Just like the world around us, animal health has undergone transformational change in the 21st century. Animals are receiving better care, medicines are becoming more targeted, and diseases have even been eradicated.
There’s no sign that this change will stop soon. Here are the four trends that will drive animal agriculture and petcare in the coming years.The niche global animal health sector is witnessing exciting growth opportunities and consolidation. On the one hand, the opportunity landscape is driven by population expansion, increased demand for animal protein, changing lifestyles and evolving habits. On the other hand, the consolidation is the result of growing compliance and complexity.
The global animal health market size was valued at USD 47.1 billion in 2019 and is expected to exhibit a CAGR of 5.8% during the forecast period. The market is largely driven by a significant rise in demand for protein food and an increase in the incidence of zoonotic and food-borne diseases globally.
This unprecedented rise in disease prevalence has triggered companies to produce advanced vaccines and pharmaceuticals. The high demand has also resulted in a subsequent increase in the number of companies undertaking consistent efforts to control pathogen contamination risks and food-borne diseases, which is contributing to the growth of the overall market for animal health.
For instance, the Innovative Medicines Initiative (IMI) is a public-private partnership to support collaborative research in order to boost innovation in veterinary pharmaceuticals in Europe.
Animal Type Insights
Production animals dominated the market in 2019. The substantial share captured by the segment is a consequence of high concern for food safety and sustainability by government healthcare organizations globally. Policymakers in various countries are striving to achieve total food security, which propels large-scale food production and results in greater rearing of livestock.
Recently, the $26 billion animal health market has moved beyond straight pharmaceuticals and vaccines, with investors pouring $156 million in pet tech startups alone, according to CB Insights. New venture funds are targeting feed nutrition and data technology as well.
So what are the most exciting opportunities in a changing industry? Let’s look at three major growth sectors.
The world population is projected to reach 9.8 billion people by 2050 (a staggering jump from today’s 7.6 billion). Meat production is expected to double by 2020 with the population growth, coupled with changes in dietary preference and rising income levels.
The pressure on farmers to feed more people, with less water and land available, in an environmentally sustainable fashion, will be extraordinary. Livestock production, while increasing, still faces barriers in infectious and parasitic diseases, especially in developing countries while public funding for disease control has been on the decline for decades.
Innovation and biotechnology promise assistance with improved diagnostics and genomics applied to develop next-generation vaccines to prevent disease as well as the development of alternatives to antibiotics tackling disease resistance.
The trend toward antibiotic resistance poses a global threat to humans and animals. Alternative products — vaccines, prebiotics, probiotics and immune modulators, for instance — provide veterinarians and farmers with new options to reduce the use of antibiotics. Their areas of use target herd growth promotion, disease prevention and disease treatment. Major industry players like Tyson and Perdue have already responded to consumer demands for the reduction or elimination of antibiotic use in raising livestock.
Another focus area for livestock production is improving nutrition via feed quantity and quality. Efforts include microbial improvements to soil to make stronger plant nutrients, ways to reduce spoilage, employing microbes to improve animal digestive ability, new mineral and enzyme supplements, and applying gene editing technology to improve nutrient levels in plants.
The flip side of increasing livestock production is an approach to grow the next generation of meat-like proteins or build a market for alternative proteins. Today’s market has witnessed the growth of novel sources of protein, from baking flour made of crickets to the production of meat protein from cell-based cultures. Companies like Memphis Meats and Impossible Foods are earning passionate followings for their innovative approaches to a clean diet that’s friendly to both the palate and a sapped planet.
The livestock sector has no choice but to respond to urgent global demands. The pet segment, however, faces a different challenge: How to cater to pet owners who’ve started seeing their animals as family, and are desperate to help these family members live longer, healthier, more comfortable lives?
In the U.S. alone, 68 percent of households now include a pet, up from 58 percent in 1988. People lavish their pets with love and concern like they do other family members, with the total U.S. pet industry expenditures project to rise almost $6 billion in two years to more than $72 billion in 2018.
Consumer-facing, natural pet products are a booming industry, with middle class owners shelling out the extra dollars to give their animals the same organic lifestyle — from holistic food to natural flea and tick repellents to toys made from non synthetic fibers — they afford themselves. See also the rise of pet insurance, advanced pet surgical procedures, digital devices and specialty pet services to understand how much money pet owners today are willing to spend on man’s best friend.
