As the decline in livestock numbers across Europe continues, feed antioxidant manufacturers are suffering from lower volumes and lower prices - causing them to look at the natural antioxidant market in an effort to increase revenues.
A report from market analysts Frost & Sullivan suggests that consumer pressure and revised legislation is causing a shift in antioxidant trends. From 2000 to 2009 the €15 million total European antioxidant market is set to grow by a mere 1.7 per cent, while natural antioxidants will experience a compound annual growth rate of 35 per cent, claims the report.
"Consumers are the ones really driving this uptake. While no conclusive evidence has been forthcoming, there has been continued debate over possible health risks involved in consumption of certain synthetic antioxidants. Any potential risks, proven or otherwise in food, drive demand for 'safe' alternatives," said Anna Ibbotson, Frost & Sullivan Food Programme manager. "As economic conditions return to a more healthy state and, as supply and demand become more closely attuned, uptake of natural antioxidants is perceived as a key growth area for the antioxidants sector as a whole," she added.
But, European farmers, in the grip of a recession, are highly price sensitive to the cost of all inputs, and suppliers can only use ingredients that offer a favourable price: performance ratio in comparison with alternatives. So as long as synthetic antioxidant options are effective, low in price and still authorised for use, uptake of naturals, in the present economic climate will be limited, notes the report.
Another key challenge for the industry will be how to keep the costs of feed antioxidants down when facing new pressures from revised legislation. Following scares relating to food safety and the resulting fall in consumer confidence, industry bodies throughout the EU have brought together Good Management Practice (GMP) standards to the animal feed industry. The aim in the longer term is that bodies in different EU member states will have a unified approach to setting and enforcing standards in the quality of feed production. Only suppliers who are registered as certified, as achieving the quality standards required, will be permitted to supply products for use in animal feed production.
"The standards set are reported to be rigorous and will involve suppliers in increased costs to achieve certification standard. Suppliers will have limited opportunity to pass on increased costs to the end-user farmers who are already struggling with economic pressures," explained Ibbotson.
Frost & Sullivan's European Feed Antioxidant Report analyses the market from 2002-2009.