K 318

Growth Opportunities in the Global Animal and
Pet Nutrition Ingredients Market, Forecast to 2025
Stringent Regulatory Paradigms and Consumer Awareness Regarding

Animal Feed and Pet Food Quality will Fuel Demand and Boost Innovation
Global Visionary Science Research Team at Frost & Sullivan
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April 2019
Contents
Section Slide Number

Executive Summary 8
 Key Findings 9
Market Overview 11
 Market Definitions 12
 Key Questions this Study will Answer 13
 Market Segmentation 14
 Market Segmentation Description 15
 Assumptions 17
 Value Chain Analysis 18
 Value Chain Analysis Discussion 19
Drivers and Restraints—Total Animal and Pet Nutrition Ingredients Market 20
 Market Drivers 21
 Market Drivers Explained 22
 Market Restraints 27
 Market Restraints Explained 28
Forecast and Trends—Total Animal and Pet Nutrition Ingredients Market 30
 Revenue Forecast by Segment Type 31
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Contents (continued)

 Volume Forecast by Segment Type 32
 Growth Opportunity—Category Breakdown 33
 Revenue and Volume Forecast by Segment Type Discussion 34
 Revenue Forecast by Region 35
 Growth Opportunity by Region—North America 36
 Growth Opportunity by Region—Europe 38
 Growth Opportunity by Region—Asia-Pacific 40
 Growth Opportunity by Region—Rest of the World (RoW) 42
 Competitive Landscape 43
 Key Mergers, Acquisitions, and Collaborations 44
 Competitive Landscape—Product-wise Mapping 45
Growth Opportunities and Companies to Action 51
 Growth Opportunity Overview 1—Rising Demand for High-quality Meat and Growth in
52
Aquaculture
 Growth Opportunity Overview 2—Antibiotic Alternatives Demand for Disruption 53
 Growth Opportunity Overview 3—Rising Demand for Premium Pet Food 54
 The Industry Trend—Strategic Imperatives for Success and Growth 55
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Amino Acids Segment—Growth Opportunity 56
 Growth Opportunity Dashboard 57
 Percent Revenue and Volume Forecast by Region 58
 Percent Revenue and Volume Forecast by Ingredient Type 59
 Percent Revenue and Volume Forecast by Ingredient Type Discussion 60
 Percent Revenue Forecast by End-use Industry 62
 Growth Opportunity by End-use Industry 63
 Recent Product and Technology Updates 65
Enzymes Segment—Growth Opportunity 67
 Percent Revenue Forecast by Region 69
 Percent Revenue Forecast by Ingredient Type 70
 Percent Revenue Forecast by Ingredient Type Discussion 71
Vitamin/Carotenoids Segment—Growth Opportunity 78
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 Percent Revenue and Volume Forecast by Region—Vitamins/Carotenoids 80
 Percent Revenue and Volume Forecast by Region—Carotenoids 81
Organic Acids Segment—Growth Opportunity 90
Organic Trace Minerals Segment—Growth Opportunity 100
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 Percent Revenue and Volume Forecast by Region 102
Probiotics Segment—Growth Opportunity 111
 Percent Revenue Forecast by Ingredient Type and End-use Industry Discussion 115
Others Segment—Growth Opportunity 119
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The Last Word 130
 The Last Word—3 Big Predictions 131
 Legal Disclaimer 132
Appendix 133
 Learn More—Next Steps 134
 List of Exhibits 135
The Frost & Sullivan Story 139
Author: Smriti Sharma

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Executive Summary
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Key Findings
• Animal or pet food additives are defined as nutritional ingredients that are
supplemented to improve the quality and digestibility of the feed and the performance
of animals. The primary additives considered under the scope of this research
include amino acids, vitamins/carotenoids, enzymes, organic acids, organic trace
minerals, probiotics, prebiotics, and omega-3 fatty acids.
• Growth in the demand for high-quality meat products and protein-rich diets are the
primary factors driving the demand for animal feed additives.
• Increased awareness regarding the benefits of including functional ingredients in pet
food and growth in the demand for highly premium pet food products are the key
drivers for additives in the pet food market.
• China remains the major producer and key consumer of feed additives, driving
the overall market in the Asia-Pacific (APAC) region. APAC is expected to remain
one of the major producers of compound feed, with swine and poultry sectors
dominating in terms of demand. Growth in the aquaculture sector is expected to
drive the market both regionally and globally.
• Developing economies (e.g. Latin America) are also expected to register
considerable growth in terms of the demand for feed additives owing to improving
economic conditions and increased demand for meat products.
• Regulatory stringency on the use of antibiotics is expected to shape the

animal feed additives market in the coming years. Demand for additives that
can potentially replace antibiotic growth promoters is expected to surge.
• Probiotics and prebiotics segments offer significant investment and
innovation opportunities for manufacturers active in this space.
Image Source: Pixabay Source: Frost & Sullivan
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Key Findings (continued)
The total market for animal and pet nutrition ingredients is expected to grow from $16,612.6 million in 2018 to reach
$24,178 million by 2025, recording a compound annual growth rate (CAGR) of 5.5% during the period.
Volume demand is expected to record a CAGR of 4.7% until 2025, reaching 6,525.2 kilo metric tons by 2025, with
the majority of this demand coming from the poultry and swine sectors.
North America accounted for 23.4% of the total animal and pet food ingredients market in 2018. The region is
expected to register a CAGR of 5.1% until 2025. Poultry remains the key driver in the region.
Europe accounted for 27.4% of the total animal and pet food ingredients market in 2018. The region is expected to
register a CAGR of 5% until 2025.
APAC accounted for 33% of the total animal and pet food ingredients market in 2018. The region is expected to
record a CAGR of 6.1% from 2018 to 2025, with China as the primary growth driver.
Rest of the World (RoW) accounted for 16.1% of the total animal and pet food ingredients market in 2018. The
region is expected to record a CAGR of 5.7% until 2025, with Latin America as the primary growth driver due to a
surge in feed production activities.
While competitive landscapes for the individual ingredient categories vary, the value chain for animal feed and pet
food additives has seen significant consolidation in the past few years, with manufacturers seeking to offer one-stop
solutions to their customers by vertically integrating the lines of business to offset competition.
In general, the market is fragmented with a number of Chinese manufacturers competing with major global
manufacturers such as DSM, ADM, BASF, Cargill, Novus International, Evonik, and DuPont.
Source: Frost & Sullivan
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Market Overview
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Market Definitions
Scope
Geographic Coverage Global
Study Period 2015–2025
Base Year 2018
Forecast Period 2019–2025
Monetary Unit US Dollars
Volume Unit Metric Tons
Conversion Rate €1.00 = $1.11
• This research covers the global animal and pet nutrition ingredients market. The regions covered include North America,
Europe (Germany, France, Italy, Spain, UK, and rest of Europe), Asia-Pacific (China, India, Southeast Asia, Japan, and
Australia), and Rest of the World (Middle East, Africa, and Latin America (including Mexico)).
• The study is segmented into amino acids, enzymes, vitamins/carotenoids, organic acids, organic trace minerals, probiotics,
and others (including omega-3 fatty acids and prebiotics).
• The end-use industries included in the scope of this research include: livestock (including poultry, swine, and ruminants),
aquaculture, and others (including pet and equine).
• All revenue is calculated in US dollars.
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Key Questions this Study will Answer
What are the growth What are key micro What are the key Which are the
opportunities with and macro factors technological and product emerging players and
respect to feed and impacting the growth innovations in animal and what are the product
pet nutritional of individual product pet nutrition ingredients, and technology
ingredients? What are segments? How are and what is their future innovations being
the key emerging they going to impact impact? How will emerging targeted by the key
ingredients being the demand for regulations impact the participants in the
focused on for animal animal feed and pet market in the near future? individual product
feed and pet nutrition? ingredients in the segments?
near future?
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Market Segmentation
Total Animal and Pet Nutrition Ingredients Market: Market Segmentation, Global, 2018
Ingredients*
Vitamins and Organic Trace

Amino Acids Enzymes Organic Acids Probiotics Others
Carotenoids Minerals
Lysine Carbohydrases Vitamin E Single Acids Zinc Prebiotics
Omega-3 Fatty
Methionine Proteases Vitamin A Blends Iron
Acids
Threonine Phytases Vitamin D Copper
Vitamin B
Tryptophan Manganese
Complex
Valine Carotenoids Others
*Please note that in the report, these ingredients—when used for animal feed applications—are also referred to as feed additives.
Thus, the term—feed additives—primarily refers to the disclosed nutritional ingredients. Source: Frost & Sullivan
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Market Segmentation Description
Total Animal and Pet Nutrition Ingredients Market: Market Segmentation Description, Global, 2018
Animal and Pet

Nutrition Ingredients Description
• Amino acids are the building blocks of the protein structure. The chemical structure of amino
acids comprises an amine group and a carboxyl functional group, in addition to a side chain
specific to each amino acid. Amino acids can exist in both D- and L-forms. L-amino acids are
Amino Acids required for most of the commercial applications.
• The primary amino acids included in the scope of this research are: lysine, methionine, threonine,
tryptophan, and valine.
• Enzymes are macromolecules composed of polymers of amino acids connected by amide

Enzymes bonds. The primary enzymes used in animal feed are protease, phytase, and carbohydrase
(including amylase, xylanase, cellulase, and beta-glucanase).
• Vitamins are low-molecular-weight organic compounds required in small quantities for growth and
development. They are broadly segmented into fat-soluble and water-soluble categories. Fat-
soluble vitamins considered in the scope of this research include Vitamins A, D, and E; and water-
Vitamins and soluble vitamins include Vitamin B-complex and choline chloride.
Carotenoids • Carotenoids are the plant pigments responsible for imparting color to leaves, flowers, and fruits.
There are more than 600 known carotenoids that fall into either xanthophyll or carotene category.
The carotenoids considered relevant to the scope of this research include β-carotene,
astaxanthin, and others (lycopene).
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Market Segmentation Description (continued)
Total Animal and Pet Nutrition Ingredients Market: Market Segmentation Description, Global, 2018
Animal and Pet

Nutrition Ingredients Description
• Organic acids are generally used as feed acidifiers. The primary organic acids included in the
Organic Acids scope of this research are: formic acid, propionic acid, lactic acid, and others (benzoic acid, citric
acid, fumaric acid, butyric acid, and malic acid).
• Trace minerals provide the essential nutrients animals need for metabolic functions such as
growth and development, immunity, and reproduction. Broadly, trace minerals are categorized as
Organic Trace
inorganic and organic; and include zinc, copper, iron, manganese, and others (including selenium
Minerals
and cobalt). The scope of this research covers organic trace minerals including zinc, iron, copper,
manganese, and others (selenium, chromium, and cobalt) being used in the animal feed industry.
• Probiotics are live microbial feed supplements that beneficially affect the host by improving
Probiotics intestinal microbial balance. Different bacterial and yeast strains are primarily being used as feed
additive.
• The ‘Others’ category includes the omega-3 fatty acids and prebiotics being used as an additive
in animal feed and pet food.
• Omega fatty acids are polyunsaturated fatty acids that are essential for animal feed and include
Others omega-3 fatty acids such as EPA and DHA.
• Prebiotics are defined as non-digestible fibers that, when fermented, stimulate the growth of
favorable bacterial colonies in the gut of the host. The types of prebiotics included in the scope of
this research are: inulin and other oligosaccharides.
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Assumptions
Managed Care Strategies

• Historical ingredient consumption trends in the animal feed and pet food sectors
Assumptions
• Historical production and consumption trends of compound feed across geographies
for Volume
Demand • For forecasting, expected growth in livestock and aquaculture sectors in terms of production
and consumption
• Regional GDP growth expectations
• Growth trends in regional markets
• Historical price trends

Assumptions
• Regulatory environment
on Price and
Revenue • Inflation rates and increasing raw material and energy prices
• Changing macroeconomic trends for major manufacturing countries
• Patent analysis has been conduced only on Google Patents and restricted by the priority
Assumptions date for the last two years (i.e., 1 January 2016 to 1 August 2018).
on Patent
• It does not represent the overall set; and is merely a representation to highlight some key
Trends
patents filed during the period to shed light on the technology focus.
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Value Chain Analysis
Total Animal and Pet Nutrition Ingredients Market: Value Chain, Global, 2018
Speciality Feed Additives / Pet Key Companies

Food Ingredient Manufacturers
Speciality Feed Additives / Pet Food Ingredient

Premix Producers / Manufacturers
Private Label (most of these also provide speciality additives
Distributors for human use and aquaculture)
Manufacturers (with
in-house nutritionists) Companies include Kemin Industries, Cargill, BASF,
DuPont, DSM, Adisseo, Novus International,
Lallemand Animal Nutrition, Evonik, Alltech, ADM,
and others.
Compound Feed/Pet Food
Manufacturers/ Private Label Animal and Pet Premix Producers
Manufacturers (with in-house Companies include Trouw Nutrition (part of
nutritionists) Nutreco), ADM, Devenish Nutrition, Avitech
Dominant route Nutrition, Royal Agrifirm Group, and others.
highlighted in
bold Compound Feed and Pet Food Manufacturers
Brand Owners (demand for brands is more common in the pet
food industry than in the animal feed industry)
Pet food companies include Mars, Nestle, Hill's Pet
Nutrition Inc., The J.M. Smucker Company, and
Products on the Shelf / Online
Blue Buffalo Co., Ltd. among others.
Marketplaces
Compound feed manufacturers include Tyson Foods,
Key ForFarmers N.V., and Nutreco, among others.
Supply chain Vertical integration Source: Frost & Sullivan
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Value Chain Analysis Discussion
In the feed additives market, specialty ingredient suppliers are adopting vertical integration routes to offer
both ingredients and premixes, tapping into a larger premix business opportunity. The trend is especially
prevalent in the vitamin and trace mineral segments, where vitamin manufacturers are also offering vitamin
and mineral premixes, thereby competing with their traditional consumers.
As the pork and poultry industry becomes highly integrated in its production processes, there is an increased
willingness among animal feed manufacturers to buy specialty ingredients directly. There is a lower demand
for premixed blends among animal feed manufacturers that own their feed mills and have in-house
nutritionists. They buy vitamins and other additives through distributors and perform in-house mixing.
However, such activities are limited as they require in-house knowledge. The industry is expected to witness
higher levels of vertical integration in future.
Compound feed manufacturers are also looking at vertical integration, with companies such as Tyson Foods
and Nutreco integrating operations offering compound feed, additives, and premixes; and providing one-stop
solutions to their customers, overcoming competition. Tyson Foods, in 2018, announced its plans to buy
poultry rendering and blending assets of American Proteins and AMPRO Products. The acquisition will
enable the company to recycle animal products for feed, pet food, and aquaculture, helping it expand its
presence in the animal feed ingredient business.
With respect to pet food manufacturers and brand owners, companies are trying to vertically integrate their
operations through mergers and acquisitions. In 2017-2018, the industry witnessed significant activities with
respect to integrations, especially in the pet food sector. For example, ADM acquired Crosswind Industries, a
manufacturer of contract and private label pet food and treats; CJ Foods, a custom manufacturer of premium
pet food, acquired Lortscher Animal Nutrition, a custom milling and ingredient supplier.
Ingredient manufacturers are penetrating into other parts of the supply chain. For instance, companies are
trying to align their distribution channels, dispensing with the need for third-party suppliers. As per some of
the market participants, in future, the industry will witness some high-level mergers focused on providing on
on-stop solutions to customers.
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Drivers and Restraints—Total Animal and Pet
Nutrition Ingredients Market
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30 December 2016
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Market Drivers
Total Animal and Pet Nutrition Ingredients Market: Key Drivers, Global, 2019–2025
Drivers 1–2 Years 3–4 Years 5–7 Years
Growing per capita consumption of meat products with high

demand for animal protein will drive the demand for feed additives, H H H
especially amino acids.
Strong growth in the livestock feed industry in developing regions

with emerging demand for aquaculture feed will fuel the demand for H H M
feed ingredients.
Regulatory ban on the use of antibiotics as growth promoters in

M H H
animal feed is expected to drive the demand for antibiotic alternatives.
Rising demand for premium pet food will drive the demand for highly
M H H
specialized ingredients.
Rising consciousness among owners regarding the health of their

