Investment in product demonstrations and bundling application equipment will strengthen growth opportunities, finds Frost & Sullivan’s Visionary Science team
22 June 2017
The North American agricultural biologicals market has witnessed double-digit growth in recent years, driven by several favorable trends. These include the use of technology innovation such as microbial-derived ingredients, seed inoculants, and bundle packaging; desire for environmentally sustainable techniques; new biological product releases; and a decline in synthetic chemical launches. Addressing challenges related to premium pricing, limited product knowledge among growers, and a decrease in available farm acreage can further boost market development.
The industry is expected to grow at a compound annual growth rate (CAGR) of 11.5 percent, to reach $5.08 billion by 2022.
“To increase the adoption and penetration of biological products, manufacturers must tackle efficacy and premium price concerns among price-sensitive farmers,” said Frost & Sullivan Visionary Science Research Analyst Christopher Shanahan. “Investment in product demonstrations will increase product knowledge and value, while bundling application equipment and disease diagnostic services will drive adoption rates.”
The traditional agrochemical market has reached maturity due to primary (government) and secondary (retailer) regulations, emerging consumer preferences, and increasing awareness about environmental sustainability. This has caused key companies like China National Chemical Corp, BASF, and Bayer Crop Science to purchase, merge, or partner with other agricultural biological companies to diversify their product portfolios.
Further trends and developments driving growth in the market include:
“Agrochemical companies can try to offset a decline in demand for traditional chemical fertilizers and pesticides by looking toward non-legume markets such as corn for growth opportunities,” noted Shanahan.
Source: Frost & Sullivan
Illustration Photo: Soybean Research (credits: United Soybean Board / Flickr Attribution 2.0 Generic (CC BY 2.0))