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R&D and Innovation in Feed and Feed Manufacturing Technology

The global feed industry is characterized by the increasing demand for meat, dairy, and other livestock-based products, which, in turn, influences growth and innovations in the global feed industry.


Suraj Nagvenkar

Team Lead- Food, Beverage, Animal Feed & Agriculture
suraj.nagvenkar@marketsandmarkets.com
MarketsandMarkets Research Pvt. Ltd.


Nagesh Manepalli

Head- Food, Beverage, Animal Feed & Agriculture
manepalli.nagesh@marketsandmarkets.com
MarketsandMarkets Research Pvt. Ltd.

INTRODUCTION
The global feed industry is characterized by the increasing demand for meat, dairy, and other livestock-based products, which, in turn, influences growth and innovations in the global feed industry. Various stakeholders, including regulatory bodies, feed suppliers, distributors, key feed & feed additive manufacturers, and processing equipment and technology manufacturers, are engaged in R&D to address the modern world challenges associated with the livestock feed industry. Some areas of focus include livestock growth, improvisation of livestock health & well-being, precision feeding, efficient livestock farming practices, and identification of sustainable & effective feed additives.

FIGURE 1: FEED PHYTOGENICS MARKET STRATEGIES, 2013–2018

The significance of the growing feed industry is emphasized by the growing feed production on a global scale, which was estimated at 1.07 billion tons in 2017, according to Alltech feed survey. Growth in global feed production is substantiated by the rise in livestock population to 30,033 million by 2030 (source: FAO). Feed additives and feed manufacturing & processing technology are expected to play a critical role in the industry’s growth. Dynamics of both these industry segments are inter-related and are largely based on the increasing demand and consumption of livestock-based products, rising awareness about feed quality, standardization of livestock products owing to disease outbreaks, increasing size of livestock farms, and implementation of innovative animal husbandry practices to improve the quality of livestock products.

INNOVATIONS IN FEED
Innovation in feed is largely witnessed in additives, wherein regulatory bodies such as the European Food Safety Authority (EFSA) and the Food and Drug Administration (FDA) are constantly engaged in research and identification of sustainable feed additives. These additives are projected to partially or completely substitute harmful feed additives such as antibiotics with additives such as phytogenics and eubiotics (prebiotics, probiotics, organics acids, and essential oils).

Phytogenics are plant-based feed additives that are used in animal nutrition, sometimes also referred to as “botanicals” or “phytobiotics.” They are natural substances such as herbs, spices, and other plants & their extracts, which can be incorporated in feed to improve livestock productivity. The feed phytogenics market is estimated at USD 631.4 million in 2018 and is projected to reach USD 962.5 million by 2023, at a CAGR of 8.8%, during the forecast period.

Essential oils accounted for a dominant share of 45% to 50% in 2017 and are also projected to grow at a significant rate of 9.0% from 2018 to 2023. These oils are extracted from particular plants or plant parts. With various blends and strengths, essential oils enhance livestock performance when used with feed. They improve gut health and aid in healthy digestion in poultry. Moreover, essential oils such as cinnamon, when added to cattle feed, help reduce fermented protein, which results in increased body temperatures and greater susceptibility to heat stress. Such health benefits of essential oils have resulted in their demand from the feed industry.

FIGURE 2: EUBIOTICS MARKET SCENARIO, BY REGION

On the basis of region, the market for feed phytogenics is estimated to be largely concentrated in the Asia Pacific, followed by Europe, in terms of both value and volume. The Asia Pacific market is mainly driven by the increase in demand for quality meat products and a rise in awareness about the role of additives in animal nutrition among farmers. Additionally, alarming instances of antibiotic resistance in livestock due to continuous high-level dosage are stimulating the need for alternative antibiotics in developing countries such as India, Vietnam, and Thailand.

However, awareness about the advantages & disadvantages of feed phytogenics for usage in animal nutrition remains low, especially in developing economies. Despite R&D by several key players such as Delacon, Nutriad, BIOMIN, and Cargill, awareness regarding the application of phytogenics with respect to their benefits and dosage levels to be included in the feed of different livestock remains low, resulting in their low adoption rate.

Various strategies, including expansion & investments, acquisitions, new product launches, and agreements & partnerships, were adopted by the market players to enter new segments, increase their reach & penetration, and gain a larger share.

Expansions & investments were the dominant strategies adopted by the market players to expand their geographic and market presence, whilst expanding their consumer base. Some of the key players in this market include Delacon (Austria), Biomin (Austria), Cargill (US), DuPont (US), Adisseo (China), Dostofarm (Germany), Phytobiotics Futterzusatzstoffe GmbH (Germany), Pancosma (Switzerland), A&A Pharmachem Inc. (Canada), and Kemin Industries (US).