M H H
pets is expected to drive the demand of functional ingredients.
Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan
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Market Drivers Explained
Growing per Capita Consumption of Meat Products With High Demand for Animal Protein will
Drive the Demand for Feed Additives, Especially Amino Acids
• According to the United Nations Food and Agriculture Organization (FAO), the per capita meat consumption in developing
economies is expected to increase from 26.8 kilograms in 2017 to 28 kilograms by 2025. Similarly, the per capita meat
consumption in developed nations is expected to rise from 67.2 kg in 2017 to 69.2 kg by 2025. This growth in demand is
expected to primarily stem from population and income growth especially in Asia-Pacific, Latin American, and Middle Eastern
countries. Such growth in the demand for animal protein is expected to drive the demand for feed additives, such as amino
acids. This aids in improving the feed conversion ratio and, in turn, the protein concentration.
• To meet the growing demand for high-quality meat and other animal products, there is increased pressure on farmers to
improve quality, productivity and sustainability. Thus, to meet the quality and productivity directives, the practice of
supplementing diets with additives such as vitamins, amino acids, organic acids, enzymes, pigments, and probiotics is
expected to intensify. There is also a growing shift toward landless commercial production systems, which further drives the
need for supplementing diets with additives that can promote healthy and faster growth and improve the feed conversion ratio.
Strong Growth in the Livestock Feed Industry in Developing Regions with Emerging Demand
for Aquaculture Feed will Fuel the Demand for Feed Ingredients
• According to the 2018 Alltech Global Feed Survey, 1.07 billion tons of animal feed was produced in 2017, registering an
average annual growth of 2.6% in 2017 compared to 2016. With respect to species-specific growth, broiler and dairy feed
registered an average annual growth rate of 3%, whereas pig feed showed an average annual growth of 6% in 2017 (with
China being the largest producer of pig feed). Such strong growth in the industry is expected to continue, driven by the
growing demand for meat, milk, and eggs, especially in the developing regions.
Source: FAO; Alltech; Frost & Sullivan
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Market Drivers Explained (continued)
Strong Growth in the Livestock Feed Industry in Developing Regions with Emerging Demand
for Aquaculture Feed will Fuel the Demand for Feed Ingredients (continued)
• Additionally, there is an emerging demand for high-quality compound feed from the aquaculture sector. Driven by rising
awareness on the health benefits of fish and fish-derived products, global fish production has picked up pace in the last couple
of years. According to GLOBEFISH estimates, the aquaculture sector is projected to grow at the rate of 2.2% from 2017 to
2026. According to FAO estimates, more than 87% of this growth is expected to originate from Asian countries, with China
dominating production. Other than China, regions such as Latin America are expected to record stable growth in the
aquaculture sector until 2030; thus, driving the demand for feed additives.
• The impact of this driver is expected to reduce in the long run, as the demand for meat products stagnates, especially in
developed regions, with trends such as veganism pervading the market. Countries, such as China, are also expected to
witness reduced meat demand in future (the Chinese government recommends the citizens to cut down on meat consumption
as part of the 2016 dietary guidelines).
Regulatory Ban on the Use of Antibiotics as Growth Promoters in Animal Feed is Expected to
Drive the Demand for Antibiotic Alternatives
• The recent ban by the United States Food and Drug Administration (FDA) on use of antibiotics as growth promoters and
imposition of Veterinary Feed Directive (VFD) have disincentivized both manufacturers and consumers using antibiotics for
growth promotion.
• Regulatory stringency in other regions—such as Indonesia and Vietnam that have banned the use of antibiotic growth
promoters (AGPs) in 2018 and Europe where these are already been banned—along with growing awareness on the residual
effect of these antibiotics in animal products are some of the key drivers of the demand for AGP alternatives.
• Use of organic acids as AGP alternatives has gained considerable traction. Organic acids have antimicrobial properties that
not only aid in feed preservation but can also be effective in reducing bacterial content and improving nutrient digestibility.
These thus help in maintaining animal health and increase their performance.
Source: FAO; GLOBEFISH; Frost & Sullivan
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Regulatory Ban on the Use of Antibiotics as Growth Promoters in Animal Feed is Expected to
Drive the Demand for Antibiotic Alternatives (continued)
Alternatives to Antibiotics for Use in Animal Agriculture
• Other than organic acids, ingredients such as
probiotics, prebiotics, phytochemicals, and trace Cattle
minerals can be potentially applied in animal feed Ingredient
Swine Chicken
Type Milk-fed Dairy Beef
as an alternative to AGPs. A comprehensive pool
Calves Cows Cattle
of scientific evidence and continuous
Probiotics
commercialization efforts by companies along Prebiotics
with growing awareness among consumers on Organic Acids
the need for antibiotic alternatives are expected In-feed
to drive the demand for these ingredients. Enzymes
Phytochemicals
• The adjacent table highlights the efficacy of (e.g., essential
different antibiotic alternatives in different animal oils)
species. Minerals
(Copper, Zinc,
and heavy
metals)
Growth promotion, strong scientific evidence Growth promotion, some scientific
for efficacy, and commercially used evidence suggests potential efficacy
Disease prevention, strong scientific Disease prevention, some scientific
evidence for efficacy, and commercially evidence suggests potential efficacy
used
Disease treatment, strong scientific Disease treatment, some scientific
evidence for efficacy, and commercially evidence suggests potential efficacy
used
Evidence suggesting lack of efficacy Source: Pew Charitable Trust, Frost & Sullivan
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Rising Demand for Premium Pet Food will Drive the Demand for Highly Specialized
Ingredients
• A growing demand for pet food products have a strong focus on health. Pet owners are looking for labels that would claim
functional benefits similar to what human food products would claim. According to a consumer survey conducted in 2017,
70% of consumers in the US believe that pet treats, a form of pet food, with functional benefits play an important role in
managing their pets’ health, and 71% look for treats that address health concerns or offer extra nutrition.
• Growing awareness among pet owners and an increased sense of responsibility toward their pets are further expected to
drive the demand for premium products. Thus, the demand for nutritional ingredients—such as probiotics, prebiotics,
essential fatty acids, and proteinated minerals—that can offer additional health benefits for pets is on the rise. According to
the American Pet Products Association (APPA), pet owners in the US spent $69.5 billion on their pets in 2017 (up from
$66.7 billion 2016), with pet food dominating the sales. According to the report, the demand for high-end, premium pet treats
remains the key driver of increased spending in the pet food category.
• Humanization of the industry has made pet owners very specific in their choices with respect to nutritional contents and
quality. Thus, the demand for customized pet formulations directed toward specific age, breed, and size is expected to
increase. This in turn is expected to drive the demand for highly specific and functionally targeted ingredients. For instance,
adult dogs are prone to kidney problems, and diets excess in dietary phosphorus, protein, and salt can potentially exacerbate
the progression of kidney damage. Thus, diets are formulated such that concentration of these ingredients is kept under
check. In general, diets for protecting kidney damage are rich in amino acids and vitamins with a high concentration of trace
minerals. Similarly, breeds such as Labrador Retrievers, Golden Retrievers, Cairn Terriers, and Cocker Spaniels are prone to
obesity. Thus, the diets formulated for these breeds are generally required to be rich in protein. These are highly concentrated
with amino acids, with taurine being one of the most crucial ingredients.
Source: APPA, Waltham, Frost & Sullivan
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Rising Consciousness Among Owners Regarding the Health of Their Pets is Expected to
Drive the Demand of Functional Ingredients
• A 2017 clinical survey by the Association for Pet Obesity

Prevention’s (APOP) revealed that 56% of dogs and 60% Consequences of Excess
of cats in the US were classified as clinically overweight or Fat in Dogs and Cats
obese by their veterinary healthcare professionals. As
dietary management remains the primary tool for the CONSEQUENCES OF EXCESS FAT
treatment and prevention of obesity, demand for weight IN DOGS AND CATS
management ingredients is expected to rise with a growing
customer focus on high-protein and fiber-rich diets.
Reduced life expectancy
Diminished Quality of Life Skin
• Similarly, according to Banfield Pet Hospital’s 2017 State Disorders
of Pet Health Report, parasitic infection is very common
among both cats and dogs and is one of the key reasons Orthopedic
Chronic
for diarrhea and vomiting. A high prevalence of gastric Inflamation Disease
problems tends to drive the demand for functional
ingredients such as probiotics and prebiotics. Probiotics
are defined as live microorganisms that, when ingested, Kidney
Dysfunction Cancer
help in maintaining healthy gut microflora and promote
immune and digestive health. Studies have also Respiratory Metabolic and
established the role of probiotics in the treatment and Disorders Endocrine
Disorders
prevention of gastric disorders (e.g., diarrhea).
• Rising health consciousness among consumers is expected to drive the demand for ingredients associated with health and
functional claims such as antioxidants, omega-3 fatty acids, and phytonutrients (e.g. carotenoids).
Image Source: APOP Source: APOP; Banfield, Frost & Sullivan
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Market Restraints
Total Animal and Pet Nutrition Ingredients Market: Key Market Restraints, Global, 2019–2025
Restraints 1–2 Years 3–4 Years 5–7 Years
Volatile additive prices can negatively impact the demand for

H H H
ingredients.
A stringent regulatory framework in developed regions and

disparity between developed and developing regions could H H M
potentially restrain the demand for animal feed.
Growing demand for superfoods in pet nutrition coupled with the

trend of using limited-ingredient diets will restrain the demand for M H H
processed pet food products.
Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan
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Market Restraints Explained
Volatile Additive Prices Can Negatively Impact the Demand for Ingredients
• Increase in feed ingredient prices can negatively impact demand, as the animal feed industry is highly price-sensitive. For
example, companies such as BASF and DSM, in 2017, reported a hike in the prices of Vitamins A and E, which led Chinese
manufacturers to increase the prices of almost all vitamin categories. This created a strong pressure on animal feed and pet
food manufacturers. BASF quoted a price increase of 20% globally, whereas Chinese manufacturers quoted a much higher
price increase for a range of feed vitamin categories. This led feed formulators to reduce the concentration of vitamins in
feed, negatively impacting demand.
• Raw materials and energy prices play an important role in regulating ingredient prices. For example, according to the US
Department of Agriculture (USDA), corn prices are expected to increase from $3.3 per bushel in 2017 to $3.5 per bushel by
2021, impacting the prices of feed additives (e.g., L-lysine) primarily manufactured through the fermentation of sugar crops
such as corn. Such price volatility is a key market restraint.
• The other factors expected to restrain market growth include changing macroeconomic trends in major feed additive markets.
For example, changing trade relations between the US and China are expected to impact the supply of feed ingredients.
Moreover, the stringent environmental regulations being imposed by the Chinese government are expected to impact the
demand and supply dynamics, as China is one of the largest producers of animal feed additives. Furthermore, the Brexit is
expected to impact trade relations with the European Union and United Kingdom. However, it remains to be seen how these
factors influence the animal feed additives industry in the region going forward.
Source: BASF; US Department of Agricultural Outlook; Frost & Sullivan
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Market Restraints Explained (continued)
A Stringent Regulatory Framework in Developed Regions and Disparity Between Developed

and Developing Regions Could Potentially Restrain the Demand for Animal Feed
• Stringent regulations with respect to feed additives in both the US and Europe and disparity between the regulations in
developed and developing regions are expected to negatively impact free trade among nations. For instance, a recent
regulation in the European Union (EU) has suspended the authorization of using ethoxyquin (EQ), an antioxidant used in
animal feed and pet food. As such bans have not been implemented in other countries, countries exporting feed additives
containing EQ will witness a decline in the demand for such ingredients, especially from European countries. However,
considering that developing countries always follow developed nations with respect to regulatory framework evolution, such
disparities are expected to reduce in the long run.
• Recently, China has implemented stricter regulations governing the feed additives imported by the country. The Chinese
government has made it obligatory for countries exporting feed additives of non-plant or animal origins to China to seek the
approval of the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of
China (ASIQ). Such stringent regulations can impact demand supply dynamics, thereby also affecting the prices of additives.
Growing Demand for Superfoods in Pet Nutrition Coupled with the Trend of Using
Limited-ingredient Diets will Restrain the Demand for Processed Pet Food Products
• While humanization is expected to drive the demand for highly specialized and premium functional pet food products, the trend
is also driving owners to feed their pets what they would eat themselves. This is highly prevalent in both developed and
developing regions, where dog and cat owners prefer feeding their pets natural and whole food.
• Furthermore, growing awareness on clean labels and rising trend of no-additive or limited-ingredient diets are expected to
restrict the demand for processed food products.
• Additionally, with the growing demand for whole food and superfoods (such as peas, salmon, flaxseed, sweet potatoes, alfalfa,
blueberries, and cranberries), deemed as rich in nutrients and offering several health benefits, a downward trend is expected
for processed food products. Source: ASIQ; Frost & Sullivan
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Forecast and Trends—Total Animal and Pet Nutrition
Ingredients Market
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K318-88 30
Revenue Forecast by Segment Type
Key Takeaway: Amino acids and vitamins/carotenoids dominate the total animal and pet nutrition
ingredients market, and this is expected to continue until 2025.
Total Animal and Pet Nutrition Ingredients Market: Revenue Forecast by Category, Global, 2015–2025
30,000.0
25,000.0
Revenue ($ Million)
20,000.0
15,000.0
10,000.0
5,000.0
CAGR
0.0 (2018–2025)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Others* 470.3 500.0 531.9 566.1 602.8 642.3 685.0 730.9 780.3 833.5 890.7 6.7%
Probiotics 517.6 554.1 593.3 635.4 680.5 729.1 781.4 837.7 898.4 964 1,033.8 7.2%
Organic Trace Minerals 602.9 638.2 675.9 716.2 759.1 804.9 853.7 905.7 961.4 1,021 1,084.0 6.1%
Organic Acids 1,934.8 2,039.8 2,151.1 2,269.4 2,394.7 2,527.6 2,668.6 2,817.6 2,975.7 3,143 3,319.8 5.6%
Vitamins/Carotenoids 3,419.6 3,539.3 3,663.4 3,793.2 3,928.4 4,069.7 4,217.4 4,372.2 4,534.3 4,703 4,878.1 3.7%
Enzymes 1,064.8 1,128.9 1,197.2 1,270.0 1,347.5 1,430.1 1,518.3 1,612.5 1,713.2 1,821 1,935.0 6.2%
Amino Acid 6,224.5 6,579.7 6,958.2 7,362.3 7,792.6 8,251.1 8,739.8 9,260.3 9,816.3 10,409 11,036.6 6.0%
Total 14,234.5 14,980.1 15,771.0 16,612.6 17,505.6 18,454.7 19,464.2 20,536.7 21,679.6 22,893.5 24,178.0 5.5%
*Others include prebiotics and omega-3 fatty acids
Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan
K318-88 31
Volume Forecast by Segment Type
Key Takeaway: The volume demand for amino acids outperforms the demand for any other
nutritional ingredient, with lysine and methionine dominating the market.
Total Animal and Pet Nutrition Ingredients Market: Volume Forecast by Category, Global, 2015–2025
7,000.0
6,000.0
5,000.0
Volume (Kilo MT)
4,000.0
3,000.0
2,000.0
1,000.0
CAGR
(2018–2025)
0.0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Organic Trace Minerals 221.3 229.4 238.0 247.0 256.3 266.1 276.4 287.2 298.5 310.4 322.8 3.9%
Vitamins/Carotenoids 437.6 448.4 459.6 471.0 482.6 494.7 507.2 520.2 533.8 547.9 562.3 2.6%
Amino Acid 3,493.6 3,660.7 3,836.4 4,021.6 4,217.0 4,423.1 4,640.6 4,870.5 5,113.7 5,370.8 5,640.0 5.0%
Total 4,152.4 4,338.5 4,534.0 4,739.6 4,955.9 5,183.9 5,424.3 5,677.9 5,946.1 6,229.1 6,525.2 4.7%
*The volume demand analysis does not contain volume figures for enzymes, organic acid, probiotics, and other ingredients
K318-88 32
Growth Opportunity—Category Breakdown
Key Takeaway: Increase in per capita meat consumption and improving economic conditions in
developing countries, along with strict regulatory requirements for feed ingredients, will drive
market growth.
Total Animal and Pet Nutrition Ingredients Market: Revenue and Volume Forecast by Category,
Global, 2018–2025
Revenue ($ Million) Total Animal and

Total Animal and Volume (Kilo MT)
Pet Nutritional
Pet Nutritional CAGR Ingredient CAGR
Ingredient Category 2018 2025 (2018–2025) Category 2018 2025 (2018–2025)
Total Revenue 16,612.6 24,178 5.5% Total Volume 4,739.6 6,525.2 4.7%
Amino Acids 7,362.3 11,036.6 6.0%
Amino Acids 4,021.6 5,640 5.0%
Enzymes1 1,270.0 1,935.0 6.2%
Vitamins/
Vitamins/Carotenoids 3,793.2 4,878.1 3.7% 471.0 562.4 2.6%
Carotenoids
Organic Acid1 2,269.4 3,319.8 5.6% Organic Trace
247.0 322.8 3.9%
Organic Trace Minerals
716.2 1,084 6.1%
Minerals
Probiotics1 635.4 1,033.8 7.2%
Others1 566.1 890.7 6.7%
1The volume demand analysis does not contain volume figures for the marked ingredients
K318-88 33
Revenue and Volume Forecast by Segment Type
Discussion
Rising disposable • Growth Levers: Growth in the animal and pet nutrition ingredients market is primarily attributed to improving
income in emerging economic conditions in developing regions, such as Latin America, and rising disposable income in
and developing Asia-Pacific countries such as India and China. Changing economic conditions and rising demand for meat
economies and products globally are the key factors impacting the feed ingredients market.
growing demand for
• Rising consciousness among pet owners and humanization of pet food industry are the primary factors
high-quality meat
driving the growth of nutritional ingredients.
products are the key
drivers. • Key Challenges: Price volatility is the key restraint in the animal feed market, which brings down the
Price volatility demand for these ingredients. Moreover, some markets (such as EU and, to a certain extent, North
impacts demand in America) have reached a level of maturity, stalling the growth of the sector. Innovation is key for boosting
this sector. growth in these markets.
The amino acids • Key Segments: The overall market for animal and pet nutrition ingredients is expected to witness moderate
segment dominates growth, from $16.61 billion in 2018 to $24.18 billion by 2025, recording a CAGR of 5.5%.
the global animal • Amino acid dominates the market, in terms of both value and volume, given its widespread demand in the
and pet nutrition feed sector globally. Owing to the stringent regulations governing the use of antibiotics in feed, demand for
ingredients market alternatives, such as organic acids, organic trace minerals, probiotics, and prebiotics, is expected to rise
both in terms of significantly.
value and volume in • There is also a growing interest in exploring the use of enzymes in the feed sector. The segment is
2018. expected to register considerable growth, especially in developing regions.
• Key End-use Industry: Market growth is primarily driven by a high volume demand for ingredients in the
Poultry is expected to livestock sector. Poultry dominated both in terms of demand and market value in 2018, and this is expected to
record a CAGR of continue during the forecast period owing to a shift in consumer preferences toward poultry meat. The
5.9% until 2025 and aquaculture sector is expected to offer significant opportunities for ingredient manufacturers owing to the rising
reach a market value demand for seafood.
of $9.92 billion by • The trend of feeding pets raw and whole food is expected to reduce the demand for some ingredients, whereas
2028. the demand for functional ingredients, such as probiotics and prebiotics, is expected to witness considerable
growth.
K318-88 34
Revenue Forecast by Region
Key Takeaway: China, a key producer and consumer for most of the animal feed ingredients, is
expected to remain a key driver for the APAC market. Mexico and other Latin American countries are
expected to record considerable growth, driven by improving economic conditions and increasing
demand for animal products.
Total Animal and Pet Nutrition Ingredients Market: Revenue Forecast by Region, Global, 2015–2025
30,000.0
25,000.0
Revenue ($ Million)
20,000.0
15,000.0
10,000.0
5,000.0
CAGR
(2018–2025)
0.0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
RoW 2,283.8 2,406.4 2,536.8 2,676.1 2,823.5 2,980.4 3,147.7 3,326.1 3,516.2 3,718.7 3,933.7 5.7%
APAC 4,616.9 4,887.4 5,175.7 5,483.9 5,813.1 6,164.5 6,540.3 6,941.9 7,372.0 7,832.0 8,322.3 6.1%
Europe 3,953.5 4,144.5 4,345.9 4,558.9 4,783.4 5,021.0 5,272.4 5,537.2 5,818.0 6,113.7 6,424.3 5.0%
North America 3,380.4 3,541.9 3,712.6 3,893.7 4,085.6 4,288.8 4,503.8 4,731.5 4,973.5 5,229.1 5,497.6 5.1%
Total 14,234.5 14,980.1 15,771.0 16,612.6 17,505.6 18,454.7 19,464.2 20,536.7 21,679.6 22,893.5 24,178.0 5.5%
K318-88 35
Growth Opportunity by Region—North America
• Growth Levers: According to FAO estimates, per capita meat consumption in North America is
expected to reach 100 kg per person per year by 2025 from 85 kg per person per year in 2015. In
addition to the growing demand for meat products, the FAO has projected a year-on-year growth
rate of 2.8% in 2017 for meat production in the US, with poultry dominating the growth. Moreover,
as per the United States Department of Agriculture’s recent Cattle Inventory Report, cattle and
calves count showed an increase of 1% in 2018 compared to 2017.
• Stable growth in livestock production and steady demand for meat products are expected to drive
Stable growth in
the market for feed additives in the region.
animal production
and demand for • In addition to animal feed, demand from the pet food industry in the region is expected to grow.
meat products are According to the 2018 Alltech Global Feed Survey, the US is the largest pet food producing country
the key drivers. and is expected to witness an increase in pet ownership. According to the 2017 APPA National Pet
Owners’ Survey, 68% of households in the US have a pet as of 2017. The survey results indicate
that this trend will maintain an upward curve in the coming years. Thus, increase in the rate of pet
ownership with growing awareness among consumers regarding the quality and benefits of health
ingredients is expected to drive the demand for nutritional ingredients in the region.
• Key Ingredient Type: The amino acids segment dominated the NA animal and pet nutrition
ingredients market with a share of 37.8% in 2018, followed by vitamins/carotenoids and organic
acids.
The amino acids • The NA animal and pet nutrition ingredients market is expected to grow from $3,893.7 million in
segment dominated 2018 to reach $5,497.6 million by 2025, recording a CAGR of 5.1%.
the NA market in
2018; Probiotics is • Regulatory Push: The recent ban on the use of clinically important antibiotics in animal feed in the
expected to register US and rising demand for antibiotic-free meat products are the key factors fueling the growth of
highest CAGR of antibiotic alternatives, such as probiotics and organic acids, in the region.
7.5% until 2025.
Source: FAO; USDA; Alltech; FEDIAF, APPA Frost & Sullivan
K318-88 36
Growth Opportunity by Region—North America (continued)
• Key End-use Industry: The US is the largest producer of poultry meat followed by China, EU,
and Brazil (as per FAO 2016 statistics). The FAO highlights that the region could witness a shift
in demand, with consumers moving toward poultry meat as opposed to beef. Poultry, which
accounted for the largest share in the NA animal and pet nutrition ingredients market in 2018, is
expected to register a CAGR of 5.5% from 2018 to 2025.
• Despite a shift in the consumption demand, the US continues to be a major producer of beef.
Poultry is the key This is expected to drive stable growth of cattle feed additives in the region. The ruminants
end-use industry sector is expected to register a CAGR of 4.6% until 2025.
in the region and
expected to • With respect to pet food ingredients, the market is primarily driven by the demand for functional
register a CAGR of ingredients such as probiotics, prebiotics, and omega-3 fatty acids. Growing consumer
5.5% from 2018 to awareness and the trend of using highly premium pet food products are the key motivators for
2025. manufacturers to market pet treats rich in highly specialized and functional ingredients.
Source: FAO; USDA; Alltech; Frost & Sullivan
K318-88 37
Growth Opportunity by Region—Europe
Key Takeaway: Meat consumption in the EU is projected to stabilize during the forecast period.
However, poultry production is expected to record the highest increase (by 3.8%) between 2015 and
2025, which will remain the key growth driver in the region.
Projected Per Capita Meat Consumption, Projected Change in Production,

