COVID-19
Impact on Animal Nutrition in Food and Beverages Industry
The
novel Coronavirus has profoundly impacted all fields, including the food
industry, healthcare, medical services, animal nutrition industry, automotive,
pharmaceutical, and many others. This pandemic has led to shutdowns of mass
production and disruptions in the supply chain that have impacted the economies
of virtually every nation in the world. The COVID-19 has impacted the animal
nutrition industry by increasing its demand across the global region. The
extended lockdown has affected pet care product demand through e-commerce. The
two major reasons are easy accessibility and the availability of multiple
brands.
For
instance,
·
In the year 2020, spending on pets increased among 34% of pet
owners, compared to 17% who spend less and 49% who did not change their pet
budget
Since
the start of the COVID-19 pandemic, consumers became more inclined towards more
essential nutrients and the feed intake of their animals and pets. Moreover,
there has been an increase in the focus for care and maintenance among pet
owners for a better quality of life thus growing the demand for various
nutritional food products.
All
these factors have helped to boost growth for the animal nutrition market
during the COVID-19 pandemic.
IMPACT ON DEMAND
Feed
manufacturers and producers are prioritizing health, animal immunity, and
safety over productivity and profitability due to this pandemic. They are
looking for specialty feed flavor and sweetener ingredients as they become more
aware of techniques and strategies to manage the health of pets. This pandemic
has provided an opportunity for pet food manufacturers to show their assurance
to their customers by delivering customized support, representing their reliability
and consistency as suppliers, and augmenting their company’s biosecurity
efforts across the board.
Moreover,
there has been a growing number of animals and pet adoption which is further
expected to fuel the demand for the animal nutrition market.
For
instance,
·
The number of families owning a pet has increased by 40 percent
from 2015 to 2019 hence the demand is also expected to increase
Before
the pandemic, pet food was considered comfort food by the animal holders owing
to its feed intake increasing capacity. But due to the COVID-19 pandemic, the
consumers are more inclined towards more essential nutrients and the feed
intake of their pets. This factor has helped to boost the growth of the animal
nutrition market during the COVID-19 pandemic.
AFTERMATH OF COVID-19 AND
GOVERNMENT INITIATIVE TO BOOST THE MARKET
According
to the U.S. Food and Drug Administration (FDA), in terms of the safety of pets,
there is no recent evidence regarding the pet food associated with transmission
of novel coronavirus diseases as the corona is primarily spreading from person
to person through direct or indirect exposure of respiratory droplets.
For
instance,
·
According to the World Organisation for Animal Health,
there haven't been any reports of pets spreading COVID-19 to people
However,
there has been increased concern regarding the quality care among pets by their
owners. As a result, the key pet organization and welfare such as American Pet
Products Association (APPA), the World Pet Association (WPA), the Pet Industry
Distributors Association (PIDA), urged the governments for are taking
initiatives so that the owners could care for their beloved companion animals.
For
instance,
·
In March 2021, the Pet Industry Joint Advisory Council (PIJAC)
drafted an open letter to Federal, State, and Local Government Officials
Regarding Pets and COVID-19 Precautions. This was an appeal urging government
officials to consider the needs of pets and the people who care for them as
they took steps to address the public health crisis
IMPACT ON PRICE
In
the COVID-19, the price of animal nutrition is not much affected due to various
reasons such as the boom of animal nutrition products including pet food. But
with the rising number of cases, is creating a panic situation among growers
and suppliers. Asia-Pacific saw an increasing demand for pet nutrition
commodities, which has resulted in increasing prices of the products.
·
China has witnessed increased swine production despite this
pandemic. According to a recently published report of USDA, swine production
has been increased in April 2020 as compared to April 2019
·
Thailand become the world’s 4th largest exporter of pet
food with pet food exports worth over USD 1.693 billion in 2019
However,
with the massive discount from the e-commerce platform,
the prices for overall animal nutrition products have not changed much since
the start of the pandemic. This will ensure that the market will substantially
increase with the growing demand for the animal nutrition market.
