The industry has struggled with volatile commodity prices and waning profit margins
Melbourne, Australia (PRWEB) March 25, 2013
The performance of the Prepared Animal and Bird Feed Manufacturing industry is closely related to both agricultural and social trends. According to IBISWorld industry analyst Ryan Lin, “Variations in weather patterns, herd stocks and outbreaks of disease often dictate the wellbeing of stockfeed operations within the industry, as do pet ownership levels for pet food manufacturers.” Despite these uncertainties, the industry has managed to remain resilient over the five years through 2012-13, while also being faced with highly volatile commodity prices and waning profit margins. Growth in global meat consumption and, consequently, herd stocks have primarily sustained modest revenue growth, as the industry battled with dramatic fluctuations in demand and supply conditions.
The Prepared Animal and Bird Feed Manufacturing industry is characterised by a medium level of concentration. Although the industry has a number of small to medium size operators, the majority of its revenue is generated by the major players. IBISWorld estimates that the top four manufacturers will account for approximately 54% of industry revenue, representing a growing rate of concentration over the past five years. This concentration of ownership is primarily a result of 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. “Concentration also varies between product segments,” says Lin. The stockfeed segment tends to be less concentrated as numerous players exist and production tends to be relatively labour intensive. Pet food, however, commands higher brand and customer loyalty; hence, that segment is more concentrated, with the major players fiercely fighting for market share.
Over the five years through 2017-18, growth in the Prepared Animal and Bird Feed Manufacturing industry is expected to be underpinned by the global economic recovery, reflected in increased herd stocks, 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 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. 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.
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) as well as canned pet food.
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
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.