Another essential additive that is experiencing significant usage in the feed industry is eubiotics. Eubiotics enhance the gut health performance of livestock and promote animal health performance. It includes various types of feed additives such as probiotics, prebiotics, essential oils, and organic acids. It can be a single component or a combination of two or more than two components. The main purpose of using such eubiotics is to maintain the intestinal eubiosis, which will result in improved health status and performance in farm animals.

Among the different types of eubiotics, probiotics accounted for the largest share of ~65% in 2017, and its consumption in feed is projected to grow at the highest CAGR of ~7.5% to 8.0%, in the next five years. Probiotics in feed are important constituents as they protect animal health and increase the efficiency of nutrient utilization. Further, they pose promising alternatives to antimicrobials. The fundamental driver propelling the growth of the feed probiotics market is the ban on antibiotic growth promoters in Europe. The most widely consumed strains in feed among regions, Europe accounted for the largest share of ~30% to 35% in the global eubiotics market, and it is also projected to be the fastest-growing market in the next five years. The growth of the eubiotics market is attributed to the increasing awareness about the benefits of eubiotics, and this trend is expected to contribute to further growth. Eubiotics are an economical option for animal health and productivity and are added quite regularly in swine, poultry, ruminant, and aquatic feed. Increasing digestion, enhancing the nutritional value, and providing better feed efficiency are the most common benefits of eubiotics supplementation. The market for eubiotics is governed by the European Federation of the Animal Feed Additive Manufacturers (FEFANA) and the European Feed Manufacturers’ Federation (FEFAC).

Some of the prominent market players in the eubiotics market include Chr. Hansen A/S (Denmark), Cargill (US), BASF SE (Germany), ADDCON (Germany), Kemin Industries Inc. (US), Behn Meyer (Malaysia), DSM (Netherlands), DowDuPont (US), Novus International Inc. (US), and Beneo Group (Germany).

FEED MANUFACTURING TECHNOLOGY
Feed manufacturing technology is experiencing innovations in various segments, including processing and feeding systems. The processing of feed includes equipment for various tasks such as mixing, pelleting, grinding, and baking. The feed processing market is estimated at USD 21.61 billion in 2018 and is projected to reach USD 26.62 billion by 2023, growing at a CAGR of 4.3% during the forecast period.

The market is largely dominated by automatic feed processing equipment, and it is also projected to grow at the highest CAGR of 4.9% during the forecast period. Automatic feed processing equipment has enabled feed manufacturers to mass produce feed products with high quality and at high speeds. They are increasingly using automated systems to control complete production lines. These feed plants automatically transfer the feed load and processes along with ingredient receiving information. The benefits of automation systems include increased production rate, inventory tracking, increased operator efficiency, and high-speed process monitoring.

A significantly related market in feed processing segment is automated feeding systems. Automated feeding systems include computer-controlled feeding and mixing equipment, which include conveyors, mixers, and self-propelled wagon feeders that automatically work to feed the livestock and help in reducing human efforts. It also involves the identification and tracking of livestock, along with the safety and security of animals on the farm with the help of various types of hardware and software.

FIGURE 3: GLOBAL AUTOMATIC FEEDING SYSTEMS MARKET

By technology, the market is segmented into robotics & telemetry, RFID technology, guidance and remote sensing technology, and others (drones and thermal detectors). Among these technologies, guidance and remote sensing technology accounted for the largest share of ~35% in 2017, whereas the robotics & telemetry segment is projected to be the fastest-growing. In the automated feeding systems market, key industrial players are focusing on technological advancement of their existing products and developments to cater to the industrial needs and strengthen their market presence. Continuous advancements in automated feeding technologies—in terms of automation, real-time analysis, ease of use, and improved functionality—are generating interest among dairy farmers for these products. This, in turn, is increasing the adoption of automated feeding products in the livestock farming industry. For instance, in November 2018, Afimilk launched AfiFarm 5.3, a new market-leading product line of dairy management software, and Afi2Go Pro, a mobile app designed to provide management teams with the flexibility for optimization of herds and their productivity.

The key players in this market include GEA (Germany), DeLaval (Sweden), Trioliet (Netherlands), Fullwood Packo (UK), AfiMilk (Israel), Lely Holding (Netherlands), VDL Agrotech (Netherlands), Sum-it Computer (UK), Boumatic LLC (US), Pellon Group Oy (Finland), Davisway (Australia), and Dairymaster (US). These players adopted new product launches as the key market strategy for gaining a larger market share in their addressable markets.

CONCLUSION
As the market for feed is projected to grow at a steady rate in the coming years, the industry is yet to achieve certain defined goals and objectives, including sustainable feed ingredients/additives along with efficient feed manufacturing practices. Industry players and other stakeholders, mainly regulatory bodies of significant markets such as the European Food Safety Authority (EFSA) in Europe and the Food and Drug Administration (FDA) in the US, are making significant investments and taking R&D initiatives to achieve these definable goals. In the coming years, R&D and innovations are expected to take the feed industry one step closer toward these objectives.

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