The animal feed industry is facing change, with producers and growers looking for nutrition that will get the best out of livestock, while meeting the challenges of feeding a growing global population. In a move to address these needs, British compound feed specialist ABN has announced its intention to construct a new 1-million-tonne mill in the east of England, the first large-scale investment in the industry in more than 30 years.
The investment aims to provide a sustainable solution for an industry currently close to capacity, as it tries to keep pace with the rising demand for compound animal feed. World Grain asked Danny Johnson, commercial director at ABN, to explain how the company sees the livestock sector’s needs developing and what the industry needs from nutrition specialists.
Johnson explained that the company is a leading player in the UK compound feed industry, and currently operates 11 mills around the country.
“We have a large share of the compound feed supply into the poultry, pig and layer industries,” he said, adding that the business also manufactures game feed under the Sportsman brand.
“Our focus is much more than providing a commodity product to our customers,” he said. “We are all about providing high-quality nutrition that is going to maximize the potential of the genetics of that animal whether it is a pig, a chicken or a laying bird.”
Johnson stressed the importance of the company’s partnerships with its key customers, with a continuous active dialogue.
“We are adding to the nutritional debate to make sure that, whether they have their own nutrition teams or buy in our own-branded feed, the nutrition that goes into that animal is right for them,” he said.
“Our customers are changing,” he said, stating that in the past the company dealt mostly directly with farmers, buying feed on a short-term basis. “It has massively changed now. There has been huge consolidation in the industry supply chains and we spend more time than ever working in partnership with processors.”
There is still good interaction, particularly with larger farms but the change in focus is notable.
“Another significant change is that the industry is now more data driven, so if we are talking about performance and about finding the right nutrition, we need to understand what that performance is,” he said. “The discussion becomes about understanding what the performance is, what the inputs are into the animals, so we can take that information back and then develop the nutrition and rations to continue to improve that performance.”
Johnson also explained that consumer attitudes are changing. Consumers are getting much more information, often to the point of overload from social media. That includes an element of disinformation.
“Consumers are putting pressure on retailers in terms of what they see as the right welfare, and what they see as being the right focus in terms of long-term sustainability,” he said. “That is coming through to both ourselves as animal feed manufacturers and the processors.”
The need to produce a pig or a bird that fits consumers’ criteria is changing the industry.
“That pressure and that focus is only going to increase,” he said. “The level of information demanded by consumers into what they’re eating is not going to go away.”
One example is concern over the role of soy production in deforestation. As part of the AB Agri Group, AB Agri representatives have played an active role in developing the European Compound Feed Manufacturers Federation (FEFAC) benchmarking system, which endorses and monitors sustainable production of soy.
All the certification schemes that ABN uses specify zero deforestation. This means the soy has not been grown in areas that have been converted from forest or other valuable native habitats since the agreed cut-off dates.
In addition to this commitment, very much aligned with the UN’s Sustainability Goals, ABN is undertaking significant research into potential alternative proteins, and indeed this extends to the new super mill investment.
“We are working with our partners to understand future requirements,” he said. “The new mill will, for example, need a flexible system of raw material bins to take account of the use of more raw materials to meet different needs.”
Johnson described the new mill as “an example of our commitment to the industry. Our responsibility is to invest behind the growth of the animal feed sector in the UK, and to confirm our position as a business here for the long term. Our customers are also here for the long term, too, themselves predicting increasing demand and we are going to be part of supplying this growth.”
The new mill, with annual production capacity of 1 million tonnes, will add significant volume.
“What we want to build is something that moves the industry on and continually improves standards for our customers, their customers, the retailers and consumers,” he said.
Asked about the impact of the COVID-19 pandemic on the industry, he explained that it varied, according to the market.
“For anyone who was involved with, or reliant on, the wholesale market, foodservice, restaurants, hotels, the challenges can’t be underestimated,” he said. “April of last year was incredibly difficult. The market closed overnight, and chickens and eggs had to move supply chains.
“Birds still needed to get processed. They were in the wrong supply chains, and they needed to get into the right package sizes to get onto retail shelves. The industry came together. It was a lot about people having the right conversations, to make those changes to ensure welfare standards were maintained, and that we got the product onto the shelves.”
In terms of the wholesale sector, it has been a tough year, although slowly it has started to open back up again.
“The poultry market was growing steadily 3% year-on-year before COVID-19,” he said. “It has definitely taken a hit in the last 12 months or so, but there is cautious optimism that as lockdown restrictions continue to relax it can return back to a place where it will grow at a similar rate once again.”
With foodservice and restaurants reopening, labor shortages have now become a pressing issue. The problem is in part linked to Brexit, the UK’s exit from the European Union, which prompted many staff from the EU to return to their native homelands, leaving gaps in available recruits. Shortages of truck drivers recently have been in the headlines, but also staff for the processing sector and even restaurants — in fact, the whole supply chain — are reporting challenges.
The transport issue is not just about the availability of drivers. Pre-Brexit, EU drivers would often take backloads, or move goods within the UK. However, the dynamics of trading are changing that landscape and they are affecting the logistic demands of many companies.
“Overall, we do need more drivers but a driver needs training and needs to have the right experience so that is not something that you can immediately turn on,” Johnson said. “There will realistically be a lag in terms of that resolving itself.”
Otherwise, the industry had been well prepared for the changes brought by Brexit, Johnson said.
“At ABN we planned and managed our imported stocks well,” he said. “Brexit has not stopped us from trading.”
Investing in talent
These post-Brexit labor concerns also correlate closely with ABN’s commitment to investment in talent within the wider UK agricultural and food sector, with a particular focus on diversity.
“ABN is very much a business that is focused on supporting the UK animal protein industry,” he said. “This is a role we take very seriously. We are very active in making sure that we support the next generation of talent, whether that be farmers or attracting people into the wider agricultural industry. We are a business that wants to make sure we promote the right legacy in the industry that we are operating in.”
For industry, the challenge is perhaps more focused on the attraction and retention of talent from different backgrounds and cultures.
“While local knowledge will always be key, our reach and influences are much bigger,” he said. “In ABN, we have a range of initiatives to try and bring new people into the business. Whether it be an entry-level position within our customer support team, our graduate and placement schemes, or apprenticeships within our mills, our focus remains on creating an exciting environment to work in and a springboard for the development of a successful career.
“That is the journey that we have been on for a while, in both our investments in our mills and with our people. It is being realistic and challenging yourself to say what is needed for tomorrow and how can we deliver it? That is the process that we’re going through.”