IMPACT ON SUPPLY CHAIN
COVID-19
has printed a negative impact on the global economic outlook in the first
quarter of 2020. The animal nutrition industry suffers from major supply chain
disruption.
There
is an evident lack of supply of various animal nutrition foods, supplements,
and medications such as pet medication and so on.
For
instance,
·
In March 2020, one of the prominent vendors of the feed market,
Evonik, forced Majeure to fulfill the need for amino acids, especially
threonine amino acids. The product of Evonik is facing the issue in the
procurement of threonine due to the shutdown of the city
However,
COVID-19 is accelerating a shift to e-commerce that was already reshaping the
animal nutrition market. Social distancing has generated a surge in online
orders and led to growth for new models like Click and Collect and Third-Party
Delivery. The long-term "stickiness" of this shift will depend on the
ability of thinly stretched online infrastructures to meet demand without long
shipping delays or out-of-stocks. In addition, most of the consumers have been
looking out for products from various internet platforms.
For
instance,
·
According to the survey conducted by American Pet Products
Association (APPA) in January 2020, 15% of the pet owners bought products
through the internet sales channel, which is the second-highest after the
superstore
·
Owing to the pandemic online pet product sales now makeup 30% of
the total market, which has grown to 8 % since 2015
·
According to its earnings report for Chewy, the sales rose
to 47% in the retailer's fiscal year second quarter
·
According to a survey conducted by Packaged Facts of U.S. pet
owners in 2020, 79% of owners said they're using the internet more, with 71%
ordering and buying online more, 56% ordering/buying more with smartphone apps
The
ease of buying products through online channels offers greater flexibility and
safety to the owners of pets. Hence, the benefits offered by the e-commerce
channels that provide accessibility and options to choose from a variety of
products are expected to drive the market in the coming years.
EVENTS CANCELLATION
Due
to the pandemic, the various conferences such as the animal nutritional
conference and the trade show have been postponed or cancelled until further
notice is provided by regulatory authorities. Most of the companies or
manufacturers are organizing online webinars to educate pet owners for a better
quality of life, even during pandemic times.
For
instance,
·
American Feed Industry Association (AFIA) has cancelled their
conference Purchasing & Ingredients Suppliers Conference (PISC), which was
supposed to hold in March 2020. Animal Health & Nutrition Conference held
by VICTAM in Bangkok will be held in July, and the U.S. Poultry and Egg
Association (USPOULTRY) has been postponed
With
this uncertainty caused by COVID-19 regulatory bodies have taken initiatives to
start their conference on the digital platform.
For
instance,
·
Alltech, one of the key players, converted its annual ONE Ideas
Conference to a virtual format
·
In February 2021, The Pure Feed Company Ltd organized a webinar
on understanding how and why to use supplements. This will help the company to
educate the owners and, in turn, increase its business
STRATEGIC DECISIONS FOR
MANUFACTURERS AFTER COVID-19 TO GAIN COMPETITIVE MARKET SHARE
Many
governments are taking initiatives for pet food manufacturing.
For
instance,
·
The Australian standard (AS5812) ‘Manufacturing and marketing of
pet food’ specifies requirements for the production and supply of manufactured
pet foods for cats and dogs. The Standard applies to both Australian made and
imported pet foods and covers the production of pet food from sourcing and
receipt of ingredients to storage, processing (including heat treatment),
packing, labeling, and storage of products to assure its safety for pets
Thus,
owing to these measures that have been taken by many associations, governments,
awareness regarding animal health has been increased which impacts the demand
for feed flavours and sweeteners ingredients in positive terms.
Cambodia’s
government is looking for private investors to help raise domestic animal feed
production. In May 2020, the Khmer Times reported that the Cambodian government
has reduced
its imports of swine from neighbouring countries to support
local swine production. Cambodia imports up to 70% from neighbouring countries
hence, the government is primarily focusing to reduce imports and supporting
local farmers for swine production. In the country, the demand for swine is
about 8,000 per day, out of which local farmers can supply 6,000 per day.