Europe, 2017–2025 Europe, 2025 vs. 2015
1.8 1.9 2.0

70.0
10.8 10.5
Percentage Change in Production

10.2
Per Capita Meat Consumption (Kg)
60.0 Poultry Beef & Pig Sheep/Goat

Veal
50.0 3.8*%
24.1 24.5 24.8
1.7*
40.0
%
30.0
-3.9*%
20.0
31.9 31.8 31.5 Stable
10.0
0.0 2015 2025 2015 2025 2015 2025 2015 2025

2017 2020 2025
Pigmeat Poultry Beef/Veal Sheep/Goat
*Key: The Base values of 2015 not highlighted, the value is a % change expected by 2025 compared to 2015 Source: EU Agricultural Outlook; FEFAC; Frost & Sullivan
K318-88 38
Growth Opportunity by Region—Europe (continued)
Stable growth of • Growth Levers: The European Commission (EC) projects the demand for processed meat to spur during the
livestock and forecast period. This, in turn, is expected to drive the market for feed additives. Moreover, looking at the
compound feed historical trend of compound feed production, steady growth is expected until 2025, which will account for
production is stable demand for feed additives in the region.
expected to drive a • More than domestic demand, rise in the demand for meat products in developing regions is expected to
steady demand for contribute to Europe’s meat exports. However, changing consumer preferences and a shift toward veganism is
feed additives. expected to create volatility in demand.
• Key Ingredient Type: Amino acids accounted for a 38.8% share in the European animal and pet nutrition
The amino acids ingredients market in 2018, followed by vitamins/carotenoids and organic acids. The probiotics segment is
segment dominated expected to record the highest CAGR of 6.5% until 2025, driven by an increased demand for antibiotic
the market in 2018, alternatives in the animal feed sector and growing use of probiotics in pet food.
with feed enzymes • The overall market for European animal and pet nutrition ingredients is expected to reach $6,424.3 million by
and probiotics 2025, recording a CAGR of 5%.
expected to record • Regulatory Challenges: Stringent regulations governing feed quality and strict registration requirements for
the highest growth feed additives in the EU pose a key challenge for foreign and local ingredient manufacturers. Moreover, trade
rates until 2025. barriers due to the Brexit are expected to impact the feed industry. However, its impact on ingredient
manufacturers is yet to be ascertained.
• Key End-use Industry: The poultry and swine sectors play a key role in regulating the overall demand for
The market for poultry
feed additives. Stable growth in the production of pork and its domestic demand until 2025 is expected to drive
and swine nutrition
the demand for additives in the region.
ingredients is expected
to record moderate • Poultry, accounted for a share of 38% in the European animal and pet nutrition ingredients market in 2018, and
growth during the is expected to record a CAGR of 5.6% until 2025; whereas the market for European swine feed ingredients is
forecast period, with expected to record a CAGR of 5.1% from 2018 to 2025.
poultry dominating the • Aquaculture is a relatively small market. However, the demand for fish feed ingredients is expected to rise until
market. 2025 owing to the changing food preferences and aquaculture growth globally.
Source: FAO; Alltech Feed Survey; European Aquaculture Society; Frost & Sullivan
K318-88 39
Growth Opportunity by Region—Asia-Pacific
• Growth Levers: According to OECD (Organisation for Economic Co- GDP Growth Projections in
operation and Development) projections, Asian countries are expected to ASEAN, China and India,
witness an average GDP (gross domestic product) growth rate of 6.3% from APAC, 2018–2022
2018 to 2022. Expected increase in trade and expansion of trade zones
GDP Growth – Annual

could further add to this growth. Thus, improvement in economic conditions
Percentage Change
7.3%
and increase in disposable incomes are expected to drive the demand for
6.2%
meat and dairy products in the region. 5.3%
• China is a key driver, dominating in terms of both production and

consumption of feed additives. According to the 2018 Alltech Global Feed
Survey, the country is expected to maintain its dominance in terms of
compound feed production. Moreover, the demand for poultry meat is
expected to soar in the country owing to population growth, impacting the
market for feed additives. With respect to pork demand, China is projected
to remain a key consumer. However, due to greater consolidation in the ASEAN-5
China
sector and the recent implementation of China’s Environment Protection India
Law, which restricts pork production in the South China, the industry is
expected to record slow growth in terms of production. This growth will still
surpass that of the other regions.
• Rising health-consciousness among consumers in countries, such as India, and a growing demand
for animal protein are driving the demand for high-quality meat products. Increased awareness among
livestock producers and adoption of intensive animal farming practices to meet the growing demand are
expected to propel the demand for feed additives in the APAC region.
• There are emerging opportunities offered by the booming aquaculture sector. According to GLOBEFISH
estimates, the aquaculture sector is projected to record a CAGR of 2.2% from 2017 to 2026, with bulk of the
production continuing to come from Asian countries. As per estimates, Asian countries will account for 90% of
the total production by 2026, with China as the dominant producer accounting for 63%.
Source: OECD; FAO; GLOBEFISH; Alltech; Frost & Sullivan
K318-88 40
Growth Opportunity by Region—APAC (continued)
Rising demand for • A changing regulatory framework in Southeast Asian countries is expected to drive the demand for
high-quality, antibiotic- certain feed additives. Growing stringency on the use of antibiotics in animal feed in countries such as
free meat products Indonesia (which has recently been reported to have imposed a regulatory ban on the use of AGPs in animal
globally is expected to
feed) is expected to boost the demand for certain feed additives. The Food Safety and Standards Authority of
drive the demand for
India (FSSAI) also passed draft regulations in 2017, limiting the residual concentration of antibiotics in meat
feed additives in
and other poultry products, and banned the use of antibiotics in fisheries.
the region.
Amino acids accounted

for a share of 56.7% in • Key Ingredient: Amino acids accounted for a share of 56.7% in 2018 in the APAC animal and pet nutritional
2018; the segment is ingredients market, followed by vitamins/carotenoids. A growing requirement for animal protein and rising
expected to register a focus on the quality and appearance of animal products are the key factors driving the demand for amino
CAGR of 6.6% until acids and vitamins/carotenoids in the region.
2025. The enzymes
and organic acids • The enzymes and organic acid segments are expected to record a CAGR of 6.6% and 6.5% respectively from
segments are expected 2018 to 2025. This growth is primarily attributed to the growing awareness regarding the benefits of adding
to record the highest enzymes to the feed and the growing demand for antibiotic-free meat globally. Moreover, the demand for
growth rates until 2025. probiotics and prebiotics in APAC is expected to surge, driven by rising awareness among consumers.
• End-use Industry: Poultry dominates in terms of the demand for feed additives in the region, with a market
Poultry is expected to share of 45% in 2018. The sector is expected to record a CAGR of 6.5% until 2025. The swine sector is
dominate demand in expected to record a CAGR of 6% from 2018 to 2025, driven by a strong demand for pork in China and other
the region, with Southeast Asian countries.
aquaculture expected • The growing adoption of intensive farming practices for cattle farming is expected to increase the demand for
to register the highest feed additives for ruminants in the region. As per the USDA’s recent estimates, India ranks first in terms of
CAGR of 6.9% until cattle inventory. However, due to the unorganized nature of cattle farming in Asian countries, current usage of
2025. feed additives is lesser compared to swine and poultry.
• The demand for aquaculture ingredients is expected to witness staggering growth during the forecast period.
However, growth in the pet industry is expected to remain slow.
Source: FAO; Frost & Sullivan
K318-88 41
Growth Opportunity by Region—Rest of the World (RoW)
Improving economic
conditions and growing • According to the FAO estimates, per capita meat consumption in Latin America is projected to record a
feed industry in Mexico growth rate of more than 6% from 2016 to 2025. This is expected to be primarily driven by the growing rate
and Brazil are the key of urbanization and rising per capita incomes in the region.
factors driving the
• The 2018 Alltech Global Feed Survey also highlighted considerable growth in the compound feed production
demand for feed
in Brazil, Mexico, and the Middle East, suggesting a higher demand for feed additives in these regions.
additives.
Amino acid segment

dominated the RoW
market in 2018. • Key Ingredient: Amino acids accounted for a share of 38% in 2018. The probiotics and enzymes segments
Probiotics and are expected to record the highest CAGR (6.7% and 6.5% respectively) from 2018 to 2025.
enzyme segments are
• Regulatory Push: In 2017, Brazil developed a national antimicrobial resistance plan, under which it aimed at
expected to record
reducing AGPs and increasing the use of prebiotics and probiotics in animal feed. Thus, the demand for AGP
highest growth rates
alternatives, such as organic acids, probiotics, and prebiotics, is expected to rise during the forecast period.
going forward.
• End-use Industry: Poultry is the dominant consumer of feed ingredients in the region, accounting for a share
Rising demand for pork of 39% in 2018. It is expected to record a CAGR of 5.7% until 2025.
in the region is • Per capita pork consumption is projected to increase in Latin America, driven by increased domestic
expected to fuel the production, improved quality, and favorable relative prices that have positioned pork as one of the most
growth of feed favored meats along with poultry meat. Thus, the demand for feed ingredients in the swine sector is expected
additives over the to record the highest CAGR of 6.9% until 2025.
forecast period.
• The demand for nutritional ingredients in the pet industry is expected to remain relatively low owing to slow
growth in the pet industry in the region.
Source: Alltech; FAO; Frost & Sullivan
K318-88 42
Competitive Landscape
Key Takeaway: Vertical integration in the value chain is expected to increase market consolidation,
with companies, such as Cargill, which are trying to secure a competitive edge by offering one-stop
solutions to consumers.
Total Animal and Pet Nutrition Ingredients Market: Percent Revenue Share by Company,
Global, 2018
DSM
18.0%
Others
27.2%
Cargill
15.5%
Novus
International
6.8%
BASF
9.5% ADM
12.5%
Adisseo
10.5%
Key: Other market participants include Evonik, Ajinomoto, DuPont, Chr. Hansen, Trouw Nutrition, Lesaffre-Phileo, Novozymes, Meihua Holdings, CJ CheilJedang,
Kemin Industries, Zhejiang NHU, Zhejiang Medicine Co., Ltd., AB Vista, Alltech, and other regional and Chinese participants listed in the following slides.
K318-88 43
Key Mergers, Acquisitions, and Collaborations
• In 2018, ADM announced its plans of acquiring Neovia, a France-based global value-added animal nutrition solution
ADM provider. The acquisition will increase ADM’s presence in Europe and strengthen its product portfolio. However, the
acquisition is subject to regulatory approvals. It was expected to be closed by the fourth quarter of 2018. However,
there is no recent update regarding the deal.
• In 2018, Cargill announced its plans of acquiring the pet food manufacturing company, Pro-Pet. According to Cargill,
Cargill the acquisition will make it the sole national supplier of both animal feed and pet food offerings in the agricultural retail
segment.
• In 2018, Neovia acquired the Nigerian premix company, Hi-Nutrients to expand its presence in Africa. Hi-Nutrients
specializes in premixes, vitamins, and minerals for poultry, diary cows, and aquaculture. This step would help Neovia
penetrate the Nigerian market, one of the key markets for feed ingredients.
Neovia
• The company, in 2018, announced a partnership with TargEDys, a France-based probiotic start-up. Through this
partnership, the company aims to explore solutions that could regulate the appetite in canines that, in general, have a
higher tendency of weight gain or obesity.
• In 2017, Adisseo acquired the Belgium-based feed manufacturing firm, Nutriad to strengthen its feed specialty
Adisseo business. Adisseo reported an increase in revenue and profits for its specialty products post-acquisition.
• In 2018, the company received an innovative venture capital fund from Seventure Partners for supporting research and
innovation in the feed ingredients space.
• In 2018, Kemin acquired its Canadian distributor, Agri-Marketing Corp. and created a Canadian division that would help
Kemin the company serve its customers better by taking direct control of sales in the region and enable it to explore new
opportunities.
Source: ASIQ; Frost & Sullivan
K318-88 44
Competitive Landscape—Product-wise Mapping
Amino Acids End-use Industry

Manufacturers/ Livestock/
Suppliers L-Lysine D,L-Methionine L-Threonine L-Tryptophan L-Valine Aquaculture Pet Food
Evonik X X X X X
Ajinomoto X X X X X
Meihua Holdings X X X X X X
CJ CheilJedang X X X X X
ADM X X X X X X
Eppen X X X
Adisseo X (Protected) X (Ruminants)
Sumitomo
X X
Chemicals
Kemin Industries X (Protected) X (Protected) X (Ruminants)
*Other manufacturers include Novus International (methionine), Daesang Corp. (lysine and valine), Global Bio-chem (lysine and threonine),
Fufeng Group (threonine and tryptophan), Henan Julong Biological Engineering Co., Ltd. (tryptophan), Royal Canin (lysine and other essential
amino acids), and Purina (lysine and methionine).
Key
Manufacturer has a stronger focus on the product type based on scale,
Manufacturer Source: Frost & Sullivan
product scope, and market penetration.
K318-88 45
(continued)
Vitamins/Carotenoids End-use Industry

Manufacturers/ Vitamin B Livestock/
Suppliers Vitamin A Vitamin E Vitamin D Complex Choline Carotenoids Aquaculture Pet Food
DSM X X X X X (Beta carotene) X X
BASF X X X (Canthaxanthin) X X
X (Astaxanthin,
Zhejiang NHU X X X beta-carotene, X X
lutein, lycopene)
Zhejiang X (Astaxanthin,
Medicine Co., X X X beta-carotene, X
Ltd. canthaxanthin)
Adisseo X X X X X X
Jiangxi Tianxin X (B1, B6, and
X X X X
Pharmaceutical Co. others)
ADM X (Natural source) X X
Kemin X X (Lutein and
X X
Industries (Protected) zeaxanthin)
Novus X (Lutein and
X
International zeaxanthin)
Balchem
X X X
Corporation
*Other manufacturers include Hubei Guangji (Vitamin B complex), BTSA (natural Vitamin E), Eastman (choline chloride), Wilmar Spring Fruit
Nutrition Products (Jiangsu) Co., Ltd. (natural Vitamin E), Chr. Hansen (beta-carotene for pet food), and Royal Canin (carotenoids for Pet).
Key
K318-88 46
(continued)
Enzyme Types End-use Industry

Suppliers Proteases Phytases Carbohydrases Aquaculture
X (Beta-glucanases, cellulases,
Novozymes and DSM X X X
and xylanases)
DuPont X X X X
AB Vista X X (Xylanase and beta-glucanase) X
X (Swine and
Adisseo X X (NSP blends)
poultry)
Guangdong VTR X (NSP blends) X
Huvepharma X X (Xylanase and beta-glucanase) X
X (NSP blend of xylanase, alpha-
Novus International X X galactosidase, and beta- X
glucanase)
BASF SE X X (NSP) X
*Other manufacturers include ENMEX S.A., Elanco, Cargill, Kemin Industries, and a number of regional and Chinese players.
Organic Acids End-use Industry

Suppliers Single Acids Blends Aquaculture Pet Food
BASF X (Formic acid and propionic acid) X X
Eastman Chemical Company X (Propionic acid and others) X
Perstorp AB X (Propionic acid, formic acid, and others) X (Blends) X
Corbion X (Lactic acid) X X
Key
K318-88 47
(continued)
Organic Acids End-use Industry

Suppliers Single Acids Blends Aquaculture Pet Food
Dow Chemicals X (Propionic acid) X
X (Multiple Blends of formic acid, propionic
Novus International acid, ammonium formate, and ammonium X
propionate)
X (Blends of propionic acid, acetic, benzoic,
Kemin Industries X
and sorbic acid)
Biomin X (Blend of organic acid) X
Trouw Nutrition X (Range of blends of organic acid) X
Cargill X (Range of blends of free carboxylic acids)

*Other manufacturers include Yara (organic acid blend), Jungbunzlauer (lactic acid and other for pet and animal feed), PeterLabs Holdings
(organic acid blend), FF Chemicals (organic acid blends), and Anpario (organic acid blends).
End-use Industry
Suppliers Organic Trace Minerals Aquaculture Pet Food
Cargill X (Selenomethionine) X X
ADM X (Chelated trace minerals) X
Alltech X (Chelated trace minerals) X
Novus International X (Chelated trace minerals) X
Key
K318-88 48
(continued)
End-use Industry
Suppliers Organic Trace Minerals Aquaculture Pet Food
Zinpro X (Chelated trace minerals) X X
Trouw Nutrition X (Hydroxy trace minerals) X
Adisseo X (Organic Selenium) X
Kemin Industries X (Organic Chromium)
BASF SE X (Glycinates) X X
DSM X (Organic trace minerals) X
*Other Manufacturers include Pancosma, QualiTech, Orffa, and Tanke Biosciences.
Others End-use Industry

