Nutrition business: Having 30 percent market share

The additive market is usually shared among two, at mostthree, major players, but even a small market share is enough to yield somehandsome profits.

Early in my career, I realized that there is a certain point after which it becomes counterproductive trying to penetrate further any market. Take for example any feed supplement, being a premix, concentrate, or base mix. A market share of 30 percent is considered by most sales people I have talked to as the absolutely maximum in a developed market. Any newcomer should consider themselves lucky if they manage to secure even 5 percent of their market in the first couple of years, whereas most suppliers never reach two-digit market share.

When it comes to nutrition additives, the pictures is a bit distorted. Early birds get the lion’s share for as long as it takes competition to come up with a less expensive “copy” or alternative solution. This usually lasts for two to three years, but during that time most additives tend to lose their initial appeal, whereas new ones tend to appear, even if only for improved versions. As for market share, in my opinion, the additive market is usually shared among two, at most three, major players, with minor ones having less than 5 percent of the pie. But, given the respectable margins of this business, even a small market share is enough to yield some handsome profits, especially if the initial marketing, registration and customer education has been done by others.

Now, these are my thoughts, but I would be more than interesting to read about yours; so please take the time to leave a comment.

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