Companion animals drive Sales in Q1' 2015; Future may not be Food Animals!
As more Q1 2015 results are being reported, a common trend visible across the results released so far is – leading AH companies are ever so dependent on Companion Animals’ segment for the “growth”.
Food Animals segment despite its size and scale isn’t the driver anymore barring for a very few companies among the Top 10.
A number of parasiticides especially in Companion Animals segment, which have been approved over last 2 years are doing the “magic” for these leading companies. Whereas in Food Animals – the only notable new launch / approval has been Bovela Vaccine apart from a few label extensions.
Well this may portend what future has in store – although Food Animals still remains the biggest segment in Animal Health but it may no longer be the “value segment” anymore.
Food Animals segment may remain the weak spot on account of a number of underlying factors increasingly at play in the animal health industry, such as:
Changing consumer preferences for whole foods and “safer foods” with producers and processors insisting on antibiotics free chickens to begin with – this will only strengthen and spread across animal species and regions
More & more active Feed Companies upping the ante in Food Animals segment – better and novel feed supplements and additives means lesser needs for medication exception being vaccines
Disproportionate spending on research in Companion Animals – what with a new breed of AH companies focusing solely on the novel therapies in Companion Animals and lastly
Relatively faster product approvals in Companion Animals compared to Food Animal therapies
Food Animals segment continues to be the dominant segment in the industry so far and will remain so for sure, however, the value has since moved to Companion Animals segment.
With lower investments and higher returns – Companion Animals is increasingly the sweet spot and will witness heightened action in future. The future R &D and Marketing Dollar will increasingly flow to the Companion Animals!