Suppliers Probiotics Omega-3 Fatty Acids Aquaculture Pet Food
DSM X X X X
DuPont X X X X
Lallemand X X
Novus International X X
Chr. Hansen X X X
ADM X X X X
Evonik X X X
Key
Manufacturer product scope, and market penetration. Source: Frost & Sullivan
K318-88 49
(continued)
Others End-use Industry

Suppliers Probiotics Prebiotics Omega-3 Fatty Acids Aquaculture Pet Food
Lesaffre-Phileo X X X
Novozymes X X X
Behn Meyer X X X
BENEO-Orafti SA X X X
Beghin Meiji X X X
Cargill X X X X
*Other manufacturers include CALPIS Co., Ltd. (feed probiotics), Nebraska Cultures Inc. (feed probiotics), Adisseo (feed probiotics), Jubilant Life
Sciences (feed probiotics), Alltech (feed probiotics), and Purina (probiotics for pets).
Key
K318-88 50
Growth Opportunities and Companies to Action
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K318-88 51
Growth Opportunity Overview 1—Rising Demand for
High-quality Meat and Growth in Aquaculture
Applicable Regions North America Asia-Pacific Europe Rest of the World
Applicable Ingredient Types Amino Vitamins/ Organic Organic Trace

Enzymes Probiotics Others
Acids Carotenoids Acids Minerals
Growth Levers
Context and Opportunity Call to Action

Vision Transformation
• A global per capita increase in the • Manufacturers need to develop feed
Mega Trends’ Impact demand for meat products requires ingredients that can enhance the feed
livestock farmers to increase feed conversion ratio and are compliant with
Disruptive Applications
conversion ratios, propelling the changing regulatory frameworks.
demand for feed additives.
Business Models • Innovation to cater to changing farmer
• Growing awareness among consumers requirements is a key prerequisite for
Current Offerings and rising demand for high-quality meat market penetration.
products will create opportunities for
New Capabilities • Manufacturers need to tap the
feed ingredient manufacturers.
opportunities presented by organic
Value-added Services • The rising demand for seafood globally trace minerals. Moreover, the demand
is expected to propel growth in the for trace minerals in aquaculture is
Vertical Integration aquaculture sector, creating expected to soar, and manufacturers
opportunities for feed manufactures to need to leverage this opportunity.
Geographic Expansion
enhance and expand their capabilities.
Partnerships
Investment/M&A
K318-88 52
Growth Opportunity Overview 2—Antibiotic Alternatives
Demand for Disruption
Applicable Ingredient Types Vitamins/ Organic Organic Trace

Probiotics Others
Carotenoids Acids Minerals
Growth Levers

• A regulatory ban on the use of AGPs in • Manufacturers need to act upon the
Mega Trends’ Impact animal feed in developed, and some of changing requirements and meet the
the developing, nations will catapult the demand for antibiotic alternatives in
demand for feed additives such as animal feed. They need to focus on the
organic acids, probiotics, prebiotics, development of novel solutions that
Business Models
and trace minerals. promote growth without any harmful
Current Offerings effects.
• Consumer awareness on antibiotic
resistance as a result of the exploitive • Companies manufacturing feed organic
New Capabilities
use of antibiotics in feed is driving the acids, probiotics, and prebiotics need to
demand for antibiotic-free pork and make additional investments to develop
Value-added Services
meat, which in turn propels the demand more effective AGP alternatives.
for antibiotic alternatives.
Vertical Integration
• While probiotics hold considerable
• There is a rising demand for probiotics potential, companies have to work on
and prebiotics as they not only enhance more potent bacterial strains and need
an animal’s immune system and to devise delivery mechanisms to
Partnerships
prevent probable bacterial infections, enhance their efficacy in animals.
Investment/M&A but also support growth.
K318-88 53
Growth Opportunity Overview 3—Rising Demand for
Premium Pet Food
Applicable Ingredient Types Amino Vitamins/ Organic Trace

Probiotics Others
Acids Carotenoids Mineral
Growth Levers

• Rising demand for premium pet food • Manufacturers need to enhance the
Mega Trends’ Impact products especially in North America functional aspects of their pet food
and Europe will propel the demand for products. Rising demand for probiotics
highly functional ingredients. and prebiotics in animal feed offer
opportunities for manufacturers,
Business Models • Growing consciousness among pet motivating them to offer products of
owners regarding the health of their high quality and efficacy.
Current Offerings pets drives the demand for nutritional
additives. • As pet owners are becoming highly
New Capabilities
aware, manufacturers need to focus on
• There are strong opportunities for the labeling aspects so as not to
Value-added Services manufacturers of highly specialized pet mislead the consumers.
food products that cater to specific
Vertical Integration needs of the animals. • Pet food ingredient manufacturers could
partner with pet food manufacturers to
develop novel products that cater to
Partnerships changing consumer needs in this
space.
Investment/M&A
K318-88 54
The Industry Trend—Strategic Imperatives for Success
and Growth
Key Takeaway: Quality improvement and growing demand for animal products, especially in
developing regions, are the primary levers of growth in the market.
Total Animal and Pet Nutrition Ingredients Market: Success Factors, Global, 2018–2025
The market is primarily driven by the growing demand for meat globally. Changing economic
conditions in developing nations and rising demand for high-quality animal products in developed
nations propel the demand for nutritional additives.
Segments such as enzymes, probiotics, organic trace minerals, prebiotics, and omega-3 fatty acids
hold innovation potential. Market participants need to focus on alternative sources for omega-3 fatty
acid, as the segment holds potential for disruption. Moreover, development of novel microbial
strains that could enhance the immune functions in animals, overcoming the need for antibiotics to
a certain extent, offers a major opportunity.
Critical
Success The key to increasing market penetration is product portfolio expansion, including the provision of
Factors one-stop solutions. The market holds potential for vertical integration, whereby companies can
expand their offerings from additives to premixes and specialized ingredients. Feed manufacturers
could also broaden their horizon by partnering with pet food manufacturers, tapping into a much
bigger market.
Creating awareness among developing countries on the advantages of including different additives
in animal feed can have a positive impact on the market for these ingredients. As the feed market is
highly price-sensitive, devising cost-effective production routes to control price volatility could
increase demand.
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Amino Acids Segment—Growth Opportunity
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30 December 2016
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K318-88 56
Growth Opportunity Dashboard
Key Takeaway: Stable growth is expected globally, with increased penetration in developing regions.
Amino Acids Segment: Growth Opportunity Dashboard, Global, 2018–2025

Degree of
Market Size $7,362.3 Million (2018) Customer High
Need
Market Size: Degree of

End of $11,036.6 Million (2025) Industry Medium-High
Forecast
Period Innovativeness
Compound Degree of
Annual 6.0% (2018–2025) Competitive Medium-High
Growth Rate Rivalry
Top Growth Factors
Rising demand for meat products in developing regions is expected to drive the overall demand for amino acids, with
1
poultry sector dominating the overall demand.
Growth in the aquaculture sector, especially in regions, such as China, and rising demand for seafood globally are
2
expected to catapult the demand for amino acids.
Decreasing Stable Increasing

K318-88 57
Percent Revenue and Volume Forecast by Region
Key Takeaway: China, currently the key consumer and producer for most of the feed amino acids, is
expected to remain the most lucrative market in APAC until 2025.
Amino Acids Segment: Percent Revenue by Amino Acids Segment: Percent Volume
Forecast Region, Global, 2018–2025 Forecast by Region, Global, 2018–2025
14.0% 15.6%
19.0% 18.1%
13.8% 15.4%
20.0% 19.1%
North America North America

Europe Europe
APAC 22.5% APAC
23.0%
24.0% RoW 23.5% RoW
42.2%
42.0%
44.1%
43.9%
Key: Inside circle depicts data for 2018 & outside circle depicts data for 2025 Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan
K318-88 58
Percent Revenue and Volume Forecast by Ingredient Type
Key Takeaway: Stable demand for L-lysine and D, L-methionine in the animal feed sector is expected
to drive the overall market for amino acids.
Amino Acids Segment: Percent Revenue Amino Acids Segment: Percent Volume
Forecast by Category, Global, 2018–2025 Forecast by Category, Global, 2018–2025
2.2% 0.9% 0.5% 0.4%
10.7% 12.7%
2.2%
10.1% 12.2%
0.3%
0.9% 0.5%
L-Lysine L-Lysine
44.1%
D,L-Methionine D,L-Methionine
44.1%
L-Threonine L-Threonine
56.9%
L-Tryptophan 29.8% 57.1% L-Tryptophan
29.5%
L-Valine L-Valine
42.7%
42.1%
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Discussion
Animal Feed
• High awareness and increased research on the advantages of using limiting amino acids in animal feed are
Lysine the primary factors driving demand.
• For most of the animal species, lysine is the first limiting amino acid. Thus, with the growing demand for meat
and other animal products, the demand for lysine is expected to record strong growth, especially in
developing regions.
• High price volatility is a key restraint impacting the feed lysine segment. With volatile raw material prices and
changing supply dynamics in the Chinese market, the price of lysine is expected to grow moderately over the
years.
Pet Food
• Lysine is a key limiting amino acid in pet food. It records considerable demand as its deficiency leads to
reduced food intake and weight loss.
Animal Feed
• The primary driver for growth is the rising demand for poultry meat. Methionine is the first limiting amino acid
Methionine for poultry. According to OECD and FAO estimates, global meat consumption is expected to reach 36.3
kilograms in retail weight by 2023. 72% of this growth is expected to be driven by poultry, with a strong push
from developing regions such as Latin America and Asia-Pacific.
• Feed-grade methionine prices are expected to remain stable during the forecast period. Companies, such as
Evonik, also expect the prices to remain stable primarily due to stable demand for the ingredient in developed
nations.
Pet Food
• For dogs and cat, methionine is an essential amino acid as it is important for synthesis of hair protein and as
a precursor of cysteine. Growing consumer awareness on the quality of protein in pet food and concerns with
regard to pet health are some of the key factors expected to drive the demand for methionine in the industry.
Source: ADM; Ajinomoto; Evonik; FAO; Frost & Sullivan
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Discussion (continued)
• L-threonine plays an important role in processes of maintenance, particularly in digestion. In general,

L-threonine is the second limiting amino acid in feed for pigs and the third limiting amino acid in feed for
L-threonine poultry.
• For swine diets, studies have shown that reducing crude protein by three percent units requires feed
formulators to supplement the diets with threonine, methionine, as well as lysine to maintain the same
level of performance.
• Growing demand for pork and poultry meat, especially in China and other Southeast Asian countries, is
expected to drive the demand for L-threonine.
• Scientific research and field trials have shown the effectiveness of tryptophan in swine and poultry diets to
be dependent on the animal’s sex, age, genetics, and feed mix. Studies have shown the ingredient to be
L-tryptophan effective in the growth phase of animals due to its positive effects on feed intake and weight gain.
• Growing awareness on the environmental benefits of reducing crude protein and cost benefits of including
limiting amino acids in feed are expected to drive the demand for the fourth and fifth limiting amino acids
in general.
• The high average price of the ingredient is expected to remain a key restraint impacting the demand in
developing regions.
• Studies have shown that valine is required for protein biosynthesis, and low valine content in plant-based
feed materials frequently limits the utilization of other protein building blocks. This makes valine an
Valine indispensable nutrient for animals. In a typical swine diet, valine is a fifth limiting amino acid, whereas in
broilers fed on vegetable diets, it is the fourth limiting acid after methionine, lysine, and threonine.
• A growing demand for meat products and increased regulatory stringency on using animal by-products in
feed due to the risk of disease transmission are the primary factors responsible for the growth in demand
for valine in the animal feed sector.
Source: ADM; Ajinomoto; Evonik; FAO; Frost & Sullivan
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Percent Revenue Forecast by End-use Industry
Key Takeaway: Growing environmental concerns on the use of crude protein in animal feed and
rising demand for poultry meat are expected to drive the demand for feed amino acids.
Amino Acids Segment: Percent Revenue by Amino Acids Segment: Percent Revenue
End-use Industry, Global, 2018 Forecast by End-use Industry, Global, 2025
Others (Pet Others (Pet
and Equine) and Equine)
5.5% Aquaculture 4.3%
Aquaculture 6.6%
6.5%
Ruminants
Ruminants 6.9%
8.0%
Poultry Poultry
44.5% 46.1%
Swine
Swine
36.1%
35.5%
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Growth Opportunity by End-use Industry
• FAO projects the demand for poultry meat to outperform other • In order to maximize growth, especially in high-density
meat products due to an expected shift in eating habits. Such rearing systems, and to cater to the protein
growth is expected to impact the demand for poultry feed requirements, there is a rising demand for supplementing
additives that can improve yield and reduce production cost. fish feed with synthetic amino acids, especially lysine and
• According to the 2018 Alltech Global Feed Survey, 40% of the methionine–the first limiting amino acids in fish diets.
feed produced was used for poultry applications in 2017,
followed by those in the swine sector. Such high demand for • According to FAO estimates, global fish production in
compound feed from the poultry sector is expected to drive the 2016 was 171 million MT. Aquaculture accounted for 47%
demand for amino acids. Based on the estimates, in the amino of the total production, and the sector is expected to
acids segment, poultry accounted for a share of 44.5% in 2018. register a CAGR of 2.2% from 2017 to 2030. Given the
• The market for amino acids in the swine sector is expected to growth potential in the sector, the demand for amino
record a CAGR of 6.2% until 2025. Higher demand of pork in acids in aquaculture is expected to record a CAGR of
developing countries (e.g., Brazil) and stable per capita 6.1% from 2018 to 2025.
consumption in developed nations are the key factors driving
growth in the demand for amino acids.
• The livestock sector is also expected to witness higher demand
for third and fourth limiting amino acids—tryptophan and
threonine—that have been shown to support high immune
modulatory functions in addition to protein synthesis.
Image Source: Pixabay Source: FAO; Alltech Feed Survey; Frost & Sullivan
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Growth Opportunity by End-use Industry (continued)
• High-quality protein is an essential requirement for companion animals as it supplies amino acids, which are necessary for
the formation, maintenance, and regeneration of body tissues. Studies have shown that protein digestibility and protein
quality are, in general, the primary factors determining the need for supplementing pet diets with synthetic amino acids.
• As people are moving toward feeding their pets raw whole food or the protein-rich food consumed by their wild
counterparts, the demand for processed food treats supplemented with amino acids is expected to record slow growth.
• Stable demand for lysine and methionine is the primary market driver. There is also a growing demand for specialized
amino acids (e.g., taurine–a key limiting amino acid for cats).
• The protein requirement studies conducted by the US National Research Council (NRC) show that amino acid
requirements vary depending on animal age, with high demand registered in weaning pets compared to adults. Thus, a
higher demand for amino acids is expected in growing and lactating dogs and cats than the adult animals.
Image Source: Pixabay Source: NRC; Frost & Sullivan
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Recent Product and Technology Updates
Key Takeaway: Optimization of scales and production technologies remains the key focus area in
this segment.
• In 2018, CJ Bio announced its plans to start production of L-threonine at its North America production
plant. The plant is slated to manufacture 20,000 MT of L-threonine from mid-2019. The investment is
aimed at catering to the growing demand for the ingredient in the North American region. The plant will
source dextrose, the key raw ingredient, from the Cargill plant.
• In 2018, Evonik entered into a strategic partnership with Fufeng Group for the production of ThreAMINO
(L-threonine) used in the animal feed segment. Fufeng Group will toll manufacture L-threonine for Evonik. The
partnership will allow Evonik to strengthen its position in animal nutrition segment in Western and Asian markets.
• In 2018, Adisseo announced its plans of expanding its production capacity of liquid methionine by building a
second methionine facility in Nanjing, China. The new plant is expected to have a capacity of 180 kilotons and
come on stream by mid-2021. The expansion is primarily aimed at catering to the growing demand for methionine
in animal feed.
• In 2017, Novus International announced its plans of building a new production facility for ALIMET®, a methionine
hydroxyl analog used as a feed supplement. The facility will start by 2020 and add 120,000 metric tons to its
annual production capacity of 320,000 metric tons.
• In general, there is heightened interest with respect to L-threonine among amino acid manufacturers primarily
due to its untapped potential and opportunity to expand its application in the animal feed market.
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Recent Product and Technology Updates (continued)
• With respect to patent trends, optimization of fermentation technologies by optimizing the

bacterial strains has been the key focus area. There is also renewed interest in deriving other
amino acids through fermentation techniques. For instance, production of methionine through
fermentation has gained traction in the last few years.
• Companies such as Evonik (that licensed the fermentation technology from METEX in 2016) and CJ
Group (the only company that offers fermentation-derived methionine on a commercial scale) are
expected to drive the shift in the market.
• Evonik has filed a patent application in 2017, EP3385275A1, focusing on a method for producing
aromatic L-amino acids using improved strains of the Enterobacteriaceae family through fermentation
technology. The method improves the production efficiency of aromatic L-amino acids.
• Ajinomoto, another important market participant in the space, filed a patent application, EP3385389A1,
in 2017, focusing on the production of L-amino acid from fructose.
• CJ CheilJedang has filed a couple of patent applications in 2017, focusing on improving the
fermentation techniques for the production of different amino acids, such as L-threonine and L-
tryptophan, for animal feed applications. The company is primarily focused on using recombinant
coryneform bacterial strains for the production.
Source: Google Patents; Frost & Sullivan
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Enzymes Segment—Growth Opportunity
9AB8-88
30 December 2016
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K318-88 67
Key Takeaway: Technology innovation and launch of new enzyme chemistries are expected to drive
feed enzymes market growth.
Enzymes Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Market Size $1,270 Million (2018) Customer High
Need

End of $1,935 Million (2025) Industry High
Forecast
Compound Degree of
Growth Rate Rivalry
Top Growth Factors

Need to improve the feed conversion ratios to cater to the ever-growing demand for animal products is expected to
1
propel the demand for different feed enzymes, especially in developing regions.
Proteases and carbohydrases, such as xylanases, are expected to record strong growth, driven by the changing
2 feeding activities, whereby farmers are adding a high concentration of indigestible ingredients in animal feed. Farmers
are also shifting to soybean alternatives, which is further expected to drive the demand for feed enzymes.

