Ankur Kalra Manager – Chemicals & Materials Infoholic Research

In old medieval ages, the livestock were fed from farms and waste from household. The idea of industrial production of animal feed which began in late 1800s and evolved since then, gave birth to the feed additive industry in parallel. The feed additives market has always been changing aligned with feed industry requirements. Sometimes, the availability changes the dynamics, while sometime limited resources and economic scenario force the trend change. However, the factors are changing now, and it is consumer awareness or lack of awareness along with government regulations is the ones which are propelling change in the feed additives market. In order to understand the changing dynamics, let us understand the current scenario first.

Current Scenario Market Concentration Globally more than one billion tons of animal feed is produced with highest growth percentages coming from the African region. The top seven countries including US, China, Brazil, India, Spain, Russia, and Mexico are contributing almost half of the animal feed production globally. In the recent past, the growth has largely been contributed by the developing countries in Asia-Pacific and Europe. China and India led the growth index in the Asia-Pacific region, while Russia and Eastern European countries added growth to the European region market. The chart provided below is expected to illustrate the demand skewness and the dominance of top seven countries in the global feed additive industry.

Uneven Distribution The animal husbandry market also differs hugely across regions. The developed regions of North America and Europe have relatively far higher per capita consumption of meat products as compared to the developing and underdeveloped economies. Countries such as Mali, Chad, and Turkey have relatively lower dietary dependency on the meat products than the developing countries such as India and Brazil, which in turn are low on meat diet than the US and Western Europe. The meat dependency has been seen increasing with the economic growth and increasing per capita income in the relatively open economies where income is being distributed and does not get accumulated in the hands of few. There are many surveys by different associations which indicate the increased per capita meat and meat products consumption parallel to the economic development in the developing nations. However, based on the available resources and consumption pattern, there is variety of meat options across regions. One of the starkest examples which can highlight the pattern is aquaculture, wherein Asia-Pacific holds more than two third of global market share.

Feed Additive Market Feed additives have evolved in response to the dynamics in the feed market. Those days are long gone when feed additives were only meant to add volume to the animal husbandry industry to maximize the farmer’s revenues. Everyday there are additional requirements from the feed producers which are addressed by innovative solutions from feed additive manufacturers. Riding the innovative approach to serve end consumers, the feed additives market reached $19.14 billion in 2017. Amino acids represent the largest segment within feed additives followed by Vitamins and Antibiotics. The European region has been seen moving away from antibiotics, while the developing nations are consistently increasing the consumption of cheaper supplements to add volume to their animals. Poultry and Ruminants are the largest consumer segments which are contributing towards the feed additives market, while swine and aqua also contributed a significant share.

Drivers of Change The markets across the globe have been largely changing, either based on the consumer preferences or forced by the regulatory guidelines. We’ll consider each of the parameters separately parallelly discussing the impact on the feed additives market trends.

Consumer Preference As the consumers in various geographies are moving from historic income segment to higher income segment in the developing countries, the food preferences and dietary habits have been changing. The restaurant food has been becoming popular in the developing countries with distributed income, increasing the portion of meat products in the average diet. The transition from the fruits and vegetables to frozen food and meat products has been a trend in developing countries, while the developing economies are more concerned about the environmental impact. The products such as enzymes have been becoming highly popular owing to their biological nature and minimizing the environmental impact. Infoholic Research estimates suggest that the feed enzymes market shall reach $1.51 billion by 2023, indicating a CAGR of 7.3% during 2017–2023.

Regulatory Push The governments in the developing economies have been moving to the next option of nutritional supplements. Consumers in the developed economies have now become more cautious about their nutritional intake and want complete dietary supplements from preferred food choices i.e. meat and meat products. This has added the requirements of passing the nutritional value to meat consumers via adding these in animal feed. Additionally, the regulations such as phasing out of antibiotics from feed additives in European Union, are some drastic measures which impact the market.

Conclusion We can easily say that the factors which have been shaping the development of animal husbandry and feedstock industries have been different in different eras. The industrialization of feedstock and feed additives, which started with focus on cost benefits via economies of scale, moved to adding value to farmers via additional volume from specific feed additives. Now the industry is changing again and this time, increasing customer awareness and regulatory factors are shaping the industry trend to ensure the nutritional value transition to end-consumer i.e. human beings. In wholistic terms, we can say the animal husbandry and feed additive industries have moved from increasing affordable availability for everyone to offering healthy and nutritional benefits for better life. The impact of these changes is yet to be seen but the least that we can fathom is that that the steps are being steered in the right direction.