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INSIGHT: Feed Additives and Specialist Advice Have Even Bigger Role to Play in Times of High Ingredient Costs – SPACE 2021

Source: Feedindo Logo Final

30 September 2021 – Disruptions in global logistics (as discussed in yesterday’s INSIGHT) have not only resulted in increased lead times and higher costs for containers, but we have also seen the prices of key raw materials and basic feed ingredients skyrocket.

Volatility, especially at feed raw material and micro ingredient level, is making life difficult for specialty animal nutrition suppliers having to increasingly justify the costs of their own products to customers faced with spikes in many of their other input costs.

Customers of the industry are currently under a lot of stress as the situation is consuming a lot of their time and resources. So, the animal nutrition companies interviewed by Feedinfo at the recent SPACE 2021 trade show in Brittany are all in agreement that there is a need for solutions on that front.

“The costs of raw materials are very high, and we are increasingly forced to optimise their use and effectiveness. We need to put the animal at the heart of our thinking,” stated Jean-Luc Mousset, President of Techna Group.

“Efficiency of animal nutrition remains a big topic. We can continue to improve. High raw material prices are of huge concern, and we need to keep finding solutions to achieve the right energy and protein balance in feed,” added Emmanuel Bedier, Commercial Director at IDENA. “This also means opportunities for us as we can look at reducing waste and feeding animals without the volatile ingredients that are under the most pressure (e.g. soy) while still obtaining good results.”

“Companies have to do more with less and optimise animal production by being focused on their processes. We have to do what we do best,” went on to say Jefo’s President, Jean Fontaine.

Reducing Europe’s feed protein dependency and using more locally available resources are also compelling strategies in this environment of high costs, argue the companies. For instance, Processed Animal Proteins (PAPs) and insect feed were reauthorised by the European Commission for use in pig and poultry diets in August 2021. Firms see PAPs as an opportunity to reduce protein dependency.

“We are excited about the recent EU approval of insect proteins. It shows the potential of this as a sustainable protein option for feed,” commented Benoît Anquetil, Managing Director of Cargill Animal Nutrition Western Europe.

The discussion of local supply can also be extended to or at least considered for feed additives.

“For example, most of the world's threonine supply comes from China. That can be problematic when there are supply issues,” said Nicholas Guthier, Vice President Europe & Global Key Accounts, Evonik Nutrition & Care.

“Should users of these products always look at lowest prices or should they look more for local supplies? Are the cheapest prices necessarily the best when your partner is unable to deliver?” he asked. “Those are questions we have to consider, alongside of course the sustainability credentials of the products they order.”

Olivier Clech, co-CEO of Nor-Feed, also stressed that the talks about optimal efficiency of feed additives is more long-term in nature: “It is also important to look beyond the initial financial cost of an additive when considering Return on Investment (RoI),” he said.

“The discussions need to go deeper and look at the long-term benefits of additives,” he added, conceding that the RoI discussions are harder for feed additive suppliers to have with their customers right now.

The general belief is that speciality feed additives ought not be lumped into the same basket with the more commoditised ingredients, and that these additives along with specialist advice are even more valuable in times when sourcing ingredients and their subsequent usage must be optimised.

As Caroline Biard, Technical Manager at Phosphea, referred to when talking about her company and the sector more generally: “Our products provide answers to some of the challenges, but the idea is also about bringing more and more technical and precise information and solutions to customers.”

“I’d argue that technical expertise, innovation and rational production methods, working alongside its customers [what is known as “firme-service” in France] has even more value today in this tough environment for raw material costs as we can assist feed producers in their decisions,” said Jean-Marc Pinsault, Managing Director at Techna Group.

“The most important challenge in my view is better technical performance, followed by better environmental performance. Nutrition has a role to play in both,” Pinsault added.

Another French firme-service concurred: “We have an atypical business model. Our involvement with feed additives, premixes and firme-service in helping customers formulate better. It also helps us be more agile and allows us to differentiate ourselves in the market, despite being a relatively small company,” said IDENA’s Emmanuel Bedier.

“It’s becoming more vital to differentiate yourself with product effectiveness,” added Danièle Marzin, Marketing Director at Olmix. “And users are seeking more transparency and traceability of the products they purchase; in our case algal-based solutions.”

According to NUQO’s CEO, Ewenn Helary, customers want more science and transparency.

“Whatever the topic, there is need for a lot more pedagogy,” he said.