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Percent Revenue Forecast by Region
Key Takeaway: Latin America is estimated to record a higher rate of penetration in terms of feed
enzyme usage, with Mexico as the key market. The demand for feed enzymes in Europe and Latin
America is expected to witness higher growth compared to North America.
Enzymes Segment: Percent Revenue Enzymes Segment: Percent Revenue
Forecast by Region, Global, 2018 Forecast by Region, Global, 2025
RoW RoW
23.4% 23.9% North
North America
America 20.8%
21.5%
Europe Europe
32.6% 32.2%
APAC APAC
22.5% 23.1%
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Percent Revenue Forecast by Ingredient Type
Key Takeaway: A shift toward cost-effective and native grain types as part of animal feed is
expected to boost technological innovation in enzyme chemistries with the greater penetration of
carbohydrases and proteases.
Enzymes Segment: Percent Revenue Enzymes Segment: Percent Revenue
by Ingredient Type, Global, 2018 Forecast by Ingredient Type, Global, 2025
Carbohydrases Carbohydrases
28.5% 28.7%
Phytases Phytases
48.8% 47.5%
Proteases
Proteases
22.7%
23.8%
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Percent Revenue Forecast by Ingredient Type Discussion
• Phytases increase the bioavailability of phosphorus, which is inaccessible in most of the feedstock being
used in animal feed. Phytases are the most widely used feed enzyme and included in about 90% of poultry
Phytases
and 70% of swine diets.
• The enzyme has achieved a high rate of penetration in the feed industry. However, further growth is
dependent on exploring new applications of phytases. Better knowledge on limiting factors in the diet, such
as anti-nutritional factors or variation in raw materials, can improve applications of the ingredient. For
example, better understanding of phytate levels in the animal feed enables farmers to explore the ways in
which phytase can be utilized to manage any anti-nutritional effects and reduce feed cost. Such awareness
and knowledge of secondary applications need to be created to further boost the demand for phytases.
• Accounting for a market share of 48.8% in 2018, phytase is expected to dominate the feed enzymes
segment during the forecast period, recording a CAGR of 5.8%.
• Proteases in animal diet ensures that the digestible amino acid requirements are met with lower levels of
Proteases crude protein without compromising on the feed conversion ratio and body weight gain.
• The market for proteases is expected to record the highest CAGR of 6.9% from 2018 to 2025, driven by a
rising demand for animal protein and increased focus on reducing crude protein content in animal diets.
• The demand for proteases is also expected to rise due to the stringent environmental regulations to reduce
greenhouse gas emissions in the feed industry. Trials conducted by DuPont for its protease enzyme,
Axtra® PRO have shown that increased protein digestibility improves nitrogen retention in the animals,
leading to a 15% reduction in ammonia emissions.
Source: DuPont; Frost & Sullivan
K318-88 71
(continued)
• Carbohydrases constitute a class of enzymes that NSP Content in Typical Corn-Soybean

Carbohydrases include both starch and non-starch hydrolyzing Meal Broiler Diet, Global, 2018
enzymes, such as amylases, xylanases, cellulases,
and beta-glucanases.
• A typical livestock diet is composed of grains and 28.0% 43.0%
grain by-products, used as a source of protein and
Abrabinoxylan
energy. Feed conversion studies have shown that
about 15% of these diets are indigestible due to the Beta-glucan
presence of components such as non-starch
polysaccharides (NSPs). Not only do NSPs impact Cellulose
the product price, they also have detrimental effects
on the animal gut. Thus, there is considerable Other NSPs
demand for NSP-hydrolyzing enzymes to improve 27.0%
the feed conversion ratio and energy availability, 2.0%
thus promoting growth and overall health in
animals.
• Among different carbohydrases considered under
the scope of this research, the enzymes segment is
primarily driven by xylanases that break down
arabinoxylan, the most prevalent NSP in poultry
and swine diet. Moreover, increased used of
amylases, a starch-degrading enzyme, in feed is
expected to propel growth in the segment.
• The market for carbohydrases is estimated to
record a growth rate of 6.3% from 2018 to 2025.
Source: Briworldwide; Frost & Sullivan
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Key Takeaway: Growing use of plant-based ingredients in aquaculture is expected to propel the
demand for carbohydrases and proteases, driving overall growth in this segment.
Enzymes Segment: Percent Revenue by Enzymes Segment: Percent Revenue Forecast

End-use Industry, Global, 2018 by End-use Industry, Global, 2025

& Equine) & Equine)
4.6% 3.6%
Aquaculture Aquaculture
8.5% 8.7%
Ruminants
13.6% Poultry Ruminants Poultry
43.8% 13.6% 44.1%
Swine Swine
29.5% 30.1%
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• Poultry dominates the feed enzymes segment in terms of market value. Its dominance is expected to
continue through the forecast period, driven by a growing demand for high-quality poultry products in both
Livestock
developed and developing regions.
• Use of feed enzymes is also gaining importance in swine diets. The market for feed enzymes in the swine
sector is expected to record a CAGR of 6.5% until 2025. Among the different enzyme types, phytases have
achieved the highest penetration, whereas use of carbohydrases is comparatively less accepted.
• Enhanced knowledge on limiting ingredients in the diet and growing awareness on reduction of
anti-nutritional elements in feed are some of the key factors expected to drive the demand for enzymes in
the livestock sector.
• The expansion of global aquaculture is increasing the demand for aquafeed. The increasing cost of
fishmeal, the most critical ingredient in aquafeed, has encouraged feed manufacturers to search for
Aquaculture
cheaper protein alternatives (e.g., plant proteins). Rise in the application of plant-based ingredients in fish
diets is expected to fuel the demand for enzymes in aquaculture.
• As phosphorus is one of the key micronutrients for fish growth, the penetration of phytases is expected to
increase in the sector. A shift toward the use of plant-based ingredients and expected reduction in the
fortification of fish diets with inorganic phosphorus are some of the factors that are expected to promote
the use of phytases in aquafeed.
• Moreover, there is significant opportunity for exploring the application of carbohydrases, as these
ingredients can increase the productivity and profitability of aquaculture.
Source: Briworldwide; Frost & Sullivan
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Others • The requirement of supplementing both pet and equine diets with exogenous enzymes is not well-
registered and has different views on its benefits.
(pet and
equine) • According to some schools of thought, there are no specific advantages of supplementing horse feed with
enzymes, whereas others suggest that it could help in the digestion of starch in the equine’s small intestine.
• The market for enzymes in the equine sector is limited, and it requires further research to substantiate their
benefits.
• Enzyme supplements are primarily required in pets with sensitive stomachs or those prone to digestive
problems. Moreover, aging dogs and cats that are unable to produce sufficient enzymes of their own have a
high requirement for digestive enzymes. Despite growing awareness among pet owners regarding the
benefits of improving the digestibility of pet food, the use of processing enzymes in pet food is very limited,
also the trend of using enzyme supplements is expected to witness very slow growth due to the trend of
feeding raw, natural food to pets.
Source: Alltech Symposium; Frost & Sullivan
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Key Takeaway: Multienzyme technology is expected to offer next-generation solutions in the animal
feed industry.
• In 2018, DSM and Novozymes launched a novel feed enzyme, Balancius™–a microbial
New muramidase that improves feed efficiency in poultry and digestibility in broilers. The enzyme
Product breaks down peptidoglycans (PGNs) in bacterial cell debris; unlocking the hidden potential in
gastrointestinal functionality, improving feed conversion by 4 to 6 points.
• AB Vista, another leader in the market for feed enzymes, has introduced Maximum Matrix
Nutrition, a novel enzyme solution that can target both phytate and NSP, reducing the
anti-nutritive effects of both substrates. The enzyme reduces viscosity and increases fiber
fermentability, while breaking down phytate completely. The concept was introduced by the
company at the Feed Additives 2018.
• In 2018, BASF introduced its next-generation phytase technology, Natuphos® E for Vietnam's
feed industry. The company will be offering the product in partnership with BIOMIN Vietnam,
which will be the key distributor for the product in the country. This is expected to increase
BASF’s penetration in the Vietnamese market and underscores its strategy to tap the growing
demand for feed additives in the APAC market.
• In 2018, New Rosedale Colony Farms, a Canadian compound feed manufacturer, launched a
next-generation multi-activity enzyme supplement, Rozyme Plus. The product features multiple
enzyme activities to achieve a high level of feed breakdown and is suitable specifically for feed
and diets being used in Western Canada and the northwestern part of the US.
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• In order to increase its penetration in the feed enzymes segment, ADM entered into a strategic
New development and commercialization agreement with Qingdao Vland Biotech Group Co., Ltd. (a
Product Chinese biotechnology company) for the production of feed enzymes in 2018. Qingdao Vland
Biotech Group Co., Ltd. specializes in developing enzymes, probiotics, and other animal health
products. ADM and Qingdao Vland plan to share the proprietary strains for the development of
feed enzymes, and the products developed will be commercialized by both the companies. The
two companies are primarily focusing on a range of fiber-degrading enzymes for use in poultry
and swine diets.
• Novozymes, one of the key market participants in this space, filed a patent application in 2016,
US20180010110A1, claiming a method of production for xylanase variants that have increased
efficiency of solubilizing xylan from plant-based materials used in animal feed.
• Danisco filed a couple of patent applications in 2017, WO2018184004A1 and
WO2018164737A1, focusing on the method of production for alpha-amylases and
thermostable-glucoamylases respectively (ingredients that can improve digestibility of starch
in animal feed).
• DuPont filed a patent application, WO2018169780A1, in 2017 claiming the use of thermostable
archaeal serine protease for improved digestion of proteins in animal feed.
• Another patent filed by Shanghai Honesten Biotechnology Co., Ltd. CN107836572A, in
2017claims a xylanase enzyme composition that can improve the breakdown of NSPs from
feed cereals, enhancing their nutritional value.
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Vitamin/Carotenoids Segment—Growth Opportunity
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K318-88 78
Key Takeaway: The segment is expected to witness slow growth during the forecast period due to a
high level of maturity.
Vitamins/Carotenoids Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Need

End of $4,878.1
(2025) Industry Medium-High
Forecast Million
Compound Degree of
Growth Rate Rivalry
Top Growth Factors

Growing industrialization of animal farming in developing regions and rising demand for high-quality meat with
1
increasing consumer awareness are the key factors driving the market for vitamins and carotenoids.
Growth in the aquaculture sector and changing consumer perspectives linking quality with appearance are the key
2
growth factors driving the demand for carotenoids in the animal and pet food sector.
Growing incidence of diseases among animals is further attributed to catapult the demand for immunity-enhancing
3
vitamins, such as Vitamin E, which is primarily used for its antioxidant properties.

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Percent Revenue and Volume Forecast by Region—
Vitamins/Carotenoids
Key Takeaway: Higher production of compound feed, rising demand for animal products, and
improving economic conditions in APAC and Latin America are expected to drive the demand for
feed vitamins.
Vitamins Segment: Percent Revenue Vitamins Segment: Percent Volume
Forecast by Region, Global, 2018–2025 Forecast by Region, Global, 2018–2025
18.1% 23.3% 22.3%

22.6%
18.0%
24.0% 23.0%
22.5%
Europe Europe
APAC APAC
RoW RoW
32.5% 24.0%
25.5%
33.5% 30.5% 23.9%
25.1%
31.2%
Key: Inside circle depicts data for 2018 and outside circle depicts data for 2025. Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan
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Percent Revenue and Volume Forecast by Region—
Carotenoids
Key Takeaway: Rising demand for seafood and projected growth in aquaculture in APAC region are
expected to drive the market for feed carotenoids.
Carotenoids Segment: Percent Revenue Carotenoids Segment: Percent Volume

Forecast by Region, Global, 2018–2025 Forecast by Region, Global, 2018–2025
13.8% 16.5%
29.2%
14.0% 29.6%
16.5%
30.0% 29.5%
21.6%
Europe 20.8% Europe
APAC APAC
21.0% 20.5%
RoW RoW
35.0% 33.5%
35.0% 33.6%
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Key Takeaway: Price volatility, especially for Vitamins A and E, is expected to negatively impact the
demand for vitamins, especially in developing regions. In contrast, the demand for choline in both
animal feed and pet food is expected to grow.
Vitamins/Carotenoids Segment: Percent Revenue Vitamins/Carotenoids Segment: Percent Volume

Forecast by Category, Global, 2018–2025 Forecast by Category, Global, 2018–2025
1.4%
20.0% Vitamin E Vitamin E

38.0% 33.5%
19.9% 1.4%
Vitamin A 33.7% Vitamin A
37.6% 56.0%
55.5%
Vitamin D Vitamin D
23.4%
23.2% 2.2%
Vitamin B Complex 7.2% 2.0% Vitamin B
9.4% & Choline Complex &
9.9% 7.0% Choline
8.9% Carotenoids
9.8% Caotenoids
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Discussion
• As the vitamins market is mature in developed regions, growth in the segment is mainly attributed to the
rising demand for meat products in developing regions such as APAC and Latin America.
Vitamins
• Vitamin E is estimated to account for the highest share in the vitamins segment in 2018 due to its
widespread use in livestock and aquaculture sectors. Apart from being a membrane antioxidant, Vitamin E
is widely used due to its physiological importance in maintaining the structural integrity of tissues,
supporting neural growth, and modulating immunity, which makes it an essential nutrient for animal growth.
• Despite being an essential nutrient, in 2017, Vitamin E witnessed a slowdown due to the shutdown of major production
plants and supply chain disruption faced by some of the Chinese manufacturers and BASF. As a result of supply shortages,
Vitamin E prices peaked in 2017. Following this, the European Feed Manufacturers' Federation reported a reduction in the
inclusion rates for both Vitamins E and A in animal feed. However, the supply dynamics were expected to stabilize as BASF
lifted force majeure for the majority of its vitamin E and vitamin A products by Q4 2018.
• Vitamin A holds a smaller share compared to Vitamin E in terms of value and volume and is expected to witness sluggish
growth due to its stable demand globally without any probable change in the rate of penetration.
• The market for Vitamin D is expected to witness moderate growth until 2025, driven by growing indoor animal farming
practices. Vitamin D is primarily synthesized by daily exposure to sunlight. However, with increased indoor rearing activities,
the dietary demand for Vitamin D is expected to grow, especially in poultry.
• Other than Vitamin E, the demand for choline in the feed industry is expected to surge due to its rising demand in poultry
and swine feed. Deficiency of choline in the diets of broilers and laying hens results in poor growth, slipped tendons, and
inefficient feed conversion. Choline, is also considered as an essential vitamin in dogs and cats, and has been shown to
support liver function and cell metabolism in pets. Rising awareness among pet owners is a key factor favoring demand
growth for this ingredient.
• Among the B vitamins, B12 and B6 are indispensable micronutrients important for animal growth. As both the vitamins
cannot be synthesized in the body and are not present in animal feed, supplementing them becomes imperative. However,
B vitamins are fed in a much smaller concentration compared to other feed vitamins.
Source: BASF; FEFAC; FAO; DSM; Frost & Sullivan
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• Dietary supplementation for vitamins is mostly dependent on species, age of animals, and concentration
of other nutrients. As per the NRC requirements, the dosage of different vitamins varies considerably
between different animal species and age groups.
• For example, in broilers, the Vitamin E requirement varies from 50 mg/kg to 300 mg/kg of dry feed based
on the age and species. Similarly, in the swine sector, Vitamin E requirements vary from 60mg/kg to
150 mg/kg of dry feed. In ruminants, Vitamin E requirements vary from 100 to 150 mg per animal per day
for milk replacers and from 200 to 2,000 mg per animal per day for beef cattle, based on their stage of
development.
• Based on the dosage requirements and penetration of each vitamin type, the market for vitamins is estimated to grow
from $3,038.1 million in 2018 to reach $3,904.3 million by 2025, recording a CAGR of 3.6% until 2025. The overall
demand in the segment will be fueled by growing demand from aquaculture and an increased penetration rate of vitamins
in the poultry and ruminants sectors in developing regions. Also, demand from pet food industry is expected to maintain a
stable growth especially in developed nations.
• Owing to the global shortage of Vitamins A and E in the first half of 2018, their prices have witnessed extreme volatility.
Moreover, the stringent environmental regulations imposed by the Chinese government have led vitamin manufacturers to
quote higher prices. Although supply chain dynamics are likely to improve, prices are expected to witness an upward trend
during the forecast period.
Source: Alltech; BASF; DSM; NRC; Frost & Sullivan
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• The demand for carotenoids is primarily driven by the growing demand for antioxidants and pigments in
aquaculture. According to FAO projections, aquaculture production is expected to record a CAGR of
Carotenoids 2.2% from 2017 to 2026. Growing interest in aquaculture and increased focus on the appearance and
quality of seafood are key elements propelling the demand for carotenoids in the sector.
• In addition to aquaculture, the demand for carotenoids is being driven by the growing demand for
pigmentation of egg yolk and bird color. In various geographies, a bright yellow or yellow-orange color in
egg yolk and broiler skin is often associated with freshness, health, and high product quality.
• Astaxanthin dominates the segment and is the most widely used carotenoid in the animal feed and pet food industry,
followed by beta-carotene and other ingredients such as lutein and canthaxanthin. In addition to imparting color,
carotenoids such as beta-carotene are used for improving milk yield, fertility, and reproduction rates in cattle. The ingredient
is also associated with enhancing immunity in animals.
• Increased industrialization of livestock farming with a growing awareness among livestock producers, especially in
developing regions, is expected to propel growth in this segment. The carotenoids market is estimated to reach
$973.7 million by 2025, recording a CAGR of 3.7% from 2018 to 2025.
• The price point for carotenoids varies based on the source. Natural carotenoids are priced higher than the synthetic
alternatives. Prices also vary based on the ingredient type, as some carotenoids (such as astaxanthin and beta-carotene)
have become commodities, while others are highly specialized. Prices are expected to increase during the forecast period,
driven by a shift toward natural ingredients.
Source: FEFANA; BASF; Frost & Sullivan
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Key Takeaway: Rising demand for high-quality meat products and increased focus on color and
appearance of animal products drive the demand for vitamins/carotenoids across end-use industries.
Vitamins Segment: Percent Revenue Forecast Carotenoids Segment: Percent Revenue

