The global feed yeast market size is estimated to account for USD 1.8 billion in 2020 and is projected to reach USD 2.3 billion by 2025, recording a CAGR of 5.1% during the forecast period. The market is driven by factors such as ban on the use of antibiotics in feed as a growth promoter and increasing use of yeast as a nutritional supplement for livestock. Also, rising concern regarding animal health and feed quality has been driving the growth of this market.
COVID-19 Impact on the Global Feed Yeast Market
The feed yeast market includes major Tier I and II suppliers like Associated British Foods Inc., Archer Daniels Midland Company, Alltech Inc., Cargill, Lesaffre, Angel Yeast Co. Ltd., and Lallemand Inc. These suppliers have their manufacturing facilities spread across various countries across Asia Pacific, Europe, North America, South America, and RoW. COVID-19 has impacted their businesses as well. Though this pandemic situation has impacted their businesses as well, there is no significant impact on the global operations and supply chain of their feed yeast. Multiple manufacturing facilities of players are still in operation.
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Restraint: Competition for basic raw materials
The global supply of raw materials for yeast production can have a significant impact on the production of feed yeast and its extracts. The important source of yeast production is based on a sugar by-product, molasses. The shortage of molasses is a major concern for the global yeast market due to the high competition for these raw materials from different industries such as food, pharmaceutical, feed, and others. Such a shortage has arisen due to many reasons—poor sugarcane and sugar beet yield being the major one. Therefore, this is expected to limit its supply in the production of yeast ingredients. With high demand for brewer’s yeast used in bakery and alcohol industries, much more deficit in the availability of raw materials for the manufacturing of feed yeast can further affect the final product price. This would eventually affect the demand for yeast products among feed manufacturers and livestock growers.
Challenge: Commercialization of duplicate and low-quality products
Lack of transparency in patent protection laws and regulatory compliance in various countries have led to the duplication of products. Low-quality products are also introduced in the market by regional or local manufacturers to reap the benefits of the growing demand for feed yeast. Duplicate and low-quality products can create health issues in the livestock and are a big concern for the producers. There are many small players in the developing markets of Asia Pacific that offer yeast-based feed ingredients without any brand name, and somehow increase their profits by selling unauthorized duplicate products. These local manufacturers attract the feed producers as well by offering lower prices for their low-quality feed yeast ingredients.
The increasing awareness of health benefits associated with probiotic yeast has widened the scope of growth for the feed yeast market.
The use of probiotic yeast in ruminant feed resulted in improved health and higher milk production. Similarly, in pigs, yeast triggers an immune response to reduce the entry of pathogens in the body and also reduces the occurrence of post-weaning diarrhea. With the increasing use of probiotics for animal nutrition, growth promotion, and gut health development, the probiotic yeast segment is projected to record the fastest growth, on the basis of type, during the forecast period.
On the basis of livestock, the aquatic animals segment is projected to witness the highest growth in the market.
A rise in fish farming practices in the developing countries of the Asia Pacific due to the increased profits through farmed fish cultivation over the past 10 years. In addition, the increasing fish consumption in regions such as Europe and South America encourages fish farming, which would further drive the market in the aquafeed segment. Supplementing feed yeast in right quantities to aquatic animals leads to an optimal supply of essential nutrients.
The current scenario of COVID-19 is projected to slighlty impact the market growth for feed yeast. The increase in consumption of animal-based products and the rise in concerns pertaining to animal health are factors that are projected to drive the demand for feed yeast. However, the shortage in labor, international trade restrictions and reduced consumption of livestock products are factors that are projected to have a short-term impact on the production and supply of feed yeast. According to Animal HealthCare Centre, USDA report, the companies are focusing on increasing their production capacity post-COVID-19 lockdown to meet supply gaps created in the domestic and international markets due to supply chain hindrances. This encourages various international governments to develop proper sanitary guidelines for feed additive production. Thus, the decline in 2020 in the feed yeast market growth is mainly due to the impact of COVID-19 pandemic. Thereafter, as the restrictions of the government measures are likely to relax gradually, the market is likely to experience a rise in the coming years till 2025 as many feed additive producers have started seeking alternatives to antibiotics. There would be a strong consumer preference for meat products raised on natural feed additives and products, such as probiotic yeast, that also help reduce environmental impact.
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With the introduction of stringent regulations, Europe is estimated to be the second largest market during the forecast period.
The feed yeast market in Europe is driven by the introduction of stringent regulations pertaining to the use of antibiotics in feed. Increasing awareness about the benefits of feed yeast is projected to contribute to the market growth. The high demand for quality and nutrient-rich feed in the European countries has led to the high demand for feed yeast among farmers. Moreover, the European legislators are also concerned about food and animal safety and thus have implemented many safety laws for the same. With high concerns related to animal health, the EU government has put a ban on the use of antibiotic growth promoters in feed due to its negative impact on animal health as well as on the health of human consumers. For the replacement of those antibiotics, naturally-sourced feed ingredients that have antibiotic properties such as feed yeast were developed by manufacturers.
This report includes a study of the development strategies of leading companies. The scope of this report includes a detailed study of feed yeast manufacturers such as Associated British Foods PLC. (UK), Archer Daniels Midland Company (US), Alltech Inc. (US), Cargill (US), Lesaffre (France), Angel Yeast Co. Ltd. (China), and Lallemand Inc. (Canada)
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