Veterinary Market Overview
Overview of the Veterinary Market:
Our Vet Seekers founder David Maclellan who started in the veterinary space back in 2008, has seen tremendous change to date with the ownership of independent practices accounting for around 89% of the UK veterinary industry, fall to approximately 45% by 2021. Currently there is just short of 8000 veterinary service providers here in the UK and Pet ownership is increasing year on year. Despite economic factors the veterinary services projected revenue is looking to grow at a compound annual rate of 4.7% to £6 billion over the next year.
The overall market size is projected to increase over the next five years (to 2028) with pet ownership levels to continue to rise and along with forecasted population growth, particularly in the number of people over the age of 65, will be a significant driver of pet ownership. Other factors like compulsory microchipping, online pet product / health e-commerce spend rising rapidly, a huge increase in pets being able to attend workplaces, new advanced medical, surgical and diagnostic procedures, along with the growing availability of new drugs are expected to increase the range of services that vets can provide, further contributing to market growth.
The pet subscription / products / technology markets have seen significant growth in the last year alone, which is now a very competitive market. Quite rightly with the push to reduce antibiotic use and amongst other factors, we are seeing a rise in the Holistic and Natural Pet Product market and there is certainly a demand for this.
The estimated market share concentration of the veterinary services industry in the UK is moderate, the top 4-5 companies generate between 40% and 70% of industry revenue which means competition has fallen due to the rising prominence of large groups. These large groups are mostly owned by private equity firms, who are at the end of the day, a business and are very much profit driven. In recent news it's said that this factor has led to the impact of the rising level of vet bills with other related factors including recruitment, retention, investment, carbon offset and sustainability, etc.
That being said, the industry has come under recent scrutiny by the Competition and Markets Authority (CMA), given how concentrated the market has become, which is now far more public with a review by the CMA expected with its findings due early 2024. This has also helped aid a window of opportunity for new players / concepts to come into the market. We are already seeing a rapid increase of new independent practices and smaller groups either opened or are soon to be opened. We have been working very close with number of people and practice and getting to know their business, ethics, culture, future growth plans, providing advice and of course all their recruitment needs which has been a challenge, but a very rewarding one.
There is a shift happening with more locums now looking to move into permanent roles, which is certainly a positive for any veterinary practice and group. The CMA has also recognised there is a significant shortage of veterinary professionals in the UK.
It is clear that legislative changes immigration, visa's, Brexit, pandemic, slow growth / expansion of UK veterinary schools has certainly impacted the shortfall of veterinary professionals in the UK. We are unable to produce the number of Vets in the UK to keep up with demand. The UK was heavily reliant on EU Vets, so much so that around 29% of the UK veterinary surgeons came from the EU to work here in the UK. With legislative changes in areas like visas, the UK has seen a significant drop in EU vets registering with the RCVS. I'll be honest, the process, time and cost of areas such as sponsorship is certainly not a helping factor.
There is certainly scope to invest in veterinary schools in the UK, to tweak or revamp current veterinary business models and legislation to drive recruitment, invest in education, new areas to meet demand along with creating new strategies to continue to improve clinical care through investment in people, management training, buildings, facilities, equipment, technology, preventive health care/ education etc.