Processed Animal Protein Market Size, Share & COVID-19 Impact Analysis, By Source (Poultry, Pork, Beef and Others), Form (Dry and Liquid), and Regional Forecast, 2021 - 2028

The global processed animal protein market size was USD 12.32 billion in 2020. The market is projected to grow from USD 12.56 billion in 2021 to USD 15.21 billion in 2028, with a CAGR of 2.78% during the forecast period (2021-2028). Asia Pacific dominated the processed animal protein market with a market share of 34.9% in 2020.

The global impact of COVID-19 has been unprecedented and staggering, with processed animal protein witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the year-on-year growth of the market was -4.0% in 2020 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to the market’s demand and growth returning to pre-pandemic levels once the pandemic is over.            

The demand for meat and poultry-based products has considerably increased in recent years. As a result, animal waste generated from the meat processing sector has also increased significantly. The increased amount of animal waste generated has raised environmental concerns as waste disposal is becoming increasingly difficult. The meat rendering process converts animal waste such as blood and feather meals to animal by-products, providing a sustainable approach to recycling the trash into animal feed products.   

Raw Material Availability was Significantly affected due to COVID-19 pandemic     

Consumers were seen stockpiling food products in the initial stages of the global COVID-19 pandemic due to the sudden imposition of lockdown in different countries. Public places were shut down to curb the spread of the virus. Additionally, the availability of laborers was also constrained, and transportation was affected. This restrained the availability of raw materials in the market and caused volatility in the prices of the raw materials. Although the COVID-19 pandemic disrupted the supply chain in the initial stages, the price of raw materials was offset by the rising demand for animal feed products in the market.

Additionally, several consumers started to adopt a vegan diet due to rising health concerns amid the pandemic, which also impacted the demand for meat-based products. This factor has put a strain on the availability of raw materials for processed animal protein production.  Furthermore, companies, such as Tyson Foods, improvised their existing supply chain and develop strategies to ensure that the production process remains normal and the productivity of the products is maintained.  

LATEST TRENDS

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Adoption of New Technology for Production of Animal Feeds is Surging the Demand for New Products

Consumer preference for meat and poultry-based products is constantly evolving, which is creating new challenges for industrial animal farms. For example, several farm owners raise concerns about the type and quality of feed fed to the farm animals. With the rising prices of soybean meal, the demand for alternative protein sources such as processed animal protein increases rapidly. To counter this, manufacturers are integrating new tools and technologies to increase production efficiency and address the production challenges faced. For instance, companies, such as Cargill Inc., are adopting new technology to improve their production efficiency. Using the same raw materials, they have been able to increase their productivity by 25%.

DRIVING FACTORS

Increased Meat Consumption and Growing Animal Waste to Drive Market Growth    

In recent years, the amount of meat consumption has risen significantly. The rise in processed meat consumption has led to an increase in the generation of animal waste, which requires proper management. However, disposal of animal waste is a cost-intensive process that involves labor, raw materials, logistics, and disposable land to get rid of waste products. In addition, there are several environmental constraints associated with the disposal of such waste as they may be responsible for contaminating air, water, or ground near them.

Moreover, stringent regulatory measures adopted by different countries increase the cost associated with the disposal of animal waste. The rendering process helps to reduce the wastage of such animal waste (animal by-products) and converts them to valuable products such as fat, blood meal, bone meal, and feather meal, among others. The rendered protein meals and fats products are used by pet products manufacturers and animal feed manufacturing industries. Therefore, the rise in meat consumption and the increased generation of animal waste is boosting the growth of the animal protein market.

Increased Adoption of Pets to Positively Influence Market Expansion

The outbreak of the COVID-19 pandemic and its rapid spread prompted governments across the world to place lockdown in several countries. The adoption of pet rose significantly during the pandemic resulting in demand for nutritious pet food products especially in the U.S. and Europe during the pandemic. Thus, the demand for pet food products, including processed animal protein (PAP), increased among the buyers of pet food products. 

The use of the latest rendering technology in the meat processing companies is enabling companies to develop pet food products rich in flavor and nutrition. Additionally, it also providing a sustainable choice to the environment-conscious consumers due to its low carbon footprint compared to plant-based feed products, which have contributed to deforestation in many countries. Companies are thus, working on developing new product formulations such as Spray-dried plasma powder (SDP) and hemoglobin powder with specific functional properties to improve the health of the pets.

The players in the global animal protein market are thus focusing on the production and marketing of new product formulations rich in amino acids and other essential minerals required for the growth of the body. To increase their production capabilities and innovate new products, the manufacturing companies adopt strategies such as mergers and acquisitions. For instance, in 2018, Tyson Foods Inc. acquired the U.S.-based American Proteins Inc., which enabled the company to increase its current meat rendering capacity. 

RESTRAINING FACTORS

Stringent Regulatory Measures to Restrain Market Growth

Governments across various countries have set up stringent rules to ensure the superior quality of wet and dry animal feed. The strict government rules prompt the companies to develop products that adhere to the regulatory bodies' rules and help them receive the necessary certification required for marketing the products. For instance, under the Federal Food, Drug, and Cosmetic Act set by the United States Food and Drug Administration (U.S. FDA), all feed products provided to farm animals need to be certified by the FDA.

Similarly, in the European markets, the government has approved the use of PAPs in recent years. However, as per the new rule, PAPs are permitted as feed for non-ruminants such as pigs and poultry and are still prohibited in cattle and sheep. 

