REPORT SCOPE
INTRODUCTION
STUDY GOAL AND OBJECTIVE
As all world markets have become less insular and subject to increasing international competition and opportunities, the need for international information is also increasing. Many markets undergo important changes as the marketing environment and political framework conditions change.
This may apply increasingly for the food market, but it applies especially for the animal feed market and the respective ingredient markets. With the world split up in major consumer markets such as the European Union (EU), the NAFTA, and the Asiatic markets, the market for food and feed ingredients is becoming complex, international, and competitive. It is more and more essential for food and feed ingredient suppliers to maintain an up-to-date view of the market. In the case of vitamins, this is true not only the food and feed markets, but also in pharmaceutical and cosmetic applications that are becoming important outlets for vitamins.
The present study is an update of the report GA-096, The Global Market for Vitamins in Food, Feed, Pharma, and Cosmetics, 1996. This update has become necessary because of the following recent developments:
- In 1997, the Asian economy was facing a severe recession with strong implications for the food market -- especially the feed market.
- In 1997/1998, the Russian economy more or less collapsed; the economic development in several other Eastern European countries also came to a standstill.
- Food and especially meat consumption in Europe has come to a point of saturation and is decreasing.
- Several new Chinese factories are offering vitamins at low prices never seen before.
- New market entries of companies not previously active in the vitamin took place.
- The traditional vitamin producers Roche, Rhone Poulenc, and BASF have been fined in the U.S. for price conspiracy of vitamins.
As a consequence, in the main outlet for vitamins, the feed sector, consumption of vitamins decreased, and prices, especially for oil-soluble vitamins, have reached an unprecedented low level and are still decreasing almost daily. In food, price decreases have also taken place; however, due to new developments, especially in the drink sector, consumption of some vitamins is going up. This trend at least partially compensates for the decreasing product value. In pharma and cosmetics, vitamin consumption is increasing, but as these sectors are relatively small outlets, such positive developments do not change the overall picture of a strongly decreasing market. Despite such developments, it is not only the Chinese, which are offering increasing quantities of vitamins. Established producers are also expanding their capacities, and other chemical companies in the U.S. and Europe are entering the vitamin . Thus, a price war and fight for market shares is going on in all sectors, accelerating the downward price trend. In May 1999, the U.S. court of Justice fined the major producers, Roche, BASF, and Rhone Poulenc for price conspiracy in the U.S. markets. All major customers of these companies are now using that verdict to get even lower-than-standard prices and ask for special discounts. For most of the vitamin producing companies, this development is becoming dangerous -- even for the established ones; profit margins are becoming small or to negative. This applies especially for vitamins A, E, and C.
It is, however, not only the markets for vitamins that are changing. The production systems -- the producers and the regions where vitamins are produced -- are also changing rapidly. Nowadays, the technology for vitamin production is no longer a secret housed by a few select companies. The technology abounds worldwide, and a profound chemical know-how base and sufficient funds are enough to start up production. Traditional producers try to keep their competitive edge by focusing on process optimization and the development of new, more sophisticated formulations.
Vitamins have become commodities that are sold, more or less, on price only. Research on new applications is rare, and vitamin producers are licensing an increasing number of staff. Research on completely new production technology is no longer a priority. Still, most of the vitamins are produced by chemical synthesis, the exceptions of which are B2, B12, and to some extent biotin.
REASON FOR THE STUDY
This report reviews the global markets for all vitamins and vitamin like compounds:
- Vitamin A
- Vitamin D
- Vitamin E
- Vitamin K1, K3
- Vitamin B1
- Vitamin B2
- Vitamin B6
- Vitamin B12
- Biotin
- Folic Acid
- Pantothenic Acid and Panthenol
- Nicotinates
- Cholin Chloride
- L-Carnitine
Vitamins are used in four applications:
- food fortification,
- feed supplementation, and
- pharmaceuticals and over-the-counter (OTC) formulations, as well as in cosmetic products.
This report reviews these markets and indicates the further development of vitamins in each of these sectors. It shows the development of quantities and prices for each vitamin, identifies formulation trends, and extrapolates the future development of the market of each vitamin.
Since the feed market is of outstanding importance for the global vitamin , some special focus is given to the global trends in the animal feed area. Biotechnology did not, up to now, make the expected inroads in production technology. Biotechnology has, however, become standard for B2 and B12.
The Company Profiles section characterizes the most important players of the vitamin , indicates their market shares and position, and lines out their strategies to counterbalance current developments.
CONTRIBUTION OF THE STUDY
BCC, Inc. seeks to provide insight into an industry that is, in general, at the forefront of technology, but is facing an unusual development -- the degradation of their fine chemicals to commodities. The report is intended to assist companies and players in the food, feed, cosmetics, and pharmaceutical industry by providing them with a comprehensive overview of the vitamin industry. Strategy and planning may become easier and more reliable. The report may also help companies and players active in other ingredient markets in their considerations for diversification into attractive and well-fitting sectors, one of which may be vitamins. However, it also points out the loopholes of market entries, as there are many of them now.
SCOPE AND FORMAT
After a review of the ingredient market and its environment, each type of vitamin is discussed in relation to its application. The rationale of using a specific type of vitamin is shown first, followed by price and margin discussions, and estimates of the current use and future developments to the year 2005. Special attention is given to specific formulations and typical data sheets for commercial products are shown. A short section shows the state-of-the-art of biotechnology for the production of vitamins. The Company Profiles section details the development of market shares for individual players and describes how they are trying to react to the currently fast-changing environment.
METHODOLOGY
The methodology that is applied in this report is based on:
- analysis of the markets for which vitamins are used. Structure and trends in these markets are identified. For each relevant market, developments are discussed and shown;
- for each of the so defined application fields, the most important vitamins are identified, and volumes and value are estimated; and
- price trends and estimates of production margins complete the picture.
INFORMATION SOURCES
In previous times, the sources of information have been limited, as there have been only a few players controlling the . Due to the developments in the market, many journals now report on vitamins. However it is basically the direct contact with the producing industry, traders, and the application industry that yields the most reliable information and guarantees the high quality of this report.
