Feed Binders Market Dynamics : Drivers, Restraints, Opportunities and Challenges

The global feed binders market size is estimated to account for a value of USD 4.5 billion in 2020 and is projected to grow at a CAGR 3.0% from 2020, to reach a value of USD 5.1 billion by 2025.

The rise in demand for feed due to the increased consumption of livestock-based products is projected to drive the growth of the market. The increasing awareness among manufacturers about the benefits offered by feed binders is projected to drive the market growth during the forecast period. Feed binders serve as an additive that can reduce the dusty and powdery nature of fine ground feed materials. In order to reduce the total operating cost, from manufacturing to its consumption stage, feed binders are observed to increase the health benefits of feed materials, and thus, are widely being opted by feed manufacturers.

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Market Dynamics:
Driver: Strong growth in the compound feed industry

The feed sector plays a crucial part in addressing global food and agriculture issues. Feed manufacturers are becoming more aware of the need to increase the nutritional value of feed products to improve the digestibility of animals to optimum levels. According to the FAO, global compound feed production has been estimated to be about 1 billion tonnes every year. Compound feed can be defined as the final feed product made up of various raw materials and additives. Additives are added to the feed to enhance their nutritional value, shelf-life, and quality. The compound feed industry is growing at a very fast pace, which fuels the need for the development of new additives in the feed market.

According to the International Feed Industry Federation (IFIF), there is a continuous increase in the demand for animal protein from the livestock, dairy, and fish sectors at a global level. The FAO estimated that the demand for food is projected to grow by 60% in 2050, with the expected growth of animal proteins at 1.7% per year. This, in turn, will increase the demand for feed and, in turn, would increase the demand for feed additives such as feed binders

Restraint: Price volatility and availability of raw materials

Binding agents, such as guar gum, corn starch, agar, carrageenan, and gelatin, are highly effective binders but are very expensive to include in the feed. To optimize the cost of feed ingredients, compound feed mixers, or livestock, farmers opt for binders with high-cohesive properties to reduce the amount of inclusion as well as to limit the cost. Cost-effective binders, such as lignosulphonates and clay, are moderately expensive, with very low inclusion levels from 0.2% to 0.8%. Feed products are mostly formulated and designed by limiting the overall cost to sustain their market presence. The prices of raw materials can increase based on the source, extraction process, or the chances of availability in the region.

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 pet food. The trend of keeping pets is also gaining pace these days. According to Agriculture and Agri-Food Canada, 2013, the US has the largest population of pets and has one of the largest pet food markets worldwide. In 2018, Agriculture and Agri-Food Canada quoted the value of the pet food market in Europe, which was worth USD 24.1 billion. It is projected to reach USD 28.1 billion by 2022, with an estimated CAGR of 3.5% from 2018 to 2022. This implies that pet owners are looking for premium products for their pets.

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Challenges: Low-quality products can be a challenge in developing economies

Low-quality products are used by some regional or local manufacturers to reap the benefits of the growing demand for compound feed. Duplicate and low-quality products can create health issues in the livestock and are a big concern for producers. There are many small players in the developing markets of Asia Pacific that offer compound feed without any brand name, and somehow increase their profits by selling unauthorized duplicate products. These local manufacturers attract feed consumers by offering lower prices for their low-quality compound feed.

Leading companies are Archer Daniels Midland Company (US), DuPont (US), Darling Ingredients Inc. (US), Roquette Freres (France), Borregaard ASA (Norway), Gelita AG (Germany), CP Kelco Inc. (US), and Avebe U.A. (Netherlands).

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