GLOBAL FEED SUPPLEMENTS MARKET 2014 - 2020 Growth Trends, Forecasts & Competition
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1 INTRODUCTION 1.1 Research Methodology
The research methodology can be put into the following sequence: 1) Secondary Research: Information was collected from a number of public and paid data sources. Public sources involved FAO, publications of the Feed Associations of different countries, company annual reports, white papers and research publications by recognized industry experts. Paid data sources include authentic industry databases. 2) Primary Research: After collecting data from secondary sources, primary interviews were conducted with stakeholders at different points of the feed value chain like manufacturers, distributors, ingredient suppliers, companies producing enzymes and key opinion leaders of the industry. Primary research was used both to validate the data points obtained from secondary research and to fill the data gaps after secondary research. 3) Market Engineering: The market engineering phase involves analysing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates. 4) Expert Validation: The market engineered data is verified and validated by a number of experts, both in-house and external. 5) Report Writing: After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.
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3. MARKET ANALYSIS 3.5 Factors affecting the market 3.5.1. Drivers
The global compound feed market is driven by factors such as increasing meat consumption across the globe and growth in the processed meat industry. Other factors responsible for growth in the market are population growth and increase in the income of middle class population in developing countries. The flexibility to choose from numerous raw materials is also triggering the growth of the industry.
3.5.1.2 Increased awareness regarding quality meat and milk products Food safety has become an important issue for many governments around the world, especially in North America and Europe. Consumers around the world are now more aware and informed and giving importance to the extrinsic quality attributes of the meat they consume. Certain pathogenic and parasitic contaminations in meat products such as salmonella, listeria and E. coli, along with various disease outbreaks in livestock animals such as swine flu and foot and mouth disease in the past decade have raised concerns over meat quality and safety. For example, in January 2011 a meat quality issue arose in Germany, where a cancer causing dioxin was found in meat products. Taking safety steps, many countries including South Korea and Slovakia banned pork imports from Germany due to the health risks involved. Use of compound feed with feed additives such as antibiotics, enzymes, and vitamins provides balanced nutrition to the animals and protects them against such harmful environmental influences. Global Feed Supplements Market | Sample
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3.5.2. Restraints
The main obstacle in the growth of aquafeed market is the rising cost of important raw materials such as Soybean, maize, fish meal and fish oil. Another restraint is the regulatory structure of the animal feed industry which restricts the use of certain materials such as antibiotics which will enhance the productivity.
3.5.2.2 Government regulations Regulatory issues are the biggest constraints in the compound feed industry. Animal feed production comes under feedstuff regulations in most countries. Regulatory framework is increasingly getting stringent, such as in the year 2006 in EU and in 2009 in the U.S., when the use of antibiotics as growth promoters in animals was banned. Europe had also imposed a ban on the use of animal proteins in aquafeed. Many countries including China, Thailand, and Vietnam that export fish to Europe and U.S. do not have such regulations against the use of antibiotics or animal proteins in feed. Such disparities in regulations have adverse effects on the global fish and aquafeed trade, especially between developed and developing economies. Producers of feed and feed additives are required to follow strict regulations related to regional and national health and safety for their products to get approval in developed nations. This ultimately affects the cost of the final products. Such regulatory initiatives are posing challenges for existing feed products and are increasing the cost of new feed development.
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3.6 Porter’s Analysis 3.6.5 Threat of Substitutes
Farm-made feed is a substitute to compound feed. The compound feed industry has evolved over the last five decades with increasing demand for meat, milk and seafood. Farm-made feed, however, has been in use for centuries. Despite increased efficiency and production of compound feed, a majority of farmers in Asia-Pacific, South America and South Africa prefer using farm-made feed due to the low cost. The raw materials required for production are readily available. Moreover any number of raw materials from a variety of plant sources can be used. Instead of buying costly compound feed, farmers prefer manufacturing feed in the farm. Various single substances such as fish meal and fish oil are looked upon as effective alternatives. The differences in climate and animal species gives rise to demand for tailor-made products. These tailormade products become substitutes of the existing product list. With increasing focus on improving feed efficiency, feed manufacturers are striving to achieve product differentiation by commercializing innovative products. Thus, threat from substitutes is high.