Hence, it is expected to impact demand for feed flavors and feed ingredients
positively
As
the Coronavirus outbreak has impacted the global animal nutrition market badly,
several organizations have taken certain initiatives to provide their products
in the market.
For
instance,
"Our
driving concern is the health and safety of our employees and their families.
We have implemented measures to reduce COVID-19 risk to our customers, our
employees, and their families while doing all we can to continue product supply
to our customers. We are doing everything possible to continue the supply of
Phibro products to our customers in every market while adhering to strict
safety and quality protocols. We have increased our stock of raw materials and
finished products to help ensure a continuous supply. We are in constant
contact with our logistics partners to secure timely shipments to customers. We
require our employees to work from home, where possible. Those who need to work
at our facilities maintain social distancing and, where possible while working
in shifts. Our sales and technical service staff are staying engaged with
customers to service their needs through digital channels as much as possible.
All
employees involved in production or logistics who must work on-site are
adhering to strict hygiene protocols and social distancing, and where possible,
we have implemented split shifts to reduce employee contact. We have also
implemented increased biosecurity protocols for freight carriers who deliver
and collect goods at our facilities."
- Phibro Animal Health
"As
a global manufacturer, we operate in more than 90 countries on six continents,
with manufacturing facilities in places like China, Italy, and Singapore –
countries that have been severely impacted by COVID-19. Kemin remains committed
to ensuring the same level of supply assurance as you are accustomed to. This
type of incident is an anticipated scenario in our global end-to-end supply chain
risk management strategy. We have prohibited all non-essential international
and domestic travel for all our global employees. We are utilizing digital
meetings and telecommunications to conduct business, and we are minimizing
meetings with external parties to only those necessary."
-
Kemin Industries
"We
are making location-based decisions on work-from-home policies based on
individual situations, local regulations, and health official recommendations.
We have business continuity plans for various scenarios and are prepared to
respond if we see potential impacts on our business operations. We are closely
monitoring the situation and are communicating regularly with our employees and
customers through various channels as the situation continues to evolve."
- ADM Animal Nutrition
Barentz
International has entered in acquisition with pet food ingredient supplier
Chicago-based Ingredients Inc.
"This
is a promising new route, from which both parties will immediately benefit from
each other's strengths,"
-Jim Stewart, founder and Managing Director of Ingredients
Inc.
"We
are taking the potential risks of the coronavirus very seriously and are
committed to doing our part to keep our colleagues, their families, and the
communities where we operate safely. We are taking necessary precautions
throughout our business, including:
·
Enhancing hygiene and cleaning protocols in all facilities
·
Implementing a minimal staff model at our critical global
offices and facilities with all employees who can work remotely doing so
·
Prohibiting all non-critical travel for employees and
contractors and all non-business-critical visitation to our facilities
·
Actively screening all visitors, including delivery drivers, for
COVID-19 symptoms
·
Implementing procedures to address potential employee or partner
exposure issues following CDC guidelines for mitigation and reaction,
quarantining, and cleaning
We
are closely monitoring the situation and are communicating regularly with our
employees and customers through various channels as the situation continues to
evolve."
-ADM
CONCLUSION
COVID-19
outbreak has impacted positively on animal nutrition market. The animal
nutrition industry is expected to grow substantially during the coming years,
with the rising awareness among consumers that as pet holders. But due to
the social distancing, start-ups and many producers are facing restricted access
to bring their products in the market. Many pet care manufacturing companies
are taking various initiatives as a part of COVID-19 and creating awareness
among the people. Due to COVID-19, most of the people are staying at home, and
they are getting enough time for taking care of their pets, so they are
inclined to buy pet food and supplement care products through e-commerce
platforms, hence, creating a demand for animal nutrition during COVID-19
pandemic.
Thus,
the impact of the COVID-19 pandemic has been neutral for the pet food market
across many the globe compared to other feed ingredients segments, and hence, a
stable growth can be observed in the industry during coming years, with many
opportunities for new products development for the manufacturers.
