Feed premixes – En route to attain global acceptance
Feed premixes are added as supplements with the concentrate feed to provide a wholesome nutritional diet for animals. The feed premix market is driven by global factors such as increased demand in compound feed consumption. The strict and transparent regulatory policies on livestock and livestock related products have resulted in market getting more organized and structured. The companies with the required quality monitoring and compliance infra-structure have been able to promote the growth in this segment by creating awareness and ensuring the supply of quality premix formulations.The market for feed premix wasestimated as USD 8.84 billion in 2015, and is projected to reach USD 10.27 billion by 2020, growing at a CAGR of 3% during the forecast period.
Owing to recent disease outbreaks, the ingredients used in feed premixes have come under the lens with efforts going towards strengthening the immunity of livestock. With advancements in technology and increasing awareness among dairy farmers, emerging markets are now obtaining more localized premix products and services. Furthermore, the feed premix market is also expected to gain effective support by the gradual shift from unorganized to organized livestock farming in the developing regions of Asia-Pacific and Latin America.
Developed nations such as the U.S., Canada, and Western European countries (France, U.K., Spain, Italy, Germany, and the Netherlands) had captured only one-third of the global feed premix market in 2014.
Emerging markets – Suitable avenues desired for future investments
The demand from emerging markets such as Asia-Pacific and Latin America accounted for a combined global share of ~47% in 2014. According to the Food and Agricultural Organization (FAO) report on “World Agriculture: Towards 2015/2030”, the population of developing countries in the Asia Pacific region is expected to see an annual growth rate of 2.4% till 2030 in meat consumption. This has stimulated the growth of commercial livestock farming activities and has also increased the demand for high-quality feed concentrates and premixes to enhance meat weight and quality of the animals. Key players in the premix market have sensed this opportunity and started premix production plants in these regions. For instance in Vietnam, 34 compound feed and premix manufacturing plants have been established by the global players over the past decade.
A large portion of the feed premix market in the Asia-Pacific region is dominated by China. The growing consciousness about farm maintenance and nutrient quality in order to increase livestock productive efficiency has shifted the demand toward high-quality feed premixes in these regions.
Efficient formulation methods and technology would play an effective role in market dominance
Although the regional network to reach customers such as compound feed mixers and integrators are established through distributors, the feed premix market has been shifting towards a service-based requirement. Companies such as Koninklijke DSM N.V. (The Netherlands), Cargill, Inc. (U.S.), Nutreco N.V. (The Netherlands), and Archer Daniels Midland Company (U.S.) are some of the players that have also been developing customized offerings to suit the demands of livestock of different – types, breed, sex, and growth and breeding phase.These solutions would be an important factor not only to uncover the full potential of animal productivity but also improve the company’s brand portfolio. Novel concepts are also being developed by these companies such as introducing organic chelate minerals with vitamins to reduce the latter’s deterioration as well as limit environmental effects due to non-bioavailability of inorganic minerals.The demand for feed premixes in the poultry segment is projected to grow at the fastest rate as compared to ruminants, goat, and swine.
Premix ingredients with strong market opportunities
After livestock-specific assessments, the inclusion of both nutritive and non-nutritive ingredients in feed premixes is considered important to gain effective results. Nutritive ingredients such as vitamins, minerals, amino acids, gut health promoters (yeast products and probiotics), and organic acids are provided in specific formulations to complement the livestock feed whereas non-nutritive ingredients such as enzymes, flavors, antibiotics, binders, antioxidants, feed attractants, and colorants are required in minute quantities but effectively supports in maintaining product shelf-life/feed uptake.
The vitamins segment accounted for the largest market share in 2014 followed by the minerals segment in the feed premix market. Vitamins are considered as important nutrient supplements for the growth of farm animals.
Regulatory concerns over unscrupulous usage of certain ingredients
Antibiotics have been a serious concern in the global regulatory environment on feed and meat products due to the excessive usage of these additives. Many developing countriesincluding Brazil and China, which export meat products to Europe and the U.S.do not have such strict regulations against the usage of antibiotics in feed premixes. The EU regulatory framework has been stringent on meat imports, andin 2006,they ensured the region compulsorily ban the use of antibiotics as growth promoters in animals. In the U.S., the Food and Drug Administration devised methods to slowly phase out the unsupervised use of drugs as a feed additive, so that it is used only for therapeutic purpose. However, its application has been prevalent in the Asia-Pacific region.
Such disparities in regulations have adverse effects on the global meat trade, especially between developed and developing economies in the form of standard issues such as meat quality, animal welfare, and environment protection. Producers of feed premixes are required to follow strict regulations related to regional and national health and safety for product approvals in developed nations; which ultimately affects the cost of the final product.
Among the developing countries, Brazil and China have recognized the need to control additional premix ingredients such as antibiotics, which has paved way for setting up their own regulatory framework for feed premixes. Though the implementation of regulations has been slower, the quality of premix ingredients throughout the supply chain would gain importance in the forthcoming years in order to satisfy all stakeholders from regulators to clients in these markets.
by B.Narendran, Markets & Markets