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4 MARKET SEGMENTATION BY TYPE 4.1 Introduction
Compound feed contains nutrients and energy sources essential for the health and growth of the animal. The common ingredients of feed are mineral sources, energy sources, protein sources, etc. However, not all nutritional requirements of the animal can be met with the common raw materials such as soybean meal, soy protein concentrate, fish meal, fish oil, rice bran, wheat, corn gluten, etc. Also, these raw materials do not provide defence against diseases. Hence, feed additives are used in animal nutrition to improve characteristics of the feed for animal health benefits by improving feed digestibility and increasing nutritional content and feed palatability. To achieve desired high yield output, livestock producers are putting external inputs in the form of feed additives for animals other than normal feed such as cereal crops. A variety of feed additives are blended with the feed in varying quantities, depending on the livestock as well as the surrounding environment and its impact on the animals. The global animal feed additive market is primarily dependent on the type of feed, the type of animal/livestock and the regulatory structure in the market. The industry is witnessing favourable market trends such as rising demand for high protein diets, especially in the developing economies of China and Brazil where per capita income is also rising rapidly. The demand for feed additives is also rising because of increasing facilities for mass meat production. Animal disease outbreaks such as H1N1 (Influenza A) have resulted in increased concern over meat quality and safety, and are driving the growth of feed additives for better animal health and disease protection. The regulatory ban on antibiotics as growth promoters in Europe and U.S. has had a negative impact on market growth in these regions. Such a ban on antibiotic usage is affecting the global meat trade between developed (U.S. and Europe) and developing (Brazil, India, and China) nations because of regulatory disparities.
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4.3 VITAMINS
Vitamins are naturally found in most of the feed stuffs, but to provide proper nutrition, additional vitamin supplements are mixed in the livestock feed. Major feed vitamin additives added as supplements to the feed to improve and maintain animal health including vitamin A, D, vitamin E, vitamin K, and riboflavin. Global demand for vitamin feed additives is expected to show a healthy growth rate. Vitamin E is an important micronutrient required to prevent muscular weakness in all animals; it accounted for the largest market share of 30% in the global vitamin feed additives market in 2011. Other major vitamins consumed as feed additives include vitamin B with a 28% share and vitamin C with a 20% share. Most of these vitamins are consumed as micronutrients and in different combinations to overcome vitamin deficiencies in different livestock animals. Vitamins are mainly used in minuscule quantities and sometimes also act as antioxidants and preservatives for animal feed.
Vitamins: Compound Feed market Volume, by Region, 2012-2020 ('000 Metric Tons) Region
2012
2013
2014
2020
CAGR % 2014-2020
North America
XX
1,151.6
XX
XX
XX
Europe
1,077.7
XX
XX
XX
XX
Asia-Pacific
XX
XX
XX
2,786.1
XX
South America
XX
XX
445.7
XX
XX
ROW
XX
XX
XX
XX
3.4
Total
XX
XX
XX
XX
XX
Source: All About Feed Magazine, The poultry site, The fish site, Primary Interviews, IFIF
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Vitamins: Compound Feed market revenue, by Region, 2012-2020 ($ Million) Region
2012
2013
2014
2020
CAGR % 2014-2020
North America
XX
1603.5
XX
XX
XX
Europe
XX
XX
XX
2322.1
XX
Asia-Pacific
2011.3
XX
XX
XX
XX
South America
XX
XX
829.3
XX
XX
ROW
XX
XX
XX
XX
4.0
Total
XX
XX
XX
XX
XX
Source: All About Feed Magazine, The poultry site, The fish site, Primary Interviews, IFIF
The fastest CAGR of XX% is expected in the Asia-Pacific market due to increasing meat production capacities in China, India, Thailand, and Malaysia. The meat industry in countries such as China, Brazil, and India is increasingly shifting towards industrialization as the market moves from the unorganized sector (local butcher shops) to the organized sector. This is expected to drive the demand in these countries as they look to increase their meat exports by meeting international meat standards. Major players in feed vitamins include BASF, DSM, Adisseo, Danisco, Lonze Group, and Nutreco International.
