President Trump's Breaking of This 148-Year Streak Won't Slow This Trend One Bit
When Donald Trump entered the Oval Office, we knew things would be a bit different. After all, he's the first president ever to not have any military or political experience, and he's just the second president since 1888 to win an election without winning the popular vote. He's also the first president we've ever had that's a billionaire, and he's the oldest ever to enter the office of the presidency.
As you can imagine, these "presidential firsts" are expected to yield some unconventional results. But perhaps the biggest change around the White House these days isn't with Trump himself, so much as the lack of four-legged friends claiming ownership of the White House.
Trump just broke this 148-year-old streak
You see, pet ownership has been as commonplace in the White House for more than a century as red tape and partisanship is in Capitol Hill today.
According to data from the President Pet Museum, provided by The Economist, each and every president dating back to Andrew Johnson, who left office in 1869, has had at least one pet. With the exception of Chester A. Arthur, every president since Andrew Johnson has had at least one dog. Further, since Johnson, 11 presidents have had birds, seven had horses, and 10 had cats. In fact, Theodore Roosevelt practically ran his own farm, with the President Pet Museum listing 50 pets as having stayed at the White House during his eight-year presidential term. This included six dogs, 11 horses, six birds, two cats, and about 25 "unnamed" animals, which included a hyena named Bill and a black bear named Jonathan Edwards. Seriously, folks, you can't make this stuff up.
President Trump, on the other hand, has no pets, marking only the third presidency in history -- joining Andrew Johnson (1865-1869) and James Polk (1845-1849) -- where no pets have graced the White House. Some pundits have even suggested, purely on opinion basis, that Trump may simply not like pets.
Donald Trump can't dampen America's love for pets
However, this is one streak Trump could break that'll have little impact on growing pet ownership and expenditures rates in the United States.
According to the American Pet Products Association (APPA), $66.75 billion was spent on pets in the U.S. last year, and an estimated $69.36 billion is projected to be spent on our furry friends in 2017. There hasn't been a single year since the APPA began tracking annual pet industry expenditures -- which it's done annually since 2001, and occasionally since 1994 -- where pet expenditures dropped year over year. Total spending has essentially quintupled from $17 billion in 1994 to the aforementioned $69.36 billion estimate this year. That's a very healthy compound annual growth rate of 6.3% over 23 years.
What's that spending look like, you ask? Nearly $30 billion will be spent on food for our pets, with another $14.9 billion for over-the-counter medicines and supplies, and $16.6 billion for veterinary care. About $2 billion more will wind up going toward purchases and adoption fees, while $6 billion goes to a combination of grooming, training, boarding, pet exercise, pet walking, and miscellaneous expenses.
But it's not just the dollar figures that matter -- we're also seeing an increase in pet ownership rates, as well as how we view our pets. When the APPA first surveyed households on pet ownership statistics in 1988, 56% owned a pet. In its 2017-2018 survey, 68% of households, or 84.6 million homes, owned a pet. Today, nearly 90 million dogs, 94 million cats, and 20 million birds are owned as pets.
Most important, a 2012 Harris Interactive poll found that 91% of those surveyed viewed their pet as a member of their family, up three percentage points from 2007. If we view our pets as family -- and this Fool can attest to that firsthand -- we'll spend whatever is necessary to ensure their health and happiness.
You can benefit from this trend
For many Americans, owning a pet comes with a number of perks. For instance, you get a loyal friend for life, and you also may enjoy health benefits. The American Heart Association earlier this year suggested, based on what limited clinical data was available, that owning a pet could protect owners from heart disease, or at least lower their risk of developing heart disease.
Investors can benefit, too. An animal-focused drug developer such as Zoetis (NYSE: ZTS) could be the perfect addition to any long-term portfolio. While Zoetis has a diverse portfolio of medicines for livestock, it's really seen its strongest gains in medicines designed to treat companion pets (dogs, cats, and so on). This year, Zoetis is expected to generate between $5.1 billion and $5.23 billion in sales, which at the midpoint represents about 5.6% sales growth from last year. Since 2009, Zoetis' revenue has nearly doubled, and it's on pace to generate more than $500 million in cash flow this year.
Another potentially strong company is VCA Inc. (NASDAQ: WOOF), which operates as a veterinary care and laboratory company within the United States and Canada. As was noted earlier, Americans are expected to spend in the neighborhood of $16.6 billion on veterinary care this year, and since veterinary practices tend to boast a lot of pricing power for their services, VCA should have a bright future. In the first quarter, VCA recorded a 20% increase in sales to $678.3 million, an all-time high. Much of this was driven by acquisitions, but same-store sales growth still came in at a healthy 3.7% on a year-over-year basis.
Even traditionally lower-margin food companies could be beneficial to your financial health, as well as that of your pet. A company like Freshpet (NASDAQ: FRPT) is breaking traditional pet food boundaries and focusing on a more upscale, organic, and natural product. We've seen the premium consumers will pay for organic foods for themselves, so why wouldn't they eventually do the same for their pets? Freshpet has just scratched the tip of the iceberg in terms of consumer awareness and product penetration, yet it's improved its consumer repeat rate (i.e., customers who come back to the product line after an initial purchase) to 71% in 2016 from 58% in 2015. There's plenty of paw-tential here.
Regardless of whether Trump gets a pet, these pet ownership growth figures are undeniable.
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Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.