Overview
Poultry and cattle rearing have become an integral part of Bangladesh’s agro-based economy and rural livelihood. However, commercial poultry, cattle and fish farms have been gaining prominence over the last two decades. Owing to this huge demand, commercial feed production experienced almost 25% growth in the last one decade. The increased popularity and low-cost of commercially produced feed have increased the demand for ready mix feed, forcing the exit of smaller, low quality producers having lower economies of scale.
Among poultry, cattle, and fish farms, more than two-thirds of the current commercial feed market consists of poultry feed. In the poultry feed segment, almost 10-15% of feed is consumed by grandparent and parent stock farms, whereas the rest 85-90% is consumed by DOC, and poultry rearing farms, Again broiler feed is four-five times the volume of layer feed. In recent times, another variety of feed ‘’Sonali Feed” used for Sonali chicken is gaining popularity. The estimated combined growth of broiler and layer poultry feed is assumed to be 9% for the next five years.
The cattle feed market remains the most under developed among the three feed sector forward chains. The demand for cattle feed spikes up 3-4 months before Eid-ul-Azha, when most of cow fattening is done by rural cattle merchants.
For milk producing cattle, most farms and dairy farmers mix home-made items with commercial concentrated feed as a means for optimizing costs. However, the annual demand growth for milk is estimated to be around 9-10% per year. According to the per capita meat and milk consumption, there is almost 50% latent demand i.e. per capita annual meat consumption is currently 4 kg against the recommended amount of more than 10kg, and milk consumption is 158ml against the recommended amount of 250ml per head per year by WHO standards. This holds tremendous growth opportunities for these two categories.
The fish feed industry has been mainly concentrated around Mymensingh and Khulna districts, comprising almost 70-80% of fish farms in the country. The fish farms in these regions have slowly begun to realize the role of commercial feed in accelerating growth of brood, and most now prefer ready-mix feed over home-made ones. However, 45-50% of the feed market consists of home-made feed, and potential for the commercial feed market in other zones such as Comilla, Chittagong remain latent.
Market Projection
Current Categories
Bangladesh’s commercial feed industry can be divided into three broad categories. Each of the categories can be divided into two sub categories.
Poultry Feed
2.24 MMT
Broiler: 1.58 MMT
Layer: 0.66 MMT
Cattle Feed
0.50 MMT
Fattening: 0.35 MMT
Milk: 0.15 MMT
Fish Feed
0.82 MMT
Floating: 0.32 MMT
Sinking: 0.50 MMT
Market Share by Category
Poultry Feed (Broiler) currently holds the strongest position in the market with a monumental share of 44 percent. The sub-segment in the second position also belongs to the poultry group; Layer Poultry Feed holds 19 percent of the total market.
Trends and Industry Drivers
- Growth of Livestock Industry: The growth of feed industry largely depends on the growth of the forward linked livestock industry. According to the Department of Livestock Service by the government, Bangladesh was facing a meat deficit, but the industry experienced growth and successfully met the rising demand in the following year. This exhibits the future growth of forward market of feed industry.
- Increasing Number of Restaurants in Urban and Peri Urban Areas: Food business has gained popularity in the country for the last few years. Many restaurants were established throughout the country, especially in the urban areas. Since restaurant businesses take up a significant portion of the livestock and poultry industry, the growth of restaurant industry will secondarily help the feed industry to scale up in future.
- Growth of Frozen Food Market: Busy lifestyle in the urban areas and increasing participation of women in the workforce have contributed to the growth of processed and convenience foods industry. Since this industry is linked to livestock industry and lies at the forward position in the value chain, the growth of this industry leverages the industries supporting it.
Growth Forecast
Despite being the largest segment, Broiler Feed is expected to grow the least among all the segments. However, growth of Cattle Feed segment is expected to be the largest among the categories. Fattening Cattle Feed, which is currently the smallest sub-segment, is expected to grow the most at a rate of 15.5 percent. Milk Cattle Feed, which is another sub-segment of the Cattle Feed category is expected to grow at a rate of 11.5 percent.
Competitive Landscape
Top Players
Although the market has a number of large and medium sized players, it is largely dominated by the independent home made producers. Apart from the independent producers, there are a few major players. The list includes Nourish, Paragon, ACI Godrej, Kazi Farms among others. These major players have vertically integrated operations in order to get the advantage of economies of scale.
Market Share by Players
The independent producers take up a large portion of the market with a market share of 41.3 percent. Among the major players, Nourish is leading the market having a share of 13.6 percent. Other players like Quality, Paragon, Aftab, CP hold significant market share and are not very far from each other.
