Remember November: the eb and flow of consolidation in the feed additive industry
This month it is ‘Remember November’ on the Perstorp Animal Nutrition social media channels. That means we’ll be looking back on how our industry has changed over the years. What did we learn? What did we forget?
Who better to ask than Koen Schwarzer? A respected innovator with over 40 years of experience, working for several of the most prominent key players in feed additives. A man who was at the helm of many innovations over the past decades. Innovations that are some of the most generally accepted solutions today. This week, Koen describes the eb and flow of consolidation in the feed additives industry.
As the young Koen Schwarzer started his career in the end seventies, there were fewer players in animal feed additives. Most of them were producers of single ingredients such as single organic acids, antioxidant molecules, amino acids, antibiotic growth promotors, vitamins, emulsifiers, flavorings, etc. But as news about the success of products based on the synergetic effects between certain single additives (for example antioxidants, mold inhibitors) reached the market, the number of players increased, recalls Schwarzer. ‘Blenders entered the industry, they saw the market potential and started to develop blends of feed additives with very targeted effects, such as preservation, acidification, feed hygiene, gut health, etc. And with the build-up to and eventual ban of AGP’s in 2006 in Europe, the number blenders increased even more’, explains Schwarzer.
A changed playing field
Today, the playing field consists of hundreds of companies offering blends of feed additives. Some local, yet very important, some with international market shares. Consolidation in the industry in the nineties created large players – not necessarily with a background in production, explains Schwarzer. ‘In the nineties integration became more and more common in the industry. Feed producers joined forces, later also with additives or premix companies, integrating vertically. Or chemical producers acquired blending specialists like what Perstorp did when they acquired the production facility in the Netherlands. But there was also a lot of horizontal integration’, adds Schwarzer. ‘Companies started to extend their portfolio by offering a broad range of solutions, combining e.g. amino acids and feed additives, probiotics and enzymes, vitamins and organic acids etc.’
‘To this day there are only a limited amount of companies producing single organic acids and derivatives thereof used as feed additives. However a lot of companies are successfully offering compounded solutions that are not only marketed on what is included in them but on the benefit it will bring to the user’ Koen summarizes. ‘It will be mighty interesting to see the development of this industry in view of changes, adaptation towards consumers changing eating habits and food requirements.’