Growth in meat consumption and herd stocks has primarily sustained modest revenue growth
Melbourne, Australia (PRWEB) July 26, 2012
The performance of the Prepared Animal and Bird Feed Manufacturing industry is tied to variations in weather patterns, outbreaks of disease, herd stocks and pet ownership levels. Despite these uncertainties, the industry has managed to remain resilient over the past five years while also being faced with highly volatile commodity prices and waning profit margins. Growth in global meat consumption and consequently in herd stocks, has primarily sustained modest revenue growth, as the industry battled with dramatic fluctuations in demand and supply conditions. Further, the outbreak of animal diseases, such as avian influenza and mad cow disease, and the contamination of pet foods have impeded domestic production and demand. This has forced manufacturers to source their products from overseas markets. According to IBISWorld industry analyst Naren Sivasailam, “industry revenue has experienced some mixed results over the past five years”. Since 2007-08, industry revenue has grown by 0.3% per annum. However, revenue has declined over the past two years as the world has struggled with an oversupply issue after global demand fell away during the global financial crisis. During 2012-13, revenue is expected to fall by 0.7% to reach $3.86 billion.
Over the next five years, industry growth is expected to be underpinned by the global economic recovery, reflected in increased herd stocks, rising incomes and consumer sentiment, and a marginal increase in pet ownership levels. Further, advancements in technology and food safety, combined with clever product innovation are expected to alleviate some of the inherent risks associated with weather conditions and potential outbreaks of disease. “The expected increase in pet ownership and disposable incomes will drive demand for pet foods, a segment that is typified by high profit margins and brand-loyal consumers”, Sivasailam adds. Export growth is also anticipated over the next five years, as the economic rise of countries in the Asia-Pacific and South America drive demand for meat and animal feed.
The Prepared Animal and Bird Feed Manufacturing industry is characterised by a medium level of market share concentration. Although the industry has several small to medium size operators, the majority of its revenue is generated by the major players. IBISWorld estimates that the top five players in the industry are Mars Australia, Ridley, Nestle Australia, Riverina (Australia) and Ricegrowers. Concentration has grown due to an increase in acquisitions, along with organic growth for a majority of major players engendered by continued product innovation, strong brand loyalty and aggressive marketing.
For more information, visit IBISWorld’s Prepared Animal and Bird Feed Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
Establishments in this industry manufacture prepared animal or bird feed, including cereal meal, grain offal or crushed grain for use as fodder (from whole grain, except from rice or rye).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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