Over the past couple of years in the US, but over the past 5+ years in the EU, there has been a significant move away from antibiotics and generally medicated feed additives and a move toward new feed additives that can improve feed efficiency and animal health.
These new products include a new spin to traditional feed enzymes/yeast, adapting human health products to animals (e.g., probiotics), and new ones that are a little unproven (“magic dust”). This trend is shifting the feed additive industry structure ($30 billion) from the traditional pharmaceutical companies (Elanco, Zoetis, BASF) to a long list of new players, mainly in the EU and US, that are growing very quickly and trying to develop more alternative feed ingredients. Major meat exports are starting to follow the EU/US model, meaning the opportunity is truly global.
Evidence of this trend:
- Earnings of traditional companies have declined
- Traditional companies have been active in the M&A market to acquire R&D and market share of the new products
- Reduction in prophylactic antibiotic use leads to growth in non-traditional and phytogenic additive sector
- Bans on antibiotics as a means of growth promotion has driven demand for alternatives, which has provided a boost to markets for amino acids, enzymes, natural and non-medicated feed additive substitutes.
- Concern that over-applications of antibiotics in animal nutrition can impact human health and antimicrobial resistance in animal, led to the ban on in-feed in the EU in 2006. Threat of regulatory oversight on antibiotic use in the US had led livestock integrators such as Tyson Food to reduce/stop the use of in-feed antibiotics.
- The livestock margin has been good for the past ~3 years; hence there is considerable appetite for new technology/products
- Overall improved focus on improving animal health to increase feed utilization
- Growth of organic meat markets driving demand for alternative and non-medicated feed additives
Research and consulting opportunity:
- Understand scale and size of the market
- Understand new players and products and which are best positioned
- Help identify target partnerships, acquisitions
- Bring new products to marker
- Forecast demand for livestock and new feed additives
Want to find out more? Agribusiness Intelligence consulting capabilities include:
- In-depth understanding of global livestock markets
- Bring new product to market
- Identify M&A candidate
- Overall feed additive market analysis