Feed Carotenoids Market

Market Overview

The global feed carotenoids market size was valued at USD 9.5 million in 2021. It is estimated to reach USD 12.8 million by 2030, growing at a CAGR of 3.8% during the forecast period (2022–2030). Carotenoids, also known as tetraterpenoids, are organic pigments produced by plants, algae, and photosynthetic bacteria. The feed carotenoids market is propelled by the product's adaptable use in the food and non-food industries. The ingestion of foods containing tetraterpenoids has several health benefits, which increase the demand for the product. The feed carotenoids industry has undergone a paradigm shift over the years, majorly characterized by technological developments for optimizing production and the persistent need for livestock meat and seafood.

Market Dynamics

Global Feed Carotenoids Market Drivers

Expanding Production of Industrial Livestock

The increasing demand for livestock products has been driving significant changes on the supply side to improve livestock product yields. New capital-intensive technologies have raised the level of industrial production of cattle, beef, and poultry meat in production facilities across the globe, especially in countries with land constraints. Industrial-scale livestock production makes optimum use of high-quality feed. It feeds additives to improve production efficiency, increase feed conversion ratios, and enhance animal muscle mass, protein content, meat color, egg yolks, etc.

The adoption of industrial-scale livestock production by a significant number of farmers would mean that the production of feed carotenoids would need to improve to cater to the large production base of high-quality compound feed. This is expected to stimulate the feed carotenoids market globally. Most of the livestock growers in Asia are farmers in small- and medium-scale mixed crop-livestock systems, meaning they grow livestock as a source of regular cash-flow income. In contrast, a consolidated income for these farmers comes from crops. This has further driven farm investments in livestock for an augmented production level. These factors drive the feed carotenoids market.

Growing Export-Oriented Aquaculture in Asia

Aquaculture expanded steadily in Asia-Pacific over the past few years, contributing 40% of the global fishery production. The export-oriented industry in the region has spurred a positive demand for aquafeed and related carotenoids. The exports of aquaculture products in many Asian countries earn half a billion dollars annually, primarily contributing to aquaculture growth. Consequently, the aquaculture share in the global supply is expected to expand so that aquafeed and carotenoids contribute nearly equal amounts by the end of the forecast period.

In countries like India, Thailand, and Vietnam, the increase in commercial aquafeed and aquafeed carotenoid production matched the aquaculture sector's rapid growth in recent years. For instance, official figures from FAO show that aquafeed production in Vietnam increased by four folds from 2008 to 2016. Therefore, the higher international prices of aquaculture products and the rise in international standards are expected to continue influencing the Asian market toward sustainable aquaculture production. This is expected to drive the market during the forecast period.

Global Feed Carotenoids Market Restraint

Challenging Regulatory Conditions

Feed carotenoids are mainly extracted from natural sources, such as seeds, tree bark, and plant leaves. The rising cost of the extraction process and stringent regulations for waste biomaterials and wastewater treatment have had a limiting effect on the market. Carotenoids for human food and other ingredients are among the key industries directly competing for raw materials with the feed carotenoids industry. For instance, carotenoids are becoming a common ingredient for poultry feed and many processed food products, including fortified food. The increased demand for ready-to-eat processed food for humans is expected to strain the raw material supply for the feed carotenoids industry. Therefore, price uncertainties in the feed input industry and intense competition by other sectors due to a constrained supply could potentially impact the feed carotenoids market during the forecast period.

Global Feed Carotenoids Market Opportunities

Increased Meat and Seafood Consumption

Demographic change in Asia-Pacific is primarily characterized by increasing middle-income households and rising levels of income, which have led to changes in the population's dietary preferences, resulting in an increased per capita consumption of meat and seafood. A rise in the intake of animal protein sources is anticipated as public awareness of the value of diets high in protein increases.

Fisheries and aquaculture are increasingly becoming a primary source of protein, foreign exchange, livelihoods, and well-being of the population in Asia-Pacific. According to the Food and Agricultural Organization's (FAO) data for 2010–17, fish production in the region increased from 16.02 million tons in 2010 to 17.9 million tons in 2017. The production solely from aquaculture has continued to grow at a steady rate of 5% since 2016. Therefore, livestock and aquaculture yields are expected to improve by way of the adoption of better feed management practices and increased use of compound feed in the region, which, in turn, would promote the feed industry to use optimum quantities of feed carotenoids, thereby, driving the market during the forecast period.

Regional Analysis

Europe Dominates the Rest of the World

By region, the global feed carotenoids market is segmented into North America, Europe, Asia-Pacific, and SAMEA.l

Europe accounts for the largest market share and is estimated to grow at a CAGR of 3.8% during the forecast period. In Germany, over 60% of agricultural earnings come from the sale of animals. Due to its health advantages, such as its functions in promoting health and reproduction, carotenoids are a popular feed ingredient in Germany. The increase in the cow population has been fueled by the demand for the nation's beef and milk, which has increased the need for ruminant feed. The country's increased poultry meat production has impacted the expansion of the carotenoids in the poultry feed market. Germany began a campaign to limit the use of antibiotics in farm animals in 2014.

The German Drug Act was amended in the same year, with the primary goal of gradually restricting the use of antibiotics in cattle farming. New laws have also been passed in the nation, enabling the appropriate authorities to monitor the frequency of antibiotic use in farm animals. Such limitations put pressure on farmers to switch to natural feed components, which has increased the demand for feed carotenoids in the nation. Additionally, it is anticipated that this will restrict the market for antibiotics used in compound feed.

