From cats, to dogs, to goldfish - pets have become a $1.8 billion business. That's how much New Zealanders spent on our animal companions last year.

That figure - up from $1.6b in 2011 - includes everything from pet insurance, to food, minding services, grooming and pet care luxuries.

The NZ Companion Animal Council (NZCAC) says 64 per cent of Kiwi households own a pet, and this country holds the world record for the highest per capita cat ownership.

Forty four per cent of households own at least one cat, and just under 30 per cent have a dog, with medium and large breeds the most popular, although the popularity of smaller breeds is on the rise.

Last year the average household spent $1686 on dogs, up from $1571 in 2011. The average for cats was $1005 per household, up from $883 in 2011.

Dr Jessica Walker, manager of NZCAC, says statistics suggest pet owners are becoming increasingly knowledgeable about the physical, behavioural and emotional needs of their pets.

Alice McKinley, director of Kin Marketing, however, believes Kiwis' increased spending on their pets shows animals are filling the void once occupied by children.

"Millennials are putting off having kids because it's getting ridiculously competitive to buy a house, living costs are now higher, and so people are happy to spend $50 or so, sometimes even more, a month on their pets - more than what they usually would - rather than giving up their jobs to have a baby and not having an income and literally not being able to survive, until they get on to a higher pay bracket."

The "pet parenting" phenomenon is growing in popularity and isn't likely to stop any time soon, McKinley says.

McKinley, a former public relations executive, realised the opportunities in the pet industry after successfully creating The Big Dog Walk with Lots of Dogs, an annual event which attracts 40,000 people and their dogs nationwide.

Since then, she created her own marketing and events company Kin Marketing and launched her own dog-themed stationery business Paper Scissors Box, as well as getting involved in dog-related events such as community dog walks, dog music festivals and the monthly retail market Paws in Parnell.

While New Zealand has more cats, McKinley says Kiwis spend more on their dogs.

"You've got millennials who are driving the trend, and then you've got retired people who are living longer and healthier lives, and they are part of it as well," she says. "Funnily enough, during the [global] financial crisis the pet industry increased by 10 per cent - people really are happy to cut out chocolate, travel or other things, but they're not going to get rid of their pets."

Social media is also driving up expenditure, she says.

"Social media is a place to show off your pet, and some of these accounts are doing ridiculously well. There's a pug that has over 2 million followers; you've got Instagram dog influencers now in which people are earning thousands of dollars - the equivalent of what you would get as a human, if not more."

Forty per cent of people say they think their pets love them more than their partner does - possibly another reason why they are prepared to fork out thousands for their pets.

"The beauty of animals is that they are uncomplicated, they've got fewer needs and it's not hard to make a pet happy."

Auckland-based pet photography company Dog & Co, which also distributes handcrafted collars from the US finished with Swarovski crystals and other precious materials, is not short of business.

The family-run company sells luxury collars priced from $52 to $119, and its professional photo shoots with a minimum of six edited photographs of your furry friend will set you back $75, or $220 for 20 shots.

Co-owner Steve Antunovich says photo shoots with dogs are most popular, but the number of other pets his daughter Kirsty shoots is on the rise.

"We see so many younger ones having pets and they spoil them rotten, and they deserve to be," he says. "Kirsty has some amazing photos of dogs that dote on their owners and owners that dote on their dogs. When you look into your dog's eyes, the dogs can just look into you and see right into your soul. You see the love in these peoples' and dogs' eyes and its just magic."

Antunovich says New Zealand is increasingly adopting the pet culture seen in the US.

"You can see it slowly [following the trend]," he says.

"You go to cafes now and people sit outside with their dogs but I'm also starting to see the dogs come inside, especially in places likes Kingsland and the other trendy places - you see the little puppies coming inside with their owners and that's the way it is in Europe, and that's the way it is in the States."

Statistics show people are now wanting healthier treats and food for their pets.

"It all comes from the humanisation of pets," McKinley says. "When people think of their pets, they think of their own diets."

According to NZCAC's latest Companion Animal Survey, food was the largest expenditure category in 2015.

The trend to spending on pets is reflected by an assessment by the Ministry of Business, Innovation and Enterprise, which rates the petfood as one of the six best "emerging growth opportunity" sectors in the New Zealand food & beverage industry.

Similarly, trends we see in human foods we also see in petfood.

A report focused on investment opportunities within the New Zealand petfood industry, carried out for the ministry and several other organisations, reveals an "increasing number of pet-owners are treating their pets as part of the family, demanding better quality and spending more on their companions", as trends in petfood mirror trends in human food choices.

NZX-listed aquaculture company New Zealand King Salmon also has a petfood brand, Omega Plus. Two years ago it established a division to focus on using the raw materials left over from its processing operations.

After research, Simon Thomas, divisional manager of Omega Plus Innovations, says the company identified an opportunity in the petfood market.

"We recognised that we had a raw material that was very well-suited as a petfood ingredient, due to the high levels of marine based omega-3 and the associated health benefits these provide for animals," Thomas says.

"We were already selling to petfood manufacturers, but there wasn't a lot of interest at the time from the industry to consume larger volumes of salmon.

"We identified that there was very little choice for consumers to purchase quality petfoods and treats in the supermarket that they felt provided their pets with key health benefits. We were therefore able to develop and launch a range of products with the Omega Plus brand that offers a solution in the supermarket aisles."

Petfood is going through an exciting stage, Thomas says.

"Global trends in the petfood industry are pushing products away from the economy and mainstream categories, and into more premium products.

"Worldwide there has been a drop in volume as dog owners move away from larger breeds of dogs and into smaller breeds - however, value has been on a steady increase as they purchase premium products," he says.