Animal healthcare sector has witnessed a paradigm
shift to improve the quality of drugs mainly in developed
economies. A significant increase in animal production
has led to improvement of food safety systems in order
to safeguard human health. The rising prevalence of
infectious and parasitic diseases is creating the next
wave of innovation in managing animal health.
medicine and technology are focused on improving
animal health and livestock production. Increasing
demand for poultry and milk products across the globe
is, in turn, driving the demand for feed additives, vaccines
and drugs. Growing urbanisation, changing lifestyle
and increase in per capita income have encouraged pet
ownership as well as increased willingness to pay for pet
These advancements and new technologies have
strengthened awareness, making treatment more
focused towards effective outcomes, thus fuelling the
growth of animal health market.
At a 4.8% CAGR, the global animal healthcare market
is poised to reach US$ 45 billion by 2025 because of
changing government policies and rising awareness
among the general population. The North American
animal industry is expected to remain dominant over
the forecast period due to high penetration of animal
healthcare products with a CAGR of 3.6%. This will be
driven by an increase in the number of government
strategies to promote healthcare policies and is
expected to further fuel the growth of the market.
Europe, the second largest animal healthcare market,
is forecasted to expand at a 4.4% CAGR over the
Management Discussion and Analysis
period, due to high numbers of pet animals, disposable
incomes, animal husbandry practices for meeting ever
increasing demand for non-vegetarian food.
healthcare markets in France and Italy account for onethird of the European market and is estimated to expand
at 4% CAGR over the forecast period, owing to large
population of farm and pet animals. High income of pet
owners as well as availability of pet insurance augment
pet healthcare practices across the country.
Latin America account for 11.5% share in the global
market during 2019 and it is expected to remain same
till 2025 while growing at a CAGR of 5.5%. Asia Pacific
animal healthcare market is expected to witness strong
growth at a CAGR of over 6.3% between 2018-2025 due
to changing economies along with rising prevalence
of animal diseases in this region.
The Indian animal
healthcare market is estimated at ` 70 billion in 2019
with livestock accounting for 55% of the total, poultry
for 40% and companion animals for the remaining
5%. Animal health in India has undergone significant
changes over the last few years because of the adoption
of innovative technologies used for prevention and cure
of farm and companion animals. The business approach
among animal health companies have evolved from
therapeutics to preventive and then from productivity.
Animal Type Takeaway
Animal type segments are categorized as Equine, Dogs, Sheep & Goats, Cats, and Poultry. Among which, dogs accounted for the largest share of the total market, has recorded USD 4.83 billion in 2016.
The demand for dog’s therapeutics is relatively greater than other companion animals and the trend is likely to continue over the future period. Thus, companies are increasingly developing novel therapeutics under this segment.
For instance, in May 2016, European Medicines Agency (EMA) approved Merck’s Bravecto Spot-on solution to treat fleas and ticks in dogs. Later, in July 2016, the company also received U.S. FDA approval for this product under name Bravecto Topical.
Product segment is divided into Vaccines, Pharmaceuticals, Feed Additives, Diagnostics, and Others. Increasing research and development activities coupled with favorable government initiatives has helped the pharmaceuticals segment to be on the top spot. Drugs segment is categorized into Over the Counter (OTC) and Prescription. Whereas, the distribution channel segment is bifurcated into E-commerce, Retail, and Hospitals. The application segment is divided in terms of Clinics, Point-of-Care Facilities, and others.
Regionally, North America accounted for the largest share, closely followed by Europe. Presence of a large number of established pharmaceutical companies that are consistently striving for extensive commercialization of their veterinary products is presumed to be a key factor responsible for growth in both regions.
Asia Pacific region is projected to grow with the highest CAGR owing to the rise in adoption of companion animals coupled with the increasing disposable income.
The Future is Coming
From nearly the origin of our species, history tells us that caring for other living creatures is an innately human act. Innovative ways to protect, treat and tend to the animals means the field of animal health is now evolving to parallel advances in human care. For example, the One Health Initiative urges coequal collaboration between medical disciplines to link human and animal medicines.
Take heed from the advancements all around us. The animal health industry finds itself in a state of major transition and chaos brings opportunity. And we humans continue to find new, innovative ways to live alongside the animals in our lives.