Innovations in Feed Enzymes - Unmet Needs


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Frost & Sullivan analysis of innovations in feed enzymes.

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Innovations in Feed Enzymes - Unmet Needs

  1. 1. Innovations in Feed Enzymes - Unmet Needs Dr. Kaushik Ramakrishnan Shankar Senior Research Analyst Chemicals Materials and Foods 17th August 2010 Frost & Sullivan’s Growth Consulting can assist with your growth strategies
  2. 2. Agenda • Market Overview • Revenue and Volume Trends • Revenues by Geography • Research Services from Frost & Sullivan • Key Challenges • Is there a Need for Innovation? • What is Happening in the Market Now? • Industry Innovations: Round Up • What is Happening in Academia? • The Biggest Opportunity for Growth! 2
  3. 3. Feed Enzymes – Revenue and Volume Trends Phytases are predominant in the feed enzymes market with aa70% volume share and 58% revenue share Phytases are predominant in the feed enzymes market with 70% volume share and 58% revenue share Volume trends Revenue Trends 2006 2009 2016 2006 2009 2015 Feed enzymes are expected to reach $722.4 Million by 2015 with a revenue CAGR of 9.8 % Volume CAGR is expected to be 9.2%, with the market expected to reach 131.2 Million pounds by 2015 Source: Frost & Sullivan 3
  4. 4. Revenue Share by Geography Europe contributes the most to revenues of the total market with aa40% share Europe contributes the most to revenues of the total market with 40% share Feed Enzymes Market : Revenue Share by Geography 40% 7% 7% 5% 15% 13% 13% S.E.Asia China U.S. Europe Australia and New Zealand Brazil India Source: Frost & Sullivan 4
  5. 5. Frost & Sullivan’s Expertise in Feed Ingredients Existing Frost & Sullivan reports on feed enzymes (2010) U.S. Digestive Health Ingredients in Animal Feed Market – N75E European market for Digestive Health Ingredients in Animal Feed – M55C Animal Feed Ingredients studies Existing (2007-2009) Upcoming (2010 – 2011) U.S. Food and Feed Shelf-Life Extension Antioxidants U.S. Market for Shelf Life Stabilizers in Animal Feed Market EU Food and Feed Shelf-Life Extension Antioxidants European Market for Shelf Life Stabilizers in Animal Feed Market European Companion Animal Feed Prebiotics Market U.S. Market for Nutritional Ingredients in Animal Feed Strategic analysis of the European Animal Feed Probiotics European Market for Nutritional Ingredients in Animal Feed Market Strategic Analysis of the U.S. Animal Feed Direct Fed U.S. Market for Feed Phytogenics* Microbials (DFM) Market Industry Outlook – U.S. Pet Food Ingredients Chinese Animal Feed Additives* APAC Animal Feed Additives* European Market for Feed Phytogenics* * - proposed 2011 5
  6. 6. Key Challenges Definitely not under the control of enzyme Can be controlled by enzyme manufacturers manufacturers! with solutions like shifting R&D to cost effective locations in Asia Challenge 1-2 Years 3-4 Years 5-7 Years Volatility in animal feed prices High Medium-High Medium Increase in R&D costs Medium Medium Medium Little or no innovation in product development Low Low Low Source: Frost & Sullivan. This could be a direct result of • Non-existent market requirement for innovation Non- • Increased cost of R&D 6
  7. 7. Is there a Need for Innovation? Decreasing Compound Feed Production Compound feed production in EU fell from 132 Million Tons in 2008 to 127 Million Tons in 2009. Underlying dairy and meat production systems are not contracting by inference, route to market is getting difficult for enzyme manufacturers Increasing Cost of Low Penetration Rate Innovation is A 5% increase year on year in penetration Enzyme Manufacture of enzymes among farmers can increase Farmer resistance to cost of enzymes is Imperative growth by 1% an existing challenge for Maintaining This is difficult to achieve considering that Growth Targets customer base is becoming fragmented Resistance by Farmers to Spend More on Additives - Farmer resistance is due to the challenge that is beyond the control of enzyme manufacturers - Fluctuating cost of feed and increasing cost of production Source: Frost & Sullivan. 7
  8. 8. What is Happening in the Market Now? Heat stability in enzymes has been a buzzword in the industry with nearly all manufacturers focusing on introducing heat stable enzymes Increased use in pelletised feed forms. Increased penetration Heat Stable Heat Stable rates in compound feed, due to higher assured enzyme activity in Enzymes Enzymes final product Improved Improved Specific Specific Lower inclusion rates in compound feed, leading to lower costs for Activity of Activity of farmers. Potential to increase penetration rate Enzymes Enzymes Projecting the effect of new enzymes as therapeutic supports New NSP New NSP Enzymes under conditions of microbial infection in poultry and swine Enzymes increase their penetration Innovation Roundup Company Product Function Year of Launch DSM//Novozymes Ronozyme Pro-Act Protease for Poultry 2008 Danisco Phyzyme XP Phytase 2009 Source: Frost & Sullivan. 8
  9. 9. What is Happening in Academia? Focus of academic research is on improving enzyme functionality XAP (Xylanase, Amylase, Protease) Admixture of phytase with phytase for greater and NSP for greater nutrient utilization in nutrient utilization poultry Phytase + 25- hydroxycholecalciferol (25-OH D(3)) to broiler diets has been shown effective at reducing total Optimum pH and P concentrations in broiler litter Acid stable Phytase as anti- proteolysis phytase from nutritional factor resistance Citrobacter sp chelators In-situ enzyme production Phytase resistant to digestive enzymes in Treatment of corn- shrimp and pigs soybean meal with phytase producing Brewer’s yeast 9
  10. 10. The Biggest Opportunity for Growth Reducing Mineral Phosphorous in Diets Reducing Green House Gas Emissions Decreased feed inputs cost Decrease total N input into the production system Decreased phosphorous runoff Decrease intestinal methane production Environment 2006 2009 2015 Diets based on barley, wheat and canola are higher in NSPs which when substituted with NSP enzymes can reduce intestinal production of methane by microbes Proteases can substantially reduce the amount of Non-protein Nitrogen supplemented in diets of animals, thereby reducing the excretion of urea (excessive N) into the environment. 10
  11. 11. Biggest Opportunity for Growth….. Quantifying Actual Involving all Stakeholders Emission Reductions Potential to access global carbon trade Alternative “route to market” to compound feed manufacturers New Products Tailor-made Promote “Sustainable” Image of for Environment/Nutritional/Dual Benefits Dairy and Meat Production Systems 11
  12. 12. Next Steps Request a proposal for or Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2010: A Frost & Sullivan Global Congress on Corporate Growth, September 12-14 2010, Fairmount Hotel, San Jose, CA ( Register for the next Chairman’s Series on Growth: The CEO's Growth Survey: Are CEO’s in Touch with Reality? (September 7th) ( Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities ( 12
  13. 13. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. Frost & Sullivan’s Growth Consulting can assist with your growth strategies 13
  14. 14. Frost & Sullivan on Twitter and Facebook Find us @Frost_Sullivan on Twitter Become a fan of Frost & Sullivan on Facebook 14
  15. 15. For Additional Information Sarah Saatzer Mark Hicks Corporate Communications Sales Manager Chemical, Materials, & Foods Chemicals, Materials, & Foods (210) 477-8427 (210) 247-2490 Sangeetha Srinivasan Program Manager Chemicals, Materials, & Foods +91.44.42044751 Sangeetha.srinivasan 15