Animal Health Market Analysis

Animal Health Market Deep Dive – PESTLE, Porter, SWOT

The animal health industry is expected to be transformed by the growing pet population and the rising awareness of animal health. The demand for new drugs, vaccines and food is increasing. The livestock sector is subject to greater scrutiny of disease prevention and food safety, which is driving investments in preventive health care. Telemedicine and the development of health-monitoring devices are reshaping the industry and enabling more efficient and effective animal care. The industry is facing both challenges and opportunities in this dynamic environment.

PESTLE Analysis

• Political:
  The animal health market will be largely influenced by the regulatory frameworks designed to protect animal welfare and food safety in 2024. The European Union has adopted the Animal Health Law, which requires member states to allocate at least 0.5% of their agricultural budgets to animal health. This equates to an annual budget of about € 1.4 billion in the European Union, thereby promoting the investment in animal health products and services. The United States has increased its budget for veterinary services by 10%, to $50 million, to increase disease prevention and control measures in livestock.
• Economic:
  The factors that will affect the market for animal health in 2024 are the growth of disposable income and the rising expenditure on pet care. In the United States, pet owners will spend on average $1,500 per year on veterinary care, which is a 5% increase compared to the previous year. In addition, the turnover of the global livestock sector is expected to reach $1.2 trillion, which will stimulate the demand for veterinary drugs and vaccines. The trend towards urbanization will continue, and 55% of the population will live in cities by 2050. This will lead to an increase in pet ownership and related expenditures.
• Social:
  In 2024 the social trends are showing an increasing concern for animal health and welfare among consumers. Surveys show that more than 70 per cent of pet owners regard their animals as family members, which has led to a greater demand for premium veterinary services and products. In addition, the trend towards humanizing pets has seen a 20 per cent rise in the purchase of specialised pet foods and health supplements. In addition, tele-veterinary services are becoming increasingly popular among pet owners, with 30 per cent of them reporting they have used tele-veterinary services in the last year.
• Technological:
  In 2024, the development of technology plays a major role in the animal health market. The sale of digital health products for pets is growing. Wearables for pets are expected to reach 15 million units worldwide in 2024. These devices provide veterinarians with real-time health monitoring and data analysis, enabling them to offer a bespoke service. Artificial intelligence is also being used in diagnosis. By the end of the year, 25 per cent of veterinary practices will use it to help them diagnose animal diseases.
• Legal:
  Legal factors affecting the animal health market in 2024 are the strict regulations relating to veterinary medicines and animal testing. The FDA has introduced new guidelines for the registration of veterinary medicines, which can take up to 18 months and cost an average of $ 2 million per drug. The EMA has also introduced regulations requiring transparency in the use of antibiotics in livestock, which require farmers to report their use of antibiotics, with fines up to 100,000.
• Environmental:
  In 2024, considerations of the environment are increasingly shaping the animal health market, especially in relation to sustainable animal husbandry. The livestock sector is responsible for approximately 30% of global greenhouse gas emissions, and this is leading to a shift towards more sustainable animal health solutions. It is estimated that the sales of organic and sustainable veterinary medicines will rise by 25 % over the next five years. The governments are supporting the efforts to reduce the carbon footprint of animal husbandry and are earmarking $200 million for research into sustainable animal health.

Porters Five Forces

• Threat of New Entrants:
  The threat of new entrants to the animal health market in 2024 is moderate. There are many opportunities in this market, but the high regulatory barriers and the need for substantial R & D investment pose a challenge to new companies. The strong brand loyalty and the distribution network of the established companies make it difficult for new entrants to easily gain market share.
• Bargaining Power of Suppliers:
  Suppliers in the Animal Health market have relatively low bargaining power. This is mainly because there are a large number of suppliers supplying raw materials and components, which reduces their influence. In addition, many companies are able to change their suppliers without incurring major costs, which further reduces the suppliers’ power.
• Bargaining Power of Buyers:
  BUYER POWER IN THE ANIMAL HEALTH MARKET : VERY STRONG DUE TO THE AVAILABILITY OF MANY PRODUCTS AND SERVICES. Veterinarians and pet owners can easily compare and change brands, which increases the competition between suppliers. This situation forces companies to be innovative and offer competitive prices to retain customers.
• Threat of Substitutes:
  The threat of substitutes in the animal health market is moderate. There are alternative remedies and preventive measures, such as homeopathy and natural medicine, but they often lack the scientific support and official approval of the conventional ones. However, if consumer preferences turn towards natural and alternative solutions, this threat could increase.
• Competitive Rivalry:
  Competition is high in the Animal Health Market. There are many established companies competing for market share. Companies are constantly developing new products to set themselves apart. The presence of both large multi-national corporations and small niche companies intensifies competition, leading to aggressive marketing and price wars.

SWOT Analysis

• Strengths:
  • Growing awareness of animal health and welfare among pet owners and livestock producers.
  • Advancements in veterinary medicine and technology leading to improved diagnostics and treatments.
  • Strong regulatory frameworks ensuring product safety and efficacy in the animal health sector.
• Weaknesses:
  • High costs associated with research and development of new veterinary products.
  • Limited access to veterinary care in rural and underserved areas.
  • Dependency on a few key players in the market, leading to potential supply chain vulnerabilities.
• Opportunities:
  • Increasing demand for organic and natural animal health products.
  • Expansion of telemedicine and digital health solutions in veterinary care.
  • Rising global pet ownership trends driving growth in the companion animal segment.
• Threats:
  • Emerging zoonotic diseases posing risks to both animal and human health.
  • Intense competition leading to price wars and reduced profit margins.
  • Regulatory changes that could impact product approvals and market access.

The Animal Health Market in 2024 will be characterized by significant strengths such as a rise in animal welfare consciousness and advances in veterinary technology. In spite of these strengths, the market is also characterized by weaknesses such as high R & D costs and limited access to veterinary care in some regions. Opportunities abound in the form of a rise in demand for natural products and the integration of digital solutions. Threats to the market come in the form of zoonotic diseases and regulatory changes. The key to navigating this shifting landscape will be a strategic focus on innovation and market expansion.