to the pandemic. Petco currently boasts about 1,500 locations around the country and presents its outlets as a one-stop shop for pet owners. By providing a wide range of products such as food, treats, and toys, as well as services such as insurance, veterinary care, and training and grooming, Petco offers a convenience advantage over its e-commerce rivals, with PetSmart as its only significant US rival.

Petco’s success has been sizable enough to allow it to acquire its hometown San Diego baseball stadium and rename it as Petco Park, currently the home of Major League Baseball’s San Diego Padres.

Since Petco went public at the apex of the pandemic-fueled pet spending and adoption frenzy at $27.00, it has been unable to sustain those initial revenue and earnings numbers, resulting in a price falloff similar to its peers. Its current $3.10 price and high 1.7 Beta value at the time of this writing reflects conflicts in the market between bulls and bears. The company’s overall gross revenues have slackened, but its EBITDA continues to improve. Paying off a $1.5 billion debt since going public also has aided its profitability prospects going forward.

Petco has consistently beat analysts’ estimates in its last four consecutive quarters. Should it continue its streak when it announces its Q3 FY 2026 numbers prior to Thanksgiving, Petco may see a near-term bullish upswing.

Nestlé S.A.

With a 120-year long history stemming from a Swiss-Anglo merger of a milk and a cereal company, Nestlé has continued to grow to emerge as the world’s premier food and beverage company for the past decade. With a gargantuan catalog of products from Pelligrino bottled water, KitKat chocolates, Nespresso coffee, Gerber’s baby food, and a panoply of other brands, the Swiss-headquartered Nestlé also owns pet food brand Purina, which it acquired in 2001.

From its origins dating back to 1894, Purina began to establish itself at the dawn of the 20th century as a high-level animal feed supplier, inventing  pelletized animal feed in 1921. It pioneered the use of adding amino acids to cat foods and the use of extrusion technology for processing dog food during the 1950s and 1960s. By 1986, it sold off its agricultural food operations to concentrate on pet foods.

Although it offers a range of products for both dogs and cats, Purina has a solid market share in the former (which represents about 65% of Purina’s pet food revenues) and an enviable growth potential share in the latter. Purina’s 2024 US sales alone were $22.4 billion, making it a heavyweight player, and Nestlé’s largest organic growth driver.

Purina’s strong position in the wet cat food market is one of its top high-growth segments. Market dynamics are shifting in favor of cat food growth, in sync with the escalation of cat adoptions outpacing those of dogs at animal shelters. Purina has a pipeline of over 100 new pet products that were scheduled to commence launch in 2024, and cat food brands like Friskies and Fancy Feast were among them. Earlier this year, Nestlé launched a new jelly-like cat food under the Purina Gourmet Revelations brand in three meat variations across Europe. Meanwhile, Nestlé also expanded its mousse-based cat food under the Fancy Feast Gems brand in the U.S.

In a recent interview, CEO Laurent Freixe planned to grow the pet food category “a lot more and a lot bigger.” Pyramid-shaped cat food within the Purina brand is a product in particular it hopes can achieve $110 million in annual incremental sales.

“We will polarize investments to support the bigger brands and the biggest areas of opportunity, making sure that all our initiatives reach a level of sufficiency to make an impact,” Freixe said in November.

J.M. Smucker

Another food conglomerate with a history dating back to the 19th century, being founded in 1897. It has become one the world’s largest food companies, mostly through acquisition of many iconic and ubiquitous American food brands. A partial list includes:

• Knudsen’s and Sons (fruit juices)
• Dunkin’ Donuts (coffee and baked goods)
• Jif (peanut butter)
• Crisco (cooking oils)
• Borden (dairy products)
• Knott’s Berry Farm (food division, not the theme park or restaurants)
• Folger’s (coffee)
• Carnation (milk products)
• Bustelo (espresso coffee)
• Wesson (cooking oil)
• Hostess Brands (baked goods)

In addition, the pet food arena is another area where Smucker also has a significant presence. Its brand names include: Milk-Bone, Meow Mix, Milo’s Kitchen, Pup-peroni, and Canine Carry-Outs.

Smucker net sales for its pet foods (fiscal year 2025 ended in April 2025) totalled $1.66 billion, with $1.8 billion in 2024 (partially due to selling several brands, such as Gravy Train and Rachael Ray’s Nutrish) and $1.5 billion in 2023.

Going into 2026, Smucker plans to capitalize on its pet treats niche, in which Meow Mix and Milk-Bone are dominant players. Future projects already underway include:

• A new dedicated $52 million Milk-Bone facility;
• Adding Jif peanut butter to create Milk-Bone Peanut Buttery Bites
• A new Meow Mix Gravy Burst recipe for dry food offerings.

These initiatives are anticipated to average 3-4% annually in the pet foods category by:

1) Stimulating growth through increasing impulse buying sales, and

2) Creation of “everyday treating” habits by encouraging dog treat availability as an incentive for business owners to create pet-friendly environments for customers and patrons.

The pet spending surge may not repeat the pandemic era level of steep incidental growth in only a 12-month period, but its current trajectory and undervalued leading company stocks makes for an attractive upside investment opportunity for those following the sector.  Some studies have equated the psychological and emotional development of pet dogs to be akin to that of a human 2 to 3-year old toddler. Anyone who can calculate even half of what the average parent spends on a toddler and ascribe it to spending on a pet dog or cat can easily see how the math adds up in favor of the pet industry.