"We see huge potential in petfood, both domestically, and in export markets with Omega Plus. Salmon has become a real hero ingredient in the petfood industry due to the health benefits it provides. We are seeing increasingly strong demand for raw materials, and novel new treat items we can provide."

Singapore-owned petfood company Addiction Foods New Zealand began in 2002 when chief executive and co-founder Jerel Kwek couldn't find suitable petfood for his dog with severe allergies.

Sales of the organic, grain-free petfood made in its Te Puke processing plant are increasing, and the company has been growing at a rate of more than 50 per cent per year for the past four years.

"We are seeing a great humanisation of the petfood industry where pet owners treat their dogs and cats like family, like their children," Kwerk says. "What people are learning about nutrition in their own lives they are also instilling in raising their cats and dogs. Similarly, the trends we see in human foods we also see in petfood."

The company owns and operates New Zealand's largest dry petfood plant and exports to more than 15 countries including the US, Canada, Singapore, Malaysia, Hong Kong, Taiwan and Japan.

"Pet owners are now paying a lot more attention to their dogs' nutrition," Kwerk says. "For the longest time it was a reactive way at looking at pets' health, where your dog would get sick from a nutritionally-related issue such kidney or liver disease, and so I'm really heartened that pet owners are now taking care of what their pets eat and that they're not just fed scraps."

Dogs are a valued member of the family nowadays and whatever you want to give them, you can get locally or otherwise.

The New Zealand Petfood Manufacturers Association says New Zealand's cat food market has a value of $226m, while dog food is worth $168m.

In the prepared petfood market, supermarkets dominate with 87 per cent of sales, with the rest split between vets, pet shops and the rural sector.

In 2012, pet owners globally spent a total of US$92b ($128.6b) on pet care, with almost three quarters of that spent on food alone.

The companies cashing in on 'pet parenting'

Bark Bag, Happy Dogs, Snoop Inspired, Cotton Tails and Barking Bad are some of many start-ups popping up around the industry.

Barkley Manor owner Krista Strong set up her 40ha doggy daycare, grooming and training business in 2007. Over the past 10 years she's seen a influx of customers using her services as a means to justify purchasing a pet.

"When we launched daycare we gave a large amount of people out there that felt very guilty about leaving their dogs at home an opportunity to not feel guilty, however, there's a flip side of this coin - we're a really hectic industry now - there's lots of people out there: daycares and walkers and nails being painted pink, where people think you can make easy money," Strong says.

Barkley Manor is a playground for between 900 and 950 dogs a week, with 28 employees. It costs owners $30-35 per day, per dog, for a full day on an ongoing basis, or $48 for a casual visit.

"We've allowed [our] customers the opportunity to treat their dogs as if they're children, but not treat them like children," Strong says.

Strong says she believes money is being thrown at the pet industry.

"What I see in New Zealand is a large amount of people passionate, who think there's a lot of money in the pet industry ... and then all of a sudden expenditure, rules and regulations set in and they dissipate."

She says retailer Animates is setting the standard for what is sustainable long term.

"I think if you want to sell high-end collars, bowls, toys [beware], we kind of see those stores launch - everybody gets very excited - and then: I don't know if the Auckland market is just a bit fickle, but then they kind of go quiet and disappear."

Sky-rocketing pet insurance

The price of pet insurance is rocketing, and McKinley believes this is the result of insurance providers recognising the level of care owners now expect.

Last year the largest claim at Southern Cross Pet Insurance was just under $24,000 for a labrador that was hit by a car and suffered multiple pelvic fractures, requiring surgery. Southern Cross paid out almost $10,000 under its GoldRibbon plan.

For the year to June 30, Southern Cross Pet Insurance had more than 21,064 pets covered - 33 per cent cats and 66 per cent dogs - up 29 per cent on the previous year.

Some breeds of dogs - often larger dogs or those with exaggerated body shapes - are considered higher risk than others.

Auckland mother Jasmin McArdle's monthly pet insurance premium for her beloved German shorthaired pointers Wilfred and Wilma with Petplan has increased from $100 per month to more than $210 on the basis of a policy change.

McArdle immigrated from Australia two-and-a-half years ago and was able to transfer her pet insurance with Petplan. While the transfer initially worked out to be cheaper, she says she was shocked when the rate for one of her dogs almost trebled recently.

While she says thinks the premium is too high, she still pays it.

"My husband and I have always been advocates for pet insurance ... and anyone who has got a puppy, I always recommend that they get pet insurance," she says.

McArdle now forks out $210 a month on her two dogs for insurance alone, and says she's not the only one who thinks the premium is hefty.

"These pooches are part of the family, and for us it [insurance] was that we would never, hopefully, be in the position where it would be whether we could save our dogs' life based on money," McArdle says.

"For us, we still feel like we're in front; we have used that insurance and it has been valuable so we continue to pay it but we're a one-income family now with a little baby and we're lucky enough to be able to continue to afford paying it - there would be plenty of people who wouldn't."

Off-the-lead dog walking service Hound Dog High began at the end of 2014 when founder Jennifer Brewer saw an opportunity.

She says there were just a handful of dog walking services when she started, but today there are plenty.

Brewer believes increased spending on pets is not a passing trend, and will continue.

"In a time when having human babies does not have the focus it used to, fur babies provide an alternative option. They are wonderfully receptive and teach us so much about love and kindness, and they generally keep us happier and healthier," she says. "Dogs are a valued member of the family nowadays and whatever you want to give them, you can get locally or otherwise."

Facts and figures

• In 2015 New Zealand's total pet population was 4.6 million.

• New Zealand has highest cat ownership per capita worldwide.

• There are 683,000 pet dogs in New Zealand.

• Food was the biggest expenditure category in the pet industry last year.

• Southern Cross Pet Insurance had more than 21,064 pets covered for the year to June 30.

This story was first published on October 21