by End-use Industry, Global, 2018–2025 Forecast by End-use Industry, Global, 2018–2025
9.5% 9.9%
Poultry Poultry
12.8% 35.6%
10.0% Swine 10.5% 40.5% Swine
12.0% 35.0% 23.3%
40.0%
22.5%
Ruminants Ruminants
18.0%
17.8% Aquaculture Aquaculture
15.0%
25.0% 12.0%
Others (Pet & 14.5% Others (Pet &
Equine) Equine)
24.3% 11.8%
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• The penetration of vitamins and carotenoids is higher in poultry due to a higher demand for
high-quality poultry products.
• Reduced use of pastures and increased indoor production activities drive the need for
supplementing swine feed with vitamins. The higher use of B vitamins in premixes drives the
overall demand for vitamins in swine diets.
• Adoption of intensive practices for cattle farming is further expected to drive the demand for
vitamins/carotenoids in the dairy industry.
• Aquaculture remains the primary end-use industry for both vitamins and
carotenoids.
• For farmed fish products, quality and appearance are the primary consumer
criteria. Thus, with the growth of the aquaculture industry, the demand for
carotenoids, such as astaxanthin and canthaxanthin, which are widely used
for their coloration and nutraceutical properties in salmonoids and
crustaceans, is expected to increase.
• Increased awareness among pet owners regarding the nutritional content of pet food and demand
for highly functional and premium food products are expected to drive the demand for vitamins
and carotenoids.
• Among essential vitamins, there has been a strong focus on choline. The role of choline in the
prevention of cognitive disorders and reduction of fatty acid accumulation in the liver, as shown by
different studies, is a key factor driving its growth.
• Carotenoids (e.g. beta-carotene) have witnessed stable demand in both dog and cat food due to
their antioxidant activity. However, the growing trend of feeding homemade food to pets poses a
key challenge for the processed pet food and ingredient manufacturers.
Image Source: Pixabay Source: Waltham; Alltech; Frost & Sullivan
K318-88 87
Key Takeaway: A shift in the demand for natural alternatives among consumers and focus on
expanding footprint by offering a broad range solutions among manufacturers are expected to drive
growth in the feed vitamins/carotenoids segment.
• In 2016, BASF announced its plans of expanding the company’s Vitamin A production capacity by 1,500
metric tons. The plant is expected to be commissioned by 2020 owing to the complexity in the production
processes. It will be located at Ludwigshafen, Germany and integrated into the company’s existing Citral
Verbund operations. The key objective is to meet the growing demand for Vitamin A across different
end-use industries. In 2018, BASF announced its plans to lift force majeure for its Vitamin A and E animal
nutrition products in a phased manner, removing a major part of it by Q4 2018.
• Following the suspension of ethoxyquin (EQ) as a feed additive by the European Commission (EC)
directive on June 2017, BASF launched a line of next-generation carotenoid formulations, Lucantin® NXT,
for animal feed in the EU in 2018. The formulation replaces EQ, which was used as a stabilizer, by propyl
gallate (PG) and butylhydroxytoluene (BHT) or tocopherol. The product will be launched in other
geographies eventually.
• In 2018, Balchem Corporation—through its wholly owned subsidiary, Balchem Italia—acquired Bioscreen
Technologies, a privately held manufacturer of encapsulated and fermented feed nutritional ingredients.
Bioscreen’s processes will be integrated with Balchem’s animal nutrition and health business segments
that focus on encapsulated nutrients, including choline and trace minerals. The objective of the company
is to strengthen its choline footprint by offering encapsulated choline products.
• The primary trend expected to impact the vitamins/carotenoids segment is the shift toward natural
alternatives. A growing demand for natural alternatives and perception against the use of synthetic
additives in animal feed and pet food among consumers are expected to drive innovations in this space.
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• In 2018, a Germany-based joint venture established by EW Nutrition and Acies Bio has announced that
its technology of converting dairy by-products into Vitamin B12 is ready for industrial production and
commercialization. The company has unveiled its patented fermentation technology that uses acid whey
as a substrate for food-grade, non-GMO (genetically modified organism) microbes. According to the
company, the Vitamin B12 produced through this process is in its natural form, as no toxic substances are
used during the extraction process. The Vitamin B12-enriched biomass formed through the process can
thus be used directly as a component of animal feed premixes.
• Patent trend analysis highlights that companies and universities are focusing on developing encapsulated
vitamin premixes for controlled release and using alternative stabilizers in vitamin composition.
• A patent filed by BASF in 2016 (WO2018015346A1) discloses the application of propyl gallate as a
stabilizer in vitamin preparation. The objective of the invention is to replace EQ in vitamin premixes, as it
was banned by the EC for use in the EU. The invention claims a powdered vitamin composition comprising
an effective amount of propyl gallate to stabilize the composition.
• Patent applications filed on encapsulation technologies include the one filed by the North Carolina State
University and Jefo Nutrition, Inc. in 2016 claiming a method of encapsulation of feed composition
comprising a vitamin premix (WO2018089516A1). The invention discloses a feed composition comprising
a controlled-release lipid matrix to protect the nutrient from damage in the gut or during processing.
Another patent filed by Guangzhou Great Biological Tech Co., Ltd. (CN105831427A) in 2016 discloses a
coated microcapsule vitamin composite for animal feed applications. The objective of the invention is to
enhance the stability of the vitamin premix and increase the availability of the nutrients in the gut.
• A number of patent applications have been filed claiming different compositions of carotenoids for
improving the color of eggs and other poultry products. Moreover, filing of patents focusing on carotenoid
composition for fish feed has gained traction in the last two years.
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Organic Acids Segment—Growth Opportunity
Return to contents
K318-88 90
Key Takeaway: Regulatory stringency on the use of antibiotics for growth promotion in animal feed
will propel the demand for organic acids.
Organic Acids Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Need

End of $3,319.8 Million (2025) Industry Medium-High
Forecast
Compound Degree of
Annual 5.6% (2018–2025) Competitive High
Growth Rate Rivalry
Top Growth Factors

The recent regulatory ban on using antibiotic growth promoters (AGPs) in animal feed by the US government and
1
growing consumer awareness in this regard will drive the demand for organic acids.
Blends of different organic acids are expected to outperform single acids in terms of demand and value due to the
2 rising demand for highly synergistic solutions that offer multiple advantages such as growth promotion, yield
enhancement, and bacterial growth prevention.

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Key Takeaway: The demand for organic acids is expected to maintain stable growth in developed
economies, whereas it is expected to catapult in developing nations driven by the rising demand
for antibiotic alternatives.
Organic Acids Segment: Percent Revenue Organic Acids Segment: Percent Revenue
by Region, Global, 2018 Forecast by Region, Global, 2025
RoW RoW
18.5% 19.4%
North
North America
America 23.2%
24.0%
APAC
22.5% APAC
23.9%
Europe
Europe
33.4%
35.0%
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Key Takeaway: High market positioning of organic acid blends by market participants and rising
demand for antibiotic alternatives in feed and silages are expected to propel growth in this segment.
by Category, Global, 2018 by Forecast Category, Global, 2025
Organic
Acid Blends
Organic 61.3%
Acid Blends
60.0%
Single Acids Single Acids

40.0% 38.7%
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• Organic acids are primarily used as feed acidifiers and forage/grain preservatives. They are also gaining
Total acceptance as a potential alternative to AGPs due to their antimicrobial activity, capability of stabilizing gut
Organic microflora, and ability to improve the health and performance of animals.
Acids
• The primary factor driving the demand for these acids in animal feed is the growing regulatory stringency on the
use of antibiotics. Following the EU, where the use of antibiotics for growth promotion was banned in 2006, the US
announced a new rule of ‘judicious use’ of antibiotics in 2017. This made the use of medically important antibiotics
for growth promotion in feed illegal. The US also passed a Veterinary Feed Directive (VFD) that regulates the use
of all medically important antibiotics for disease prevention under the control of veterinarians. Such steps in
curtailing the use of antibiotics along with the mounting pressure for manufacturing high-productivity animal feed
are expected to drive the demand for AGP alternatives such as organic acids.
• The market for organic acids is estimated to reach $3,319.8 million by 2025, recording a CAGR of 5.6% from 2018
to 2025. The most common organic acids used in animal feed include propionic acid, formic acid, and lactic acid.
Other acids that hold considerable potential include butyric acid, malic acid, benzoic acid, citric acid, and fumaric
acid.
• Research has shown that organic acid blends have higher efficacy compared to single acids. Although the activity
Blends of the blends is dependent on the type and level of inclusion of single acids, research substantiates that the organic
acids segment is dominated by blends.
• Moreover, competitive analyses have shown that while the market for blends is highly fragmented with a number of
local and regional players, the market for single acids is highly consolidated with a few large manufacturers (such
as BASF, Perstorp AB, Corbion, and Eastman Chemical Company).
• The market for organic acid blends is expected to reach $2,033.9 million by 2025, recording a CAGR of 5.9% from
2018 to 2025.
• A price trend analysis suggests that prices of blends vary based on the composition of single acids. The average
bulk price for single acids varies from $1.2 to $1.8 per kilogram depending on their type.
Source: BASF; FEFANA; Frost & Sullivan
K318-88 94
(continued)
• The market for single acids is estimated to reach $1,285.8 million by 2025, recording a CAGR of 5.1%.
Primary • The market is primarily driven by a high demand for propionic and formic acids, followed by lactic acid.
Single Propionic acid is primarily used as a preservative in compound feed and a silage additive due to its
Acids antimicrobial and mold inhibitory properties. Adequate supply and ease of use have been the major
drivers for its dominance in the feed market.
• The demand for formic acid is expected to propel due to its increased application as an antibacterial
agent in the animal feed sector in addition to its conventional use as a preservative.
• Growing demand for these single acids led companies, such as BASF and Perstorp AB, to increase the
prices of both propionic and formic acids in the Europe, Middle East, and Africa (EMEA) region in 2017.
BASF increased the price of its 85% formic acid by $283 per metric ton and that of propionic acid by
$170 per ton.
• Other acids that are currently used in small concentration but hold considerable potential in animal feed
Other
include butyric acid, fumaric acid, malic acid, citric acid, and benzoic acid. There is significant inclination in
Single
the industry toward exploring different acids for their antimicrobial properties and assessing their potential
Acids
as an alternative to antibiotics.
• Among short-chain fatty acids, butyric acid has particularly received attention. Its demand in the feed
industry is expected to soar due to the host of functions it performs. Studies have shown that butyric acid
and its salts stimulate digestive enzyme production, enhance the development of intestinal villi, reduce
acute inflammatory responses, increase gastrointestinal tract (GIT) retention time, inhibit cancer cell
growth, and activate host defense peptides in both poultry and swine. Another study conducted by
Shandong Agricultural University has shown that the use of butyric acid in broilers can reduce the quantity
of feed by 2%, while maintaining the same bird growth. Such increased research interest is expected to
drive the industrial application of the acid.
Source: BASF; FEFANA; Frost & Sullivan
K318-88 95
Key Takeaway: Poultry and swine are expected to be the key consumers, with aquaculture expected
to offer considerable growth opportunity.
by End-use Industry, Global, 2018 Forecast by End-use Industry, Global, 2025
& Equine) & Equine)
3.0% 2.4%
8.0% 8.6%
Poultry Poultry
32.0% 32.2%
Ruminants
Ruminants 17.2%
19.0%
Swine Swine
38.0% 39.6%
K318-88 96
• The segment is driven by poultry. However, the demand for organic acids is also strong in the
swine sector as there is a strong market opportunity for antibiotic alternatives. According to a
consumer survey conducted by Feed International, the demand for antibiotic-free pork is on
the rise, and companies such as Tyson Foods are already addressing it.
• In ruminants, the demand for organic acids is mainly driven by the application of these acids in
Livestock the ensiling process–a forage preservation method. Formic acid and propionic acid are the key
silage preservatives used in the ruminants sector.
• The demand for organic acids in aquaculture is expected to surge as the penetration
rate for these acids is projected to increase due to a stricter stance on the use of
antibiotics in fish diets.
Aquaculture • Acidifiers in aquaculture support higher growth rates, increase protein digestibility,
improve immune response, and reduce mortality; thus improving animal performance,
increasing farm profitability, and reducing antibiotic requirements. With a rising global
demand for seafood and expected growth in aquaculture, the demand for organic acids
is projected to soar during the forecast period.
Others
(Pet and • The demand for organic acids in the pet and equine sector is low in terms of growth promotion. However,
Equine) there is a market for preservatives, where acids (such as lactic acid and citric acid) are used for the
preservation of pet food. The market is small and its growth is expected to be driven by growth in dog and cat
populations, rather than technology adoption.
“Although organic acids provide a potential alternative to antibiotic growth promoters and can be used for
disease prevention, it should be noted that they are not a replacement for antibiotics and cannot be used
for disease treatment.”
Product Manager - Acids, North American Organic Acid Manufacturer
Group I Source: FAO, FEFANA; Feed International; Frost & Sullivan
K318-88 97
Key Takeaway: Innovation in terms of new acid chemistries and encapsulation/coating technologies
is expected to drive segment growth.
• In 2018, Novus International launched its zootechnical feed additive, Avimatrix® Z in the European
Union. The product is a blend of benzoic acid, calcium formate, and fumaric acid and has been
approved by the EU as a feed additive for improving the zootechnical performance of chickens for
fattening and chickens reared for laying.
• In 2017, Perstorp launched new organic acid, ProPhorce Valerins, based on glycerol esters of valeric acid for animal feed
applications. The company has collaborated with Ghent University, Lund University, and the Southern Poultry Research
Group to develop an understanding on the mode of action of short-chain fatty acids. As a part of the next steps, the
company plans to conduct larger commercial field trials with ProPhorce Valerins to assess its impact on the feed
conversion ratio.
• In 2017, BASF and SINOPEC announced the capacity expansion of their state-of-the-art propionic acid plant at the
Verbund site, BASF-YPC Company Limited, a 50-50 joint venture in Nanjing, China by 2019. With this expansion, the
annual production capacity of the site will increase to 69,000 metric tons, enabling the company to maintain its position as
a key producer of propionic acid in Asia. The primary objective of this expansion is to cater to the growing demand for
feed grain preservatives in Asian countries, especially in India and China.
• To cater to the growing demand of poultry producers, DSM introduced VilliMax 70, a highly concentrated form of sodium
butyrate in 2017. The acid salt is specially coated with high lauric-acid fat and recommended for use in both conventional
and antibiotic-free broiler and turkey programs.
• In 2017, Cargill developed a fermented vegetable feed for aquaculture rich in organic acids (such as lactic acid,
citric acid, and gluconic acid), which can be used to prevent the spread of early mortality syndrome.
• In 2017, Dow Chemical Company announced its plans to expand the capacity of its propionic acid facility in Texas in
order to cater to the growing demand for propionic acid in animal feed.
Source: Trouw Nutrition; Frost & Sullivan
K318-88 98
• Of late, companies have been focusing on innovation in terms of increasing the bioavailability of
organic acids in the animal gut. For example, Biomin has developed a novel organic acid mix
comprising butyric acid glycerides that ensures the release of butyric acid in the small intestine, thus
bypassing its gastric digestion. The glycerides of butyric acid also ensure a higher concentration of the
active ingredient compared to the encapsulated product.
• Industry inclination toward the development of blends that can target multiple microbes is driving innovation in the
sector. A study conducted by Trouw Nutrition in collaboration with the Ministry of Agriculture Feed Industry Center, China
evaluated and compared the effects of two mixed organic acids with AGPs on the performance, serum immunity,
intestinal morphology, and microbiota of weaned pigs. The study highlighted that pigs fed with organic acid blends
showed similar growth performance as pigs fed with AGPs, suggesting that AGPs could be potentially replaced by
organic acids in weaning pigs.
• A patent analysis highlighted trends of using coating technologies for protecting organic acids. A patent application,
KR20180085273A, filed by Morningbio Co., Ltd. in 2017 claims a method of coating of organic acids for application in
livestock feed. The coated acid is shown to achieve higher production efficiency compared to uncoated ones.
• Another patent, CN106107055A, filed by Hunan Jingtian Tech Ind. Co., Ltd. in 2016 claims an enteric coating of butyric
acid to enable sustained release and prevent bad odor.
• Among key market participants, Perstorp filed a patent application in 2016, WO2017200479A1, claiming a broad-
spectrum preservative for animal feed. The preservative composition includes propionic acid, glyceryl propionates,
hexanoic acid, and, optionally, minor amounts of alkali metal salts that protect different types of feed materials from
different kinds of microbes. The invention is aimed at creating a broad-spectrum blend that can be used in different
types of feed and against different kind of microbes.
K318-88 99
Organic Trace Minerals Segment—Growth Opportunity
Return to contents
K318-88 100
Key Takeaway: Research supporting increase in the bioavailability of organic trace minerals
compared to inorganic minerals will bring about a paradigm shift in demand.
Organic Trace Minerals Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Market Size $716.2 Million (2018) Customer High
Need

End of $1,084 Million (2025) Industry High
Forecast
Compound Degree of
Annual 6.1% (2018–2025) Competitive High
Growth Rate Rivalry
Top Growth Factors
Positioning of organic trace minerals as potential alternatives to AGPs is expected to boost demand. However, the
1
primary reason for growth in the segment is rising demand for highly bioavailable sources of trace minerals.
Higher demand for organic zinc and manganese in livestock species to improve the performance of animals is
2
expected to drive market growth.