Asia-Pacific is estimated to reach an expected value of USD 4 million by 2030, growing at a CAGR of 4.5%. The Chinese animal feed additive industry includes feed carotenoids, currently, is heavily influenced by governmental initiatives. The country's efforts to modernize and find efficiencies in its structure and practices and the increasing demand for meat and animal products to meet the protein needs of the growing population are among the significant factors driving the growth of the animal feed market. In 2018, AQSIQ changed the import policy of feed and feed additives, with feed additives that include carotenoids also being impacted by the new policy.

Again, in 2018, the Chinese government launched a pilot program to eliminate antibiotics used in livestock feed by 2020. Implementing this new policy will likely impact the feed industry in the country. Upgradation in the feed formulations, such as raw material composition, for meeting the need of animals at different growth stages, and feed production management, such as the need to upgrade feed processing technology and drive formulation change, are the crucial factors expected to affect the feed manufacturers in the country.

North America is the third-largest region. The use of feed carotenoids in producing poultry eggs is one of the major driving factors in the United States. The health benefits associated with the carotenoids in the egg drive the consumption of eggs in the country. This is also changing the consumer demand concerning the color of yolks, which acts as proof of more carotenoid presence in the egg from the consumer's perspective. Meat, particularly beef, is the centerpiece of the average American dinner.

According to the United States Department of Agriculture (USDA), 2018 set a record of 222.2 pounds per capita of animal meat consumed in the country, breaking the previous year's record of 216.9 pounds per capita. The growing consumption of meat would stimulate cattle production, which, in turn, would bolster the feed carotenoids market in the United States during the forecast period. The growing demand for the livestock products such as eggs and meat is expected to drive the United States feed carotenoid market during the forecast period.

Segmental Analysis

The global feed carotenoids market is categorized into type, animal type, and region.

On the Basis of Type

By type, the global feed carotenoids market is segmented into Beta-Carotene, Lycopene, Lutein, Astaxanthin, Canthaxanthin, and Others.

The Beta-Carotene segment accounts for the largest market share and is estimated to grow at a CAGR of 3.6% during the forecast period. Beta-carotene is a provitamin that helps develop Vitamin A. Vitamin A deficiency can vary widely, including educated feed intake, reduced growth, night blindness, edema, diarrhea, low conception rates, abortions, and stillborn or weak calves. Calves born to cows deficient in vitamin A may have trouble mounting a normal immune response. Due to this, the beta-carotene market is growing. Few major companies, like BASF, are developing Beta-Carotene feed products to improve the fertility of cattle, swine, and horses. The demand for beta carotene feed is higher in the winter due to fertility problems that increasingly occur in many dairy herds. The deficiency of vitamin A and improving research by major payers on Beta-carotene will drive the market in coming years.

The Lycopene segment is the second largest. Excessive heat causes oxidative stress in broilers which is a crucial factor that contributes to decreased production performance and increases the risk of pathological disorders. Soybean and maize-based ingredients are generally used in diet formulations. These ingredients do not contain sufficient antioxidants required to mitigate heat and oxidative stress, due to which lycopene pigmented feed is used. Also, Lycopene supplementation reduced cholesterol levels in broiler meat. As animal rearers are becoming increasingly aware of the importance of natural additives in feed instead of synthetic ingredients, synthetic carotenoids are being replaced with natural ones in feed additives, addressing the health impact on humans and animals, as well as the environment. Such factors drive segment growth.

On the Basis of Animal Type

By animal type, the global feed carotenoids market is segmented into Ruminant, Poultry, Swine, Aquaculture, and Others.

The Poultry segment accounts for the largest market share and is estimated to grow at a CAGR of 3.9% during the forecast period. There is a growing demand for poultry meat around the world. Hence, the growth in the consumption of poultry meat is projected to increase poultry feed production, which in turn may lead to the demand for quality feed carotenoids for the higher carcass yield. There have been numerous outbreaks of disease resulting from infected animals being consumed. In addition to veterinary care for avoiding these occurrences, suitable animal feed additives such as feed carotenoids used in the right amounts and administered efficiently can enhance the poultry's overall health. This factor is leading to the higher demand for the same in the region.

Recent Developments

• August 2022 - BASF inaugurated a new regional production site for its Agricultural Solutions business today. The €40 million multipurpose facility has been designed to handle six different formulation technologies. It will enable BASF to supply crop protection products to farmers across Asia-Pacific from a strategic location in the region. The site has an initial production capacity of 7,000 kt per year – enough to supply over 20 million hectares of farmland – and employs a staff of over 30 technicians and professionals. The site represents a significant investment by BASF in Singapore, which now has four production facilities in the republic.
• August 2022 - As part of a Series B round, Sea6 Energy Pvt. Ltd. (the firm) is receiving investments from Aqua-Spark, a Dutch investment fund focusing on the worldwide aquaculture industry, and BASF Venture Capital GmbH, the corporate venture company of BASF SE, Germany. Bangalore, India's Sea6 Energy, which was created in 2010, is where it is based. The enterprise is a pioneer in cultivating and processing tropical red seaweed. Tata Capital Innovations Fund is one of the additional current investors. With this contribution, Sea6 Energy will have spent INR 1,402 million, or around USD 18.5 million, on its Series B transaction.