Additives are used to enhance the nutritional value of animal feed for improving the performance of animals and their health. Higher feed quality leads to better quality of animal-based food produce. Feed additives are either nutritional additives like amino acids, vitamins and minerals or non-nutritional additives like acidifiers, antibiotics and enzymes. Nutritional additives help the animals to gain higher muscle mass rapidly, contributing to more lead meat. Non-nutritional additives lead to prevention of illnesses, better digestion and higher reproduction.
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Industrialization of meat production and higher demand for meat consumption due to economic growth and recognition of the need to consume protein-rich food are the main drivers of demand for animal feed additives. Additionally, growing awareness about consuming quality and disease-free meat has also led to increased demand for additives. The global animal feed additives market is anticipated to grow beyond $19billion by 2020.
Based on products, the global animal feed additives market can be categorized into antibiotics, vitamins, amino acids, antioxidants, enzymes, acidifiers, and other. The EU, in 2006, banned the use of antibiotics as growth promoters to reduce the emergence of antibiotic-resistant bacteria and microbes, thereby promoting public health. The US FDA too, recently announced a ban on antibiotics except for veterinary purposes. Thus the share of antibiotics in the animal feed additives market which was more than 25% in 2012 is expected to reduce by 2020. The share of other additives like amino acids and vitamins is anticipated to grow steadily.
Feed acidifiers and enzymes are products expected to witness high demand. Acidifiers improve gut health due to their bacteriostatic and bactericidal effects. They optimize feed utilization and consequently lower costs. Enzymes improve digestion and minimize environmental impact. Acidifiers are expected to witness the highest growth i.e. a CAGR of more than 6% from 2014 to 2020, among all products. Enzymes will grow at a CAGR of more than 5% in the same period.
The greater bioavailability of organic trace minerals provides greater value to nutritionists and producers. Commercially produced organic trace minerals provide natural protection and better absorption rates. Therefore this product type is foreseen to be a key growth driver in future, witnessing a CAGR of more than 6% between 2014 and 2020.
Based on application, the global market for animal feed additives can be divided into pork, poultry, cattle and aquaculture. Since red meat is increasingly being associated with health hazards like cancer, heart disease, etc., white meat poultry is the most demanded application segment with a volume of about $5billion in 2012. However, meat from pork, beef and cattle are expected to retain their popularity especially in US, Europe and Latin America. Together, these application segments fetched more than 50% of revenues in 2012. Aquaculture will also witness strong demand in future due to growing adoption of aquaculture activities in South East Asian region and rising demand for fish and fish products.
Regionally, the animal feed additives market can be split into North America, Europe, Asia Pacific and Rest of the World (ROW). Asia Pacific is predicted to experience the fastest regional growth due to higher meat consumption and rising meat exports. The countries of China, India, Thailand and Indonesia offer huge growth potential mainly due to economic development, growing industrialization of livestock and farmer awareness, and government assistance. Argentina and Brazil are expected to be attractive markets in the Latin American region. Brazil being a leading poultry meat exporter will generate high demand for feed additives. Germany accounted for almost 10% of the global demand for animal feed additives in 2012. Germany along with Italy, UK and Eastern Europe will drive the demand in the European region in the coming years.
Rising raw material costs and unreliable supply, and diverse regional government regulations hinder the growth of global animal feed additives market.
Main players of the global animal feed additives market are Cargill Inc., BASF SE, DSM, Evonik, Kemin, Novozymes, etc. The industry is largely concentrated with leading manufacturers focusing on consolidation to widen product range and penetrate untapped markets. They are also engaged in capital investments for increasing manufacturing capacity in potentially lucrative markets.
Information Source: Grand View Research