K318-88 101
Percent Revenue and Volume Forecast by Region
Key Takeaway: With increased market consolidation in North America, demand for organic trace
minerals in the region is expected to grow. Europe, however, is expected to witness slow growth.
Price remains a key constraint, especially in developing regions.
Organic Trace Minerals Segment: Percent Organic Trace Minerals Segment: Percent
Revenue Forecast by Region, Global, 2018–2025 Volume Forecast by Region, Global, 2018–2025
16.7%
18.8%
30.7% 31.4%
17.0% 19.5%
30.5% 31.0%
Europe Europe
APAC APAC
25.5%
25.0% 23.0%
RoW 22.5% RoW
27.5% 27.0%
27.1% 26.8%
K318-88 102
Key Takeaway: There is an increased focus among companies on organic selenium due to its role in
Vitamin E metabolism and rising demand in poultry and other livestock segments.
Organic Trace Minerals Segment: Percent Organic Trace Minerals Segment: Percent
Revenue Forecast by Category, Global, 2018–2025 Volume Forecast by Category, Global, 2018–2025
11.0% 6.3%
11.2% 6.0%
20.0%
17.1% Zinc 42.3% Zinc
43.7% 20.0%
Copper 42.0% Copper
17.2% 43.4%
Manganese Manganese
Iron Iron
Others 17.9% Others
13.9% 13.7% 18.0%
14.5% 14.0%
14.2% 13.5%
K318-88 103
Discussion
• Trace minerals play an important role in aiding metabolic functions in animals. These are broadly
Organic
categorized as inorganic and organic minerals. Inorganic minerals are the common sulfates, oxides,
Trace
chlorides, and carbonates; and organic minerals are chelated forms of these minerals. The primary trace
Minerals
minerals used in animal feed and pet food include zinc, copper, manganese, and iron. The other minerals
gaining momentum are selenium, chromium, and cobalt.
• Increased bioavailability and high levels of livestock performance upon supplementation are the key
demand drivers for organic trace minerals to inorganic trace minerals. The chelation of trace minerals
with organic compounds, such as amino acid or hydrolyzed protein, prevents their interaction with other
minerals in the gastrointestinal tract and other ingredients in feed, thereby increasing their availability and
gut absorbance.
• The volume demand for organic trace minerals is expected to reach 322.8 thousand metric tons by 2025,
registering a CAGR of 3.9%. The market is expected to reach $1,084 million by 2025, surging at a CAGR
of 6.1% from 2018 to 2025.
• According to the NRC guidelines, the dosage of different trace minerals varies based on the species and
Organic growth stage of animals. For example, the average feed supplementation requirement for organic zinc is
Zinc estimated to be within 0.25 kg/MT of dry feed.
• Based on the dosage requirement and penetration of organic minerals in the animal feed and pet food
sector, zinc is estimated to account for the highest share in terms of both value and volume as of 2018.
The market for zinc is expected to record a CAGR of 6.2% from 2018 to 2025, with the volume demand
projected to register a CAGR of 4% until 2025.
Source: EFSA; NRC; Frost & Sullivan
K318-88 104
• Zinc is primary used in animal feed for improving immunity and reproductive capacity. With rising demand for
Organic high-quality meat products, the market is expected to witness a strong demand for organic zinc. The livestock
Zinc industry is expected to remain the key driver of this demand as most of the livestock feed has low zinc
bioavailability.
• The EU regulation, 2016/1095, which came into force in 2016 curtailed the amount of zinc in animal feed due
to environmental issues. The regulation is expected to impact the demand for zinc in animal feed in the short
term.
• Organic iron, the second-most important trace mineral in animal feed, is expected to register a CAGR of 6%
Organic from 2018 to 2025. Its volume demand is expected to witness moderate growth at the rate of 3.9% until 2025.
Iron • Iron serves as a constituent in proteins and as a cofactor for many important iron-dependent enzymes. Iron
deficiency leads to stunted growth and anemia; and the demand for this mineral is particularly high in weaning
pigs and grower birds in poultry.
• Companies such as QualiTech Corporation are trying to increase consumer awareness on organic iron. Iron,
in general, is perceived to be available through different food sources to animals. However, companies
manufacturing organic iron are contesting on the bioavailability of iron in feed sources and trying to enhance
the penetration of the mineral further.
• The demand for copper, another essential trace mineral, is expected to be negatively impacted due to
Organic stringent environment regulations. The EU has approved a new regulation 2018/1039 that recommends
Copper reduction in the maximum copper content in feed for piglets, cattle, and dairy cows. The regulation that came
into effect in 2018 is expected to dampen the demand for copper in the short term.
• Organic copper is expected to register a CAGR of 5.8% until 2025 in terms of value, with its volume demand
projected to record a CAGR of 3.4% from 2018 to 2025.
Source: EFSA; Frost & Sullivan
K318-88 105
• Manganese is required for normal skeletal development and reproduction, and its availability through feed
Organic material is low. Studies have shown that manganese requirement in broilers and turkey is much higher
Manganese (60 mg per kg) compared to cattle (growing cattle: 20 mg per kg of diet) and swine (4 mg to 20 mg per kg
of diet), and it is critical to supplement poultry feed with manganese to prevent any deficiency. With rising
demand for high-quality poultry meat, the demand for organic manganese is expected to be driven
primarily by the poultry sector.
• Thus, the market for organic manganese is expected to register the highest CAGR of 6.4% from 2018 to
2025. The volume demand is expected to record a CAGR of 3.8% until 2025.
Other • Other organic trace minerals that are gaining importance include selenium, chromium, and cobalt. Rising
Organic demand for high-quality meat products and a growing demand from the aquaculture sector are propellers
Trace of innovation in this space.
Minerals
• In particular, the demand for organic selenium is high in poultry. This is primarily due to its importance in
maintaining reproductive efficiency and controlling the overall antioxidant system, which aids in increasing
meat shelf life by reducing drip loss.
• Another factor expected to drive the demand for selenium is the higher price volatility of Vitamin E.
Selenium has been shown to play a critical role in regulating the cellular antioxidant system and can
overcome symptoms of Vitamin E deficiencies. As prices of feed Vitamin E are expected to witness an
upward trend, the demand is expected to slow down, propelling the demand for selenium.
• Regulatory reforms limiting the use of some of these minerals and increased adoption of enzymes in
animal feed are some of the key challenges expected to impact organic trace minerals demand.
Source: NRC; Adisseo; Frost & Sullivan
K318-88 106
Key Takeaway: Research supporting the role of organic trace minerals in preventing several
diseases in livestock is the key driver for this segment.
Organic Trace Minerals Segment: Percent

Organic Trace Minerals Segment: Percent
Revenue Forecast by End-use Industry,
Revenue by End-use Industry, Global, 2018
Global, 2025

& Equine) & Equine)
4.5% 3.7%
9.5% 9.4%
Poultry
Poultry 39.5%
38.5%
Ruminants
Ruminants 22.4%
22.5%
Swine
Swine 25.0%
25.0%
K318-88 107
Poultry Expected to Drive Overall Segment Demand

• Poultry is expected to drive overall demand in the organic trace minerals segment. Growing
demand of high-quality meat and dairy products and rising awareness of the benefits of
supplementing diets with trace minerals are expected to drive the demand.
• Moreover, companies, such as Novus International, are actively looking at new applications to
further increase the penetration of trace minerals in the poultry sector. For example, the company
has recently established the role of its MINTREX brand of minerals in reducing the incidence of
myopathies, such as white striping and woody breast, in poultry.
• Changing cattle faming practices, especially in developing countries, such as India, and growing
demand for dairy and meat products are the principal factors driving the demand for organic trace
minerals in ruminants feed.
Emerging Opportunity for Market Players in Aquaculture

• There is a growing demand for seafood as a source of Vitamin A, iron, and zinc in human
nutrition. Thus, farmers are striving to improve the micronutrient intake of fish to avoid
deficiencies. These factors are likely to influence the demand for micronutrients in aquaculture.
• The growing momentum for antibiotic-free animal products is further expected to drive the
demand for trace minerals in aquaculture.
Demand Expected to Remain Slow in Pet and Equine Segment

• As pet food ingredients, trace minerals have been shown to play an important physiological role.
They are necessary to maintain body functions and optimize health, growth, reproductive
performance, and immune response.
• Despite the proven health benefits, demand in the sector is expected to remain sluggish during
the forecast period due to the growing inclination among owners toward feeding their pets simple
whole food with less supplements. Trend of ‘free-from’ food products is expected
to impact the market.
Source: Novus International; Frost & Sullivan
K318-88 108
Key Takeaway: Bonding of trace minerals with different organic chelates, such as glycine and
polymers, offers a key emerging opportunity. Additionally, hydroxy trace minerals are expected to
gain considerable traction in the feed industry.
• In 2018, Micronutrients launched IntelliBond® VITAL 5 Cr, the first animal nutrition package containing six
essential trace minerals to support dairy and beef cattle performance. The company is partnering with
Kemin Industries, combining the capabilities of its IntelliBond VITAL 5 trace mineral blend (comprising
zinc, manganese, copper, cobalt, and iodine) and Kemin's KemTRACE® Chromium. The product is
aimed at easing the delivery of trace minerals to diets and improving fiber digestibility and performance.
• In 2018, Kemin Industries announced the approval for the use of its KemTRACE Chromium in beef and
broiler diets in Canada. The Canadian Food Inspection Agency (CFIA) approved the use based on
extensive research conducted by Kemin, making it the only CFIA-reviewed source of chromium
propionate.
• Hydroxy trace minerals have gained considerable traction in this market and offer an emerging
opportunity.
• Trouw Nutrition, a Nutreco company manufacturing animal nutrition products, has described hydroxy
trace minerals as technologically advanced forms of inorganic trace minerals that offer higher stability in
animal feed. Nutreco acquired Micronutrients in 2016. It has further sought to accelerate its growth in the
animal feed additives segment by expanding its product portfolio and including a novel range of hydroxy
trace minerals, IntelliBond.
• Another emerging trend is the demand for mineral glycinates, in which trace minerals are bound to
glycine that is readily absorbed in the gut and gets transported right into the cells. Studies have shown
that supplementing zinc with glycine chelate improves growth performance in pigs and broiler birds.
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• There is increased focus on understanding the role of chelated trace minerals in aquaculture. A recent
study conducted by an international team of researchers from India and Canada explored the use of zinc
oxide nanoparticles with the immunostimulant beta-glucan binding protein in farmed fish diets. The study
highlighted that diets supplemented with the nanoparticles demonstrated improved growth performance
and increased cellular and humoral immune responses in farmed fish.
• Patent analysis highlights a growing focus on the development of novel organic trace minerals with an
emphasis on encapsulation technologies. A patent application, CN107668327A, filed by Guangzhou
Weitejia Bioengineering Co., Ltd. in October 2017 claimed a quercetin metal chelate, an organic acid
metal chelate formed by chelating or polymerizing or complexing of quercetin with trace minerals. The
metal chelate is formed for treating diarrhea in animals with minimal side effects and toxicity.
Source: University of Saskatcehwan & Alagappa University ; Google Patents; Frost & Sullivan
K318-88 110
Probiotics Segment—Growth Opportunity
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K318-88 111
Key Takeaway: Feed probiotics are expected to witness considerable growth in terms of innovation,
propelling market growth.
Probiotics Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Market Size $635.4 Million (2018) Customer Medium-High
Need

End of $1,033.8
(2025) Industry High
Forecast Million
Compound Degree of
Growth Rate Rivalry
Top Growth Factors

Growth in the demand for functional ingredients among pet owners is a key driver for this segment and is expected to
1 propel innovation. Several pet food and ingredient manufacturers have taken keen interest in this segment that has
seen a significant number of product launches in the last couple of years.
In the livestock sector, demand for probiotics in ruminants is expected to witness considerable growth, driven by
2 increased awareness among farmers on the role of probiotics in maintaining healthy gut flora (which is particularly
important for ruminants).

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Key Takeaway: North America is expected to dominate the probiotics market, driven by a growing
awareness among consumers and regulatory stringency on the use of antibiotics.
Probiotics Segment: Percent Revenue Probiotics Segment: Percent Revenue Forecast

by Region, Global, 2018 by Region, Global, 2025
RoW RoW
18.5% 17.9%
North North
America America
35.0% 35.7%
APAC APAC
21.5% Europe 22.5% Europe
25.0% 23.9%
K318-88 113
Key Takeaway: Demand for probiotics in companion animals is expected to grow, driven by
increasing awareness among pet owners and rising demand for functional ingredients.
Probiotics Segment: Percent Revenue Probiotics Segment: Percent Revenue Forecast

by End-use Industry, Global, 2018 by End-use Industry, Global, 2025

& Equine) & Equine)
18.5% 19.2%
Aquaculture Poultry Poultry

38.5% Aquaculture 39.0%
3.3% 3.2%
Ruminants Swine Swine

Ruminants 16.4%
21.7% 18.0%
22.1%
K318-88 114
Percent Revenue Forecast by Ingredient Type and End-use
Industry Discussion
• Probiotics are defined as live microorganisms, which when administered in adequate amounts, provide
a health benefit to the host. The most commonly used strains include bacterial strains of Lactobacillus
Product
(e.g., L. rhamnosus and L. acidophilus), Bifidobacterium (e.g. B. lactis and B. animalis), Bacillus (e.g.,
B. subtilis) and Enterococcus (e.g., E.faecium).
• Increasing customer awareness on the benefits of including probiotics in animal and pet food is expected
to drive the overall demand in the segment. Additionally, growing stringency on the use of antibiotics in
animal feed is expected to increase the demand for probiotics during the forecast period.
• The primary challenge in this segment stems from a limited understanding on the required dosage of
probiotics strains for a significant impact on animal health. While several studies on this have been
published in the last decade, professional opinions are divided on which probiotics are beneficial and in
what quantities.
• The market is expected to record a CAGR of 7.2% to reach $1,033.7 million by 2025. Lactobacillus and
Bifidobacterium are the most widely used probiotic bacterial strains mainly because they are easy to
grow and have simple culturing requirements. There is a renewed interest in Bacillus strains as probiotic
agents. Studies have substantiated that Bacillus strains are more resistant to heat and acidic conditions
than other bacterial strains and can be stored without refrigeration. This makes them highly suitable
candidate for use as probiotics.
Livestock
End-use • In the livestock industry, poultry and ruminants dominate in terms of the demand for probiotics. The rising
Industry incidence of livestock diseases and growing demand for antibiotic-free meat are expected to boost the
demand for probiotics in both poultry and ruminant sectors.
• The probiotics market in ruminants and poultry is estimated to record a CAGR of 7.5% and 7.4%
respectively from 2018 to 2025.
K318-88 115
Percent Revenue Forecast by Ingredient Type and End-use
Industry Discussion (continued)
Aquaculture
End-use
Industry • Several studies conducted in the last few years have substantiated the benefits of using probiotics in
aquaculture. Moreover, growing regulatory stringency on the use of antibiotics and demand for
antibiotic-free products among consumers are expected to fuel the growth in the sector. In 2018,
aquaculture accounted for a share of 3.3% in the total probiotics market and is expected to record a
CAGR of 6.8% from 2018 to 2025.
Others (Pet and Equine)
• The probiotics market for the pet industry has seen strong growth in the last few years, with consumers
becoming increasingly familiar with these ingredients and their health benefits. Probiotics are used to
treat digestive problems, such as diarrhea and digestive upsets, and to calm pets and relieve stress
when they are traveling or boarding/staying at shelters.
• Increased awareness among pet owners and readiness to spend on premium pet food products are the
primary driver for probiotics in the pet industry. Application of probiotics in equine diets is not much
documented.
• Despite heightened interest, there is an ongoing debate regarding the stability of bacterial probiotic
strains in processed pet food. Lax labeling laws for pet food present another key challenge in the sector,
as manufacturers continue to label pet treats as comprising probiotics without establishing the benefits
of the such processed products.
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Key Takeaway: There is an increased focus on assessing the probiotic effect of novel bacterial
strains with renewed focus on Bacillus strains and development of a novel mix for increased efficacy.
• In 2018, Adisseo and Novozymes received approval for the Alterion® product line by the European Food
Safety Authority (EFSA), and the product was launched in Europe the same year. Based on a unique strain
of Bacillus subtilis, Alterion is designed to control gut health in poultry and optimize feed conversion by 2% to
2.5%. Novozymes also announced its plans of launching a second-generation poultry probiotic solution based
on Bacillus strains. The two companies are working on next-generation probiotics, specifically designed for
swine diets. This underscores their focus on establishing Bacillus as the mainstay for feed probiotics.
• In 2017, Novozymes announced a strategic collaboration with Boehringer Ingelheim to develop and
commercialize probiotics for global poultry production. As per the agreement, Boehringer Ingelheim will also
be responsible for the marketing and distribution of Novozymes' FloraMax®, a probiotic product for the US
poultry industry.
• In 2018, Microbial LLC, a company primarily focused on developing and commercializing high-quality pet
New probiotics, launched Profauna 100—a novel multi-strain probiotic solution specifically developed to support
Product digestive health in dogs. According to the product claims, Profauna 100 contains 8 strains of bacteria,
delivering a count of 100 billion live bacteria per gram of powder–one of the highest counts of probiotics
available for dogs.
• In 2018, Phileo, another primary feed probiotic manufacturer, launched Prosaf®—a water-soluble purified
yeast extract for aquaculture. The product is claimed to be rich in bioavailable peptides, free amino acids, and
nucleotides and is designed to stimulate fish growth, improve performance, and enhance disease resistance.
With this product, the company is aiming at tapping emerging aquafeed markets, thereby increasing its
penetration in the space.
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• Lallemand Animal Nutrition presented its novel multi-strain yeast fractions at the XVth European Poultry
Conference held in 2018. The company showed that the product could significantly reduce the impact
of coccidiosis in broiler chickens. It offers an alternative solution for broiler farmers to control coccidiosis.
• Some other key technology platforms that hold potential and future prospects in the probiotic industry include a
nutritional product platform designed to improve microbiome health in livestock and other animals. The platform
was developed by the Connecticut-based start-up, Bactana Animal Health and was based on the company’s
patented FPS-4™, a naturally occurring collection of Pioneer Gut Colonizers™ selected from the Faecalibacterium
prausnitzii bacterial species. In 2017, the company announced its plans to launch products based on its patented
platform in the US market in 2018. However, there has been no update on any product launch or development by
the company till date.
• Another novel technology developed by the US-based start-up, Ascus Biosciences holds considerable potential in
the ruminants sector. The company has developed a novel endomicrobial feed supplement technology, a solution
that uses natural strains of microbes in the rumen of high-performing dairy cows. The technology is based on
feeding the microbes that are naturally existent in rumen and are important for them. The company planned to
commercialize its first product, Galaxis for cattle in 2018 in Latin America, followed by the US. However, the
product has not yet been launched by the company.
• Based on patent analysis for key market participants, a patent application, WO2018167171A, filed by Chr. Hansen
in 2017 was identified that claimed the application of Bacillus subtilis strains as direct-fed microbial in animal feed.
The invention discloses the method for improving one or more animal parameters such as weight gain, feed
conversion ratio, and mortality rate.
• There is a strong focus on encapsulation and coating technologies, especially with respect to probiotics being
developed for pet nutrition. For example, a patent application, CN107821753A, filed by Abram (Jiangsu) Animal
Health Co., Ltd. in 2017 claimed a method for the formation of granular probiotic preparations that can be easily
dissolved in water or mixed with pet food as a supplement.
K318-88 118
Others Segment—Growth Opportunity
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K318-88 119
Key Takeaway: Exploring potential fish oil alternatives could propel growth in an otherwise slow-
growing omega-3 fatty acids market. Prebiotics holds growth potential, provided the consumers are
aware of its benefits.
Others Segment: Growth Opportunity Dashboard, Global, 2018–2025
Degree of
Market Size $566.1 Million (2018) Customer Medium-High
Need

End of $890.7 Million (2025) Industry High
Forecast
Compound Degree of
Growth Rate Rivalry
Top Growth Factors

1 The demand for prebiotics is expected to be propelled by its high penetration in the pet and ruminant sectors.
Growing demand for omega-3-rich dairy and meat products is expected to propel overall demand for omega-3 fatty
2 acids. Growth in aquaculture is also expected to foster overall segment growth. However, price volatility and limited
supply of fish oil are key challenges impacting growth of omega-3 fatty acid segment.