Such strict regulatory norms are expected to impact the processed animal protein market growth to some extent.

SEGMENTATION

By Source Analysis

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Poultry Products are Leading Revenue Contributors in the Market Owing to Rise in Poultry Consumption

Based on source, the market is segmented into pork, poultry, beef, and others.

In recent years, the demand for poultry-based feed products has increased rapidly. The growth in demand can be attributed to the global market's rising demand for poultry meat and egg products. The chicken-based feed products are not associated with any disease compared to cattle-based products associated with the outbreak of Bovine Spongiform Encephalopathy (BSE). Hence, most countries allow the use of poultry-based processed animal protein for feeding farm animals. Furthermore, poultry-based PAPs have wider acceptance, and cultural barriers are not affecting their adoption as animal feed in the majority of the countries fueling their increased demand in the market.  

By Form Analysis

Dry Segment to Exhibit Fastest Growth as they can be Stored Easily for Long Time Period

Based on form, the market segmented into dry and liquid.

Processed animal feed products such as blood and feather meals are primarily available in powder and pellets feed. Animal owners prefer dry forms as they are easily dissolved in water and mixed with other products. Liquid processed animal proteins are challenging to store and transport compared to the feed products available in solid or granular form.  

REGIONAL INSIGHTS

Asia Pacific is one of the key markets due to considerable livestock production in the region. India, China, and Japan are significant manufacturers of pork, chicken, and beef products and depend on the excellent quality of animal feed to increase their production yield. Hence, this market acts as an opportunity for the processed animal protein manufacturers to increase their profit margin by launching innovative and cost-effective solutions for the farmers.

The U.S. is the largest market in North America. Around 49% of the animal by-products in the country result from the meat processing industry, and are not suitable for human consumption. Thus, these animal by-products are processed into blood meal, feather meal, and other similar products to reduce the ecological impact of animal waste. Also, these animal protein products help produce protein supplements that have application in the feed industry. Additionally, with the rise in demand among pet owners for nutritious pet food products to maintain pet health, the demand for processed animal protein in American pet products industry is increasing rapidly.

American Pet Products manufacturer is one of the major industries that use animal by-products for developing pet food products such as dog foods, cat food products among others. In Mexico and Canada, the export of feed ingredients used in the preparation of pet foods is increasing rapidly. Trade agreements such as the North American Free Trade Agreement (NAFTA) help increase the import and export of rendered meat products between the U.S., Mexico, and Canada. These developments in the region further create opportunities for the manufacturers to adapt and innovate products based on the local demands.

The supportive regulations in the European Union to enable PAPs in animal feed drives the region's growth. With the advancement of technology and scientific studies, PAP’s impact on animals has been safe in recent years. Thus, the government in Europe prompted to lift the ban on the use of PAP as animal feed for animals apart from cattle. Its use is still restricted in cattles as they as responsible for causing bovine spongiform encepelopathy (BSE) disease. The new safety regulations enable the farm owners to adopt them as an alternative to plant-based products used as animal feed in the market.

In South America, Brazil is one of the largest producers of PAP in the market. Brazil has established 500 small-sized rendering plants involved in producing animal by-products. According to Brazilian Renderers data, in 2020, around 43% of 12.07 million metric tons of slaughtered by-products are converted into animal fats and protein meals.

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The adoption of protein-based animal feed products in the Middle East and Africa is increasing significantly. Favorable government policies are adopted to create awareness among the farmers about the use of these products. An increase in the area of arable land in the region presents the opportunity for farm owners to increase production from farms and increase the adoption of PAP as animal feed.

KEY INDUSTRY PLAYERS

Key Players Focusing on Strategic Mergers and Acquisitions to Penetrate New Markets

The processed animal protein market is moderately consolidated, with four or five players accounting for most market share. Some of the significant market players include Tyson Foods Inc., Sonac, and others in producing high-quality fed products for the pet food and feed industry. With the adoption of strategies such as mergers and acquisitions of companies with similar competencies. Also, the companies aim to develop and improve their production process and launch innovative products in the market. Apart from that, the start-ups are adopting the latest technologies to develop high-quality feed products and compete with the major companies in the market. For instance, in 2020, Tyson Foods invested USD 500 million in improving the company's existing technology and adopting automation and robotics to process the meat from the carcasses. With automation, the company also aims to efficiently transfer these products to their respective final destinations for further processing.

LIST OF KEY COMPANIES PROFILED:

• Tyson Foods, Inc. (Arkansas, U.S.)


• Sonac (Darling Ingredients Inc.) (Netherlands)


• Ridley Corporation Limited (Australia)


• BOYER VALLEY COMPANY, LLC. (Iowa, U.S)


• Nordfeed (Izmir, Turkey)


• West Coast Reduction Inc. (Canada)


• Valley Proteins Inc. (Virginia, U.S)


• Sanimax (Montreal, Canada)


• FASA Group. (Brazil)


• Leo Group Ltd. (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• July 2021: Feednova, a Ukraine-based company, announced its plans to launch a plant for processing animal by-products into feed and pet food products. The estimated cost of plant installation is in the range of USD 20 million.  


• September 2020: A Malaysian-based animal feed company, FGV Holdings Berhad, launched ALMA animal nutrition business in the region. 

REPORT COVERAGE

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The global processed animal protein market research report provides a detailed analysis of the market and focuses on key aspects such as competitive landscape, source, form, and region. Besides this, it offers insights into the market trends and highlights key industry advances. In addition, the report covers several factors contributing to the market growth in recent years.

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