Key Trends Shaping the Phytogenic Feed Additives Market

The global phytogenic feed additives market size is estimated to be USD 753.1 million in 2020 and is projected to reach USD 1,098.5 million by 2025, at a CAGR of 7.8% during the forecast period. The market has a promising growth potential due to several factors, including the increase in awareness among the livestock breeders regarding plant-based animal feed products and stringent government regulations regarding animal nutrition.
The use of phytogenics in feed has increased drastically after the ban on feed antibiotics by the European Union (EU) in 2006. Along with the ban on antibiotics, numerous health benefits of feed phytogenics, such as an increase in feed intake and improvement of the gut function of livestock, are driving the market globally. The growing organic meat demand in developing countries, such as India and China, is expected to fuel the growth rate of the phytogenic feed additives market.

The essential oils segment is estimated to dominate the global feed phytogenics market, by type, in terms of value, and is projected to grow at the highest CAGR between 2020 and 2025. The numerous benefits of essential oils, such as producing digestive enzymes, improving gut histology, and antibacterial characteristics, are driving the market for essential oils in the livestock sector.

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The poultry segment is estimated to account for the largest share of 45.4% in 2020, in terms of value. It is projected to grow at the highest rate during the forecast period since phytogenics are intensively consumed by broilers for better gut health and have a high feed conversion rate as compared to other livestock types. Poultry in the Asia Pacific region is also witnessing the highest demand, as consumers in Taiwan and Indonesia are adding white meat instead of red meat to their diets

The European region is projected to grow at the highest CAGR during the forecast period. Factors such as the prohibited use of antibiotics in feed, stringent regulations imposed by the European Commission on synthetic feed additives, and growth in the consumption of phytogenics in livestock feed, to enhance feed palatability and livestock performance, are projected to drive market growth in the coming years.

COVID-19 Impact on the Global Phytogenic feed additives Market

The market includes major Tier I and II suppliers like Cargill, Incorporated, Delacon Biotechnik GmbH, BIOMIN Holding GmbH, Bluestar Adisseo Co., Ltd. and Natural Remedies. These suppliers have their manufacturing facilities spread across various countries across Asia Pacific, Europe, North America, South America, and RoW. COVID-19 has impacted their businesses as well. Though this pandemic situation has impacted their businesses as well, there is no significant impact on the global operations and supply chain of their phytogenic feed additives. Multiple manufacturing facilities of players are still in operation.

Market Dynamics

Driver: Encapsulated technology enhances the proficiency of phytogenic feed additves

Phytogenic feed additives have positive effects on livestock health but are often difficult to process in the feed. Many sources of phytogenics, especially essential oils, are sensitive substances that lose their efficacy and efficiency, owing to their vulnerability to high temperatures, dusty inclination, significant odor, and oxidative and volatile properties. The emergence of new technologies, such as encapsulation, helps to extend the shelf life of phytogenics. Encapsulation is a modern technology that allows essential oils to have a longer shelf life by protecting them from environmental changes by keeping the liquid, gaseous, or solid substance packed within a tiny millimetric capsule. Along with protection from extreme environmental factors, encapsulation also maintains the key properties, such as enhancement of palatability, stability in the ration, improved digestion, and better performance of the livestock.

Restraint: Cost of active ingredients used in phytogenic feed additives

Essential extracts from various spices and herbs are the most important raw materials used in the production of feed phytogenics. However, the prices of essential oils are high, which has hindered the growth of feed phytogenics. As per the International Trade Center (ITC), in Madagascar, the export price of clove leaf oil was USD 17/kg in 2016. Although the prices were down from the previous year, they were still well above the long-term trend price of under USD 10/kg. Moreover, current adverse weather conditions and a rise in demand for the spice may drive the prices higher.

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Opportunity: Increased popularity of natural solutions for pet food nutrition

Owners of pets remain very sensitive and concerned about the quality, safety, and source of the ingredients involved in the manufacturing of their pet’s food. The trend of keeping pets is also gaining pace these days. Additives play a very important role in enhancing the quality of the feed for pets. Keeping in mind the concerns of pet owners, many companies are coming up with innovative feed products made up of naturally sourced ingredients, such as plants and microbes. Many companies, such as Silvateam S.p.A. (Italy), offer phytogenic feed additives for pet food. Thus, the increase in the pet population, along with concerns of pet owners for pet health and nutrition, would persuade many feed additive players to launch phytogenic feed additives in the pet food segment.

Challenge: Counterfeit products in developing economies

Lack of transparency in patent protection laws and regulatory compliance in various countries has led to the duplication of products. Low-quality products are also introduced in the market by regional or local manufacturers to reap the benefits of the growing demand for phytogenic feed additives. Duplicate and low-quality products can create health issues in the livestock and are a big concern for the producers. There are many small players in the developing markets of Asia Pacific that offer phytogenic feed additives without any brand name, and somehow increase their profits by selling unauthorized duplicate products. These local manufacturers attract feed producers as well by offering lower prices for their low-quality phytogenic feed additives.