K318-88 120
Key Takeaway: North America is a key market for both prebiotics and omega-3 fatty acids. However,
demand in both the segments is expected to be propelled by growth in developing regions.
Prebiotics Segment: Percent Revenue Forecast Omega-3 Fatty Acids Segment: Percent Revenue
by Region, Global, 2018–2025 Forecast by Region, Global, 2018–2025
7.7%
15.9%
8.0%
20.8% 15.0%
36.7%
37.6%
20.0% 36.5% North America
North America 40.0%
Europe
Europe 27.3%
25.0% APAC
APAC
RoW
RoW
35.5% 20.0%
34.8% 19.2%
K318-88 121
Key Takeaway: The demand for prebiotics is expected to be propelled by a rising demand for dietary
fiber and research supporting its benefits in animal and pet nutrition. The omega-3 fatty acids
market is expected to record sluggish growth, given the volatile supply dynamics.
Others Segment: Percent Revenue by Others Segment: Percent Revenue Forecast by
Category, Global, 2018 Category, Global, 2025
Omega-3 Omega-3
Fatty Acid Fatty Acid
13.4% 11.1%
Prebiotics Prebiotics
86.6% 88.9%
K318-88 122
• Prebiotics are defined as non-digestible poly- or oligo-saccharides that promote the growth of beneficial
Prebiotics lactic acid bacteria in the colon and exert antagonism to potentially dangerous bacteria such as
Salmonella and E. Coli by limiting their proliferation. The primary prebiotics being used in animal feed
include fructooligosaccharides (FOS), mannan-oligosaccharides (MOS), and inulin.
• Increased awareness among livestock producers and growing demand for high-quality meat products are
the primary factors expected to augment the demand for prebiotics in the livestock segment. Studies
have shown that prebiotics can modulate gut microflora in both ruminants and non-ruminants and
improve performance. They can thus be used as an alternative to AGPs. Growing stringency on the use
of antibiotics globally is expected to augment the demand for such potential antibiotic alternatives.
• The market for prebiotics is projected to reach $791.9 by 2025, recording a CAGR of 7.1% from 2018
to 2025, with inulin driving the overall market. The demand for FOS is driven by its association with
increasing the feeling of satiety in animals, which should help combat the growing problem of obesity and
diabetes, especially in companion animals.
• The role of omega-3 fatty acids, such as EPA and DHA, is well-established in animal nutrition. These
Omega-3 essential fatty acids enhance fertility, sperm count, and viability in young animals. They improve skin
Fatty Acid conditions, growth rate, and feed conversion. Moreover, the ingredient increase the omega-3 content of
meat and eggs, thereby addressing the demand in human nutrition.
• In pets, inclusion of omega-3 fatty acids helps manage skin and joint inflammations and aids in the
development of vision and brain in young cats and dogs.
K318-88 123
(continued)
• Fish oil is by far the largest source for omega-3 fatty acids, with more than 80–85% of omega-3 fatty
Omega-3 acids being supplemented through fish oil. However, rising prices and supply volatility of fish oil are
Fatty Acid expected to restrict its use in animal feed. Moreover, changing climatic conditions and events such as El
Niño are further expected to restrain fish oil supply. According to Marine Harvest, the proportion of fish oil
being used in the diets of commercial salmon dropped to 9% in 2017 from 24% in 1990 in Norway.
Another study conducted by the University of Stirling in 2015 showed that the average levels of DHA and
EPA in farmed salmon in the UK halved in 10 years to reach 1.36 grams.
• According to GLOBEFISH, Peruvian fish oil prices peaked at $2,600–2,800 per metric ton in the second
quarter of 2017. The prices are expected to remain volatile in 2018 and maintain an upward trend during
the forecast period due to lower fish yields.
• Given the growing concerns on supply dynamics, the industry is looking for fish oil alternatives to cater to
the demand for omega-3 fatty acids in animal feed. Use of microalgae and genetically modified oilseeds
is being explored for deriving fatty acids. However, concerns on the economic viability of these alternative
sources and restrictions on using GMO-derived products in the EU are key challenges that manufacturers
need to analyze carefully as they remain primary deterrents in animal feed and pet food sector.
• Owing to the industry restraints, the market for omega-3 fatty acids is expected to record moderate
CAGR of 3.8%, reaching a market value of $98.7 million by 2025.
Source: Stirling University; Marine Harvest; FAO; Frost & Sullivan
K318-88 124
Key Takeaway: Growth in aquaculture will be the key driver for omega-3 fatty acids, whereas
growing demand for premium pet food products is expected to propel the demand for prebiotics.
Prebiotics Segment: Percent Revenue Forecast Omega-3 Fatty Acids Segment: Percent Revenue
by End-use Industry, Global, 2018–2025 Forecast by End-use Industry, Global, 2018–2025
17.3% 9.8% 11.7%

Poultry
18.0% 35.5% Poultry 10.0% 12.0% 2.8%
3.0%
35.0% Swine
7.9% Swine
14.5%
8.0%
15.0%
Ruminants Ruminants
28.0% 11.0% 61.2%
28.7%
60.0%
Others (Pet & Others (Pet &
10.6% Equine)
Equine)
K318-88 125
• Growth in the prebiotics segment is primarily driven by a higher demand in monogastric species, such as
poultry. Growing demand for high-quality, antibiotic-free poultry meat drives the demand for prebiotics.
Livestock
Additionally, an increased number of clinical studies substantiating claims of improved growth
performance of layers and broilers with prebiotic supplements (such as inulin) is expected to fuel growth.
• The demand for prebiotics in ruminants is estimated to be stronger compared to the swine sector. A
number of studies corroborating the benefits of supplementing prebiotics such as MOS and FOS in
ruminants, especially in pre- and post-weaning calves, is expected to fuel demand.
• Studies have also shown the positive impact of prebiotics in enhancing milk yield and performance of
dairy cattle, which is further expected to propel the demand.
• The demand for omega-3 fatty acids is expected to remain moderate in the livestock sector. Higher
demand is expected in the dairy industry, driven by the growing demand for eggs and milk fortified with
omega-3 fatty acids.
• Regulation on the use of antibiotics in aquaculture for growth promotion will be the biggest driver for
Aquaculture prebiotics during the forecast period. Growing research in the last five years on the use of prebiotics in
aquaculture is expected to propel growth in the sector.
• There is high demand for diets rich in protein and omega-3 fatty acids among a growing number of health-
conscious individuals, which in turn is expected to drive the demand for omega-3 fatty acids in
aquaculture.
• The market for omega-3 fatty acids in aquaculture is expected to record a CAGR of 4.1% until 2025,
whereas demand for prebiotics in the sector is expected to surge at a CAGR of 6.9%.
Source: FAO Globefish; Frost & Sullivan
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• Higher demand for premium pet food and inclination toward functional ingredients are expected to drive
Others the demand for both prebiotics and omega-3 fatty acids during the forecast period.
(Pet &
Equine) • The demand for prebiotics in pets is primarily characterized by their ability to improve gut health and
increase satiety, which helps combat the growing problem of obesity and diabetes in companion animals.
• Omega-3 fatty acids help in maintaining healthy skin, promote a strong immune system, and aid cell
growth in both cats and dogs. As pets cannot synthesize these essential fatty acids, it is important to
supplement their diets with these acids.
• According to the National Research Council (NRC), both omega-3 and omega-6 fatty acids are important
in pet diet and the role of these fatty acids in maintaining pet health is based on the total quantity of each
of these in the diet and their ratio. NRC recommends a ratio of 2.6:1 to 26:1 (omega-6 to omega-3 fatty
acid) in pet food.
• Fish oil and fish meal are the primary sources of omega-3 fatty acids in pet diets. However, rising
concerns regarding the sustainable supply of fish oil is expected to drive the demand for alternatives,
such as algal oil, to cater to the demand for omega-3 acids.
Source: Purina; NRC; Frost & Sullivan
K318-88 127
Key Takeaway: Strong demand for fish oil alternatives is expected to propel innovation in omega-3
fatty acids, with a technological push for algal and GMO plant oils.
• In 2017, DSM and Evonik established a joint venture, Veramaris to produce EPA- and DHA-enriched
algal oil for salmon aquaculture and pet food applications. In 2018, Veramaris announced that
commercial quantities of EPA- and DHA-rich algal oil would be ready for sale in 2019. The product will
offer a sustainable alternative to fish oil and fishmeal. The plant will reportedly cater to 15% of the annual
demand for EPA and DHA from the salmon aquaculture industry.
• Scout and Zoe’s, an all-natural pet treat company, launched a new line of pet food treats, Carpius
Maximus, in collaboration with HORN Animal Nutrition. The product line includes chewable strips—Carp
Spears—and crunchy carp skins—Carp Planks—for both canines and felines. As carps are a rich source
of omega-3 fatty acids and amino acids, the product offers an alternative to fish oil or fishmeal.
• As there is a rising demand for alternative sources of omage-3 fatty acids, companies are also exploring
plant-based sources. For example, Nufarm—a Melbourne-based company that harvested 1,600
hectares of algae-infused canola plants in 2017—is planning to achieve commercial volumes from the
2018-2019 crop cycle and targets to sell its first output to the aquaculture industry in 2019. Other
companies investing in omega-3-rich plant oils include Cargill and Dow Chemical Company.
• In 2017, Corbion completed the acquisition of TerraVia, a manufacturer of microalgae-based omega-3

fatty acid. Later in 2018, the company signed an agreement to buy TerraVia’s joint venture
partner, Bunge. Terravia and Bunge partnered to establish SB Renewable Oils, a joint venture operating
a facility in Orindiúva, Brazil, which specializes in the production of algae ingredients, including
omega-3-rich oil, for aquaculture and animal feed.
Source: Devenish & RCSI; Frost & Sullivan
K318-88 128
• Patent analysis suggests stronger focus on the derivation of omega-3 fatty acids through alternate
sources, including genetically engineered plant oils and algal oils. Patents filed by key market
participants in the last two years include, but are not limited to, the following:
• A patent application filed by Devenish Nutrition Limited, WO2018002374A1, in 2016, claims an animal
feed composition comprising omega-3 fatty acids derived from algal oil. Another patent filed on similar
lines by DSM and Evonik, WO2018013670A1, in 2016, claims a cost-effective method of omega-3 fatty
acid extraction from algal oil to achieve a high quality and concentration of polyunsaturated fatty acids.
• A patent application, WO2017210426A, filed by Cargill that is actively working on developing

omega-3-rich canola for aquaculture got published in 2018. The company, in collaboration with BASF,
has developed an engineered strain of canola seed that can produce omega-3 fatty acids. The patent
claims a method of producing the fatty acid using engineered strains of canola seeds, which provides
the company with the sole rights of selling canola-derived omega-3 acid for fish feed.
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The Last Word
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K318-88 130
The Last Word—3 Big Predictions
Changing Demography: Owing to strong growth in emerging economies and developing nations,
such as India and Southeast Asian countries, their market for animal and pet nutrition ingredients
1 will outperform that of the developed economies in terms of demand. Latin America is expected to
be one of the key regions and record strong growth for some of the animal feed ingredients.
End-application Demand: Poultry is expected to be one of the key end-use industries due to a
shift in demand from pork and beef products. Aquaculture is also expected to record significant
growth due to the rising demand for seafood, especially in China and other Asian countries.
2 A changing regulatory framework is expected to fuel the demand for AGP alternatives such as
organic acids, organic trace minerals. Additionally, a growing demand for functional ingredients
is expected to propel the demand for probiotics and prebiotics in both animal feed and pet food
sectors.
Inorganic vs. Organic Growth: The market is fragmented, with a number of Chinese players
active in each product segment and global players such as DSM, ADM, BASF, and Cargill. In
3 general, market participants are looking at both organic and inorganic growth strategies for
expanding their footprints globally and innovating to keep up with changing industry requirements.
Higher level of vertical integration is expected and market consolidation is expected in the industry.
K318-88 131
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K318-88 132
Appendix
Return to contents
K318-88 133
Learn More—Next Steps
• Learn more about Frost & Sullivan’s Agriculture & Nutrition Research
• Talk to an analyst
• Explore the Growth Excellence Matrix 2.0
K318-88 134
List of Exhibits
Exhibit Slide Number

Total Animal and Pet Nutrition Ingredients Market: Market Segmentation, Global, 2018 14
Total Animal and Pet Nutrition Ingredients Market: Market Segmentation Description, Global, 2018 15
Total Animal and Pet Nutrition Ingredients Market: Value Chain, Global, 2018 18
Total Animal and Pet Nutrition Ingredients Market: Key Drivers, Global, 2019–2025 21
Total Animal and Pet Nutrition Ingredients Market: Key Market Restraints, Global, 2019–2025 27
Total Animal and Pet Nutrition Ingredients Market: Revenue Forecast by Category, Global, 2015–2025 31
Total Animal and Pet Nutrition Ingredients Market: Volume Forecast by Category, Global, 2015–2025 32
Total Animal and Pet Nutrition Ingredients Market: Revenue and Volume Forecast by Category, Global,
33
2018–2025
Total Animal and Pet Nutrition Ingredients Market: Revenue Forecast by Region, Global, 2015–2025 35
Projected Per Capita Meat Consumption, Europe, 2017–2025 38
Projected Change in Production, Europe, 2025 vs. 2015 38
GDP Growth Projections in ASEAN, China and India, APAC, 2018–2022 40
Total Animal and Pet Nutrition Ingredients Market: Percent Revenue Share by Company, Global, 2018 43
Total Animal and Pet Nutrition Ingredients Market: Success Factors, Global, 2018–2025 55
Amino Acids Segment: Growth Opportunity Dashboard, Global, 2018–2025 57
Amino Acids Segment: Percent Revenue by Forecast Region, Global, 2018–2025 58
Amino Acids Segment: Percent Volume Forecast by Region, Global, 2018–2025 58
K318-88 135
List of Exhibits (continued)

Amino Acids Segment: Percent Revenue Forecast by Category, Global, 2018–2025 59
Amino Acids Segment: Percent Volume Forecast by Category, Global, 2018–2025 59
Amino Acids Segment: Percent Revenue by End-use Industry, Global, 2018 62
Amino Acids Segment: Percent Revenue Forecast by End-use Industry, Global, 2025 62
Enzymes Segment: Growth Opportunity Dashboard, Global, 2018–2025 68
Enzymes Segment: Percent Revenue Forecast by Region, Global, 2018 69
Enzymes Segment: Percent Revenue Forecast by Region, Global, 2025 69
Enzymes Segment: Percent Revenue by Ingredient Type, Global, 2018 70
Enzymes Segment: Percent Revenue Forecast by Ingredient Type, Global, 2025 70
NSP Content in Typical Corn-Soybean Meal Broiler Diet, Global, 2018 72
Enzymes Segment: Percent Revenue by End-use Industry, Global, 2018 73
Enzymes Segment: Percent Revenue Forecast by End-use Industry, Global, 2025 73
Vitamins/Carotenoids Segment: Growth Opportunity Dashboard, Global, 2018–2025 79
Vitamins Segment: Percent Revenue Forecast by Region, Global, 2018–2025 80
Vitamins Segment: Percent Volume Forecast by Region, Global, 2018–2025 80
Carotenoids Segment: Percent Revenue Forecast by Region, Global, 2018–2025 81
Carotenoids Segment: Percent Volume Forecast by Region, Global, 2018–2025 81
Vitamins/Carotenoids Segment: Percent Revenue Forecast by Category, Global, 2018–2025 82
K318-88 136

Vitamins/Carotenoids Segment: Percent Volume Forecast by Category, Global, 2018–2025 82
Vitamins Segment: Percent Revenue Forecast by End-use Industry, Global, 2018–2025 86
Carotenoids Segment: Percent Revenue Forecast by End-use Industry, Global, 2018–2025 86
Organic Acids Segment: Growth Opportunity Dashboard, Global, 2018–2025 91
Organic Acids Segment: Percent Revenue by Region, Global, 2018 92
Organic Acids Segment: Percent Revenue Forecast by Region, Global, 2025 92
Organic Acids Segment: Percent Revenue by Category, Global, 2018 93
Organic Acids Segment: Percent Revenue by Forecast Category, Global, 2025 93
Organic Acids Segment: Percent Revenue by End-use Industry, Global, 2018 96
Organic Acids Segment: Percent Revenue Forecast by End-use Industry, Global, 2025 96
Organic Trace Minerals Segment: Growth Opportunity Dashboard, Global, 2018–2025 101
Organic Trace Minerals Segment: Percent Revenue Forecast by Region, Global, 2018–2025 102
Organic Trace Minerals Segment: Percent Volume Forecast by Region, Global, 2018–2025 102
Organic Trace Minerals Segment: Percent Revenue Forecast by Category, Global, 2018–2025 103
Organic Trace Minerals Segment: Percent Volume Forecast by Category, Global, 2018–2025 103
Organic Trace Minerals Segment: Percent Revenue by End-use Industry, Global, 2018 107
Organic Trace Minerals Segment: Percent Revenue Forecast by End-use Industry, Global, 2025 107
Probiotics Segment: Growth Opportunity Dashboard, Global, 2018–2025 112
K318-88 137

Probiotics Segment: Percent Revenue by Region, Global, 2018 113
Probiotics Segment: Percent Revenue Forecast by Region, Global, 2025 113
Probiotics Segment: Percent Revenue by End-use Industry, Global, 2018 114
Probiotics Segment: Percent Revenue Forecast by End-use Industry, Global, 2025 114
Others Segment: Growth Opportunity Dashboard, Global, 2018–2025 120
Prebiotics Segment: Percent Revenue Forecast by Region, Global, 2018–2025 121
Omega-3 Fatty Acids Segment: Percent Revenue Forecast by Region, Global, 2018–2025 121
Others Segment: Percent Revenue by Category, Global, 2018 122
Others Segment: Percent Revenue Forecast by Category, Global, 2025 122
Prebiotics Segment: Percent Revenue Forecast by End-use Industry, Global, 2018–2025 125
Omega-3 Fatty Acids Segment: Percent Revenue Forecast by End-use Industry, Global, 2018–2025 125
K318-88 138
The Frost & Sullivan Story
The Journey to Visionary Innovation
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The Frost & Sullivan Story
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Growth Opportunities in the Global Animal and

Pet Nutrition Ingredients Market, Forecast to 2025

Stringent Regulatory Paradigms and Consumer Awareness Regarding

Global Visionary Science Research Team at Frost & Sullivan

Section Slide Number

Section Slide Number

Section Slide Number

Section Slide Number

Section Slide Number

Section Slide Number

Author: Smriti Sharma

• Regulatory stringency on the use of antibiotics is expected to shape the

Source: Frost & Sullivan

Vitamins and Organic Trace

Lysine Carbohydrases Vitamin E Single Acids Zinc Prebiotics

Threonine Phytases Vitamin D Copper

Valine Carotenoids Others

Animal and Pet

• Enzymes are macromolecules composed of polymers of amino acids connected by amide

Source: Frost & Sullivan

Animal and Pet

Managed Care Strategies

• Historical price trends

Source: Frost & Sullivan

Speciality Feed Additives / Pet Key Companies

Speciality Feed Additives / Pet Food Ingredient

Drivers 1–2 Years 3–4 Years 5–7 Years

Growing per capita consumption of meat products with high

Strong growth in the livestock feed industry in developing regions

Regulatory ban on the use of antibiotics as growth promoters in

Rising consciousness among owners regarding the health of their

Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan

Source: FAO; Alltech; Frost & Sullivan

Source: APPA, Waltham, Frost & Sullivan

• A 2017 clinical survey by the Association for Pet Obesity

Restraints 1–2 Years 3–4 Years 5–7 Years

Volatile additive prices can negatively impact the demand for

A stringent regulatory framework in developed regions and

Growing demand for superfoods in pet nutrition coupled with the

Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan

Source: BASF; US Department of Agricultural Outlook; Frost & Sullivan

A Stringent Regulatory Framework in Developed Regions and Disparity Between Developed

Revenue ($ Million) Total Animal and

Source: FAO; USDA; Alltech; Frost & Sullivan

Projected Per Capita Meat Consumption, Projected Change in Production,

1.8 1.9 2.0

Percentage Change in Production

60.0 Poultry Beef & Pig Sheep/Goat

0.0 2015 2025 2015 2025 2015 2025 2015 2025

GDP Growth – Annual

• China is a key driver, dominating in terms of both production and

Amino acids accounted

Amino acid segment

Source: ASIQ; Frost & Sullivan

Amino Acids End-use Industry

Adisseo X (Protected) X (Ruminants)

Kemin Industries X (Protected) X (Protected) X (Ruminants)

Vitamins/Carotenoids End-use Industry

Enzyme Types End-use Industry

Organic Acids End-use Industry

Organic Acids End-use Industry

Trouw Nutrition X (Range of blends of organic acid) X

Cargill X (Range of blends of free carboxylic acids)