High demand from downstream markets helped the industry maintain revenue growth
Los Angeles, CA (PRWEB) August 06, 2013
The Rendering and Meat Byproduct Processing industry has benefited from growing demand from downstream markets in the five years to 2013. Industry operators render animal fat, bones and meat scraps for use in animal food production, industrial machinery, alternative energy and consumer goods. During the past five years, industry revenue is estimated to grow at an average annual rate of 1.0% to $4.4 billion. “Increased demand from animal food production and the rising price of feed have promoted industry growth; however, poor conditions in the global economy have limited the industry's increases, causing an estimated 1.2% revenue decline in 2013,” says IBISWorld industry analyst Andrew Krabeepetcharat. Demand from animal food production is estimated to rise at an average annual rate of 1.8% during the five years to 2013, and this is estimated to increase the demand for processed meat byproducts in food for farm animals and household pets. In this five-year period, the price of feed is expected to increase at an average annual rate of 4.7%, increasing the total revenue for processed meat byproducts. However, because of a weak global economy and trade disruptions after the discovery of diseases related to animal products, exports are estimated to fall at an average annual rate of 2.6% to $1.0 billion in 2013. Consequently, industry expansion was relatively slow during the period.
During the five years to 2018, industry revenue is expected to continue its growth. Expected increases in demand from animal food production and the price of feed are expected to fuel industry growth. Additionally, the industrial production index, which measures the output from the mining, manufacturing, electric and gas industries, is forecast to grow at an average annual rate of 2.8%, prompting rendered animal fats to be used in industrial burners. Consequently, long-term sustained industry growth is expected as oil prices rise and consumers seek alternative energy sources such as biodiesel produced from rendered animal fats.
The Rendering and Meat Byproduct Processing industry is estimated to have a medium level of concentration, with the top four companies making up less than 50.0% of the industry's market share. Market share concentration has increased in the five years to 2013 as competitors consolidated to increase profit margins amid the recession. According to Krabeepetcharat, Concentration increased significantly between 2010 and 2011, courtesy of the merger between Darling International Inc. and Griffin Industries Inc. Although industry concentration is classified as medium, the concentration in localized areas is often very low. This difference is because there are usually few rendering and animal byproduct processing facilities within localized areas. For more information, visit IBISWorld’s Rendering and Meat Byproduct Processing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry renders animal fat, bones and meat scraps. It does not include companies that blend animal fats with vegetable fats; these companies are classified under the Margarine & Cooking Oil Processing in the US industry report (IBISWorld report 31122).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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