Why do feed additive manufacturers buy into premix?

Animal Nutrition Views

Ioannis Mavromichalis, Ph.D., gives his views on poultry, pig and dairy nutrition based on his experience as a nutrition consultant with clients around the world.

Why do feed additive manufacturers buy into premix?

Have you noticed the recent acquisitions of nutrition companies (mainly vitamin and trace mineral premix suppliers) by certain feed additives manufacturers? The examples are still few, but the names cannot escape attention. Certainly, this trend will continue.

You may have noticed also that during the last 15 years, many vitamin and trace mineral suppliers have tried to convert themselves into additives suppliers. Instead of repackaging branded additives, they attempted to establish their own "white label" brand. Most such attempts have failed.

It should have also drawn your attention the fact that certain vitamin and (or) trace mineral manufacturers have already entered into the business of becoming premix suppliers (competing with their traditional customers). Not long ago, such manufacturers ventured into marketing their additives, again mostly white label products.

It is a circle, indeed, with the pig producer being in the middle. Large vitamin, trace mineral and additive manufacturers have decided to bypass competition, and they now head towards a single-point of purchase solution. Eventually, we will have a small number of such players that will offer a limited number of options, especially as pig production continues its integration.

What about the suppliers?

What about the suppliers, you might ask, those who purchase straight ingredients, mix them up and sell them as nutrition supplements? An international bank with an interest in anything agriculture has already predicted their demise, about ten years ago if memory does not fail me. And, that’s what we observe today: the removal of the middleman from the nutrition business.

That’s what we observe today: the removal of the middleman from the nutrition business.

The antidote to this inevitable trend appears to be in-house feed manufacturing. Large and very large animal producers who own modern feed mills do not need premixed blends. These operations require straight ingredients, even vitamins and trace minerals bought separately, to mix their own feeds. But, this approach requires in-house knowledge that currently is not there — at least not in all such places with this potential.

It’s certainly an interesting turn of events for the nutrition industry.