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7. COMPANY PROFILES 7.4 ALLTECH, INC. 3031, Catnip Hill Pike Nicholasville KY 40356 U.S. Tel: 1-859-8859-613 Fax: 1-859-8856-736 Website: www.alltech.com
OVERVIEW Founded in 1980, and headquartered at Kentucky, U.S.; Alltech Inc. is engaged in the production and sale of nutritional products and solutions for the feed industry. The company’s core capabilities lay in yeast fermentation, peptide technology, and solid state fermentation. It has used these technologies to offer a range of natural solutions to the animal feed industry for improving animal performance and profitability. The company carries out research and innovation in various areas such as bioscience centers, nutrigenomics centers, aquaculture centers, community biorefinery, and quality assurance. The company has a presence in 128 countries and has 31 manufacturing plants across the globe. Its operations spread over Europe, Asia-Pacific, Canada, Middle East, and Latin America. Its prime subsidiaries are Alltech Australia Pty Ltd (Australia), Alltech Biotechnology Romania SRL (Romania), Alltech (Pty) Ltd (South Africa), Alltechnology C.Z. s.r.o. (Czech Republic), Alltech Deutschland GmbH (Germany), Alltech Spain S.L. (Spain), and Alltech Venezuela S.C.S. (Venezuela). It employed around 3,000 people in 2013. The company's major competitors are Adisseo France S.A.S (France), Elanco Animal Health Inc. (U.S.), Novus International Inc. (U.S.), Pfizer Animal Health (U.S.), and Royal DSM N.V. (The Netherlands).
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FINANCIALS The company is privately held and do not have any financial details in the public domain.
PRODUCTS & SERVICES Alltech: Products & Their Description Product
Description The product promotes performance and is available for pigs, poultry, dairy, beef,
Actigen
aquaculture, equine, rabbits, and pets. Allzyme SSF is a natural complex that improves profitability by optimal performance of
AllzymeSSF
animals and their diets. It is available for pigs, poultry and aqua. The products are derived from a specific strain of yeast and helps promote animal
BIO-MOS
performance for pigs, poultry, dairy, beef, aquaculture, equine, rabbits, pets. The products are range of chelated organic trace minerals provides mineral nutrition that
BIOPLEX
consists of organic Zinc, Copper, Manganese, Iron and Cobalt for all animals species. The products are microbial protein technology which is designed to provide a unique, high
DEMP INCUBATE
quality protein source to dairy and beef animals. The products are supplement specifically designed for poultry pre-starter diets fro poultry. The products are patented natural solution to help animals achieve their true potential for
INTEGRAL
dairy, pig, poultry, equine, companion animals, and aquaculture.
LIFEFORCE
The products are all-natural daily nutritional supplement for horses. The products are natural solution to help animals achieve their true potential for dairy, pig,
MTB-100
poultry, equine, companion animals, and aquaculture. The products reduces mycotoxin absorption in the animal and contributes to the control of
MYCOSORB
mycotoxins in feed for dairy, pig, poultry, equine, companion animals, and aquaculture. The products reduces mycotoxin adsorption within the animal, thereby negating the damaging effects of mycotoxins on health of dairy, pig, poultry, equine, companion
MYCOSORB-A+
animals, and aquaculture.
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Product
Description The products are high quality protein from yeast that contains highly concentrated levels of essential and functional nutrients which are important in the diets of young pigs, poultry,
NUPRO
ruminants, aquaculture, and pets.
Optigen
The products are non-protein nitrogen (NPN) source for ruminants. The products are organic form of selenium for use in Dairy, beef, poultry, pigs, aquaculture, equine, companion animals, goats, sheep, toxicity and safety studies, selenium-enriched
SEL-PLEX
food products. The products are solid state fermentation of Aspergillus niger for use in pigs, poultry and
synergen
aqua. The products are yeast culture based on a proprietary strain of Saccharomyces cerevisiae,
Yea-sacc
a yeast strain specifically selected for its influence on animal performance.
Source: Company Website and Company Publications
STRATEGY The company aims to attain $1 billion sales by the year 2015. It strives to increase its geographic presence by opening offices in Morocco and Pakistan. It also opened a new facility in China and intends to further increase investments with an aim to triple sales in China within two years. The company is also focused on developing new products adapted to market needs. Recently, it opened a new algae fermentation plant in U.S., which offers a new technological frontier with high potential for the feed industry. The company also started a new center for Animal Nutrigenomics and Applied Animal Nutrition. The partnership with Norwegian Institute of Food, Fisheries and Aquaculture Research (Nofima) helps to increase its microalgae role in feed additive and hence to develop new products.
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