Introduction
The global probiotics market is highly competitive with key industry players adopting various strategies, such as product launch and expansions to strengthen their market positions. Most companies in the market are focused on expanding operations across regions, augmenting their capabilities, and building strong partner relations.
The growth of market players is dependent on market conditions, government support, and industry development. Thus, vendors should focus on expanding geographically and improving product quality. Chr. Hansen, DuPont (Danisco), Lallemand, Probi, Novozymes, Kerry Group, Sabinsa, Greentech, Biosearch Life, UAS Laboratories, Probiotical, Roelmi, and Synbiotech are the major companies in the market, who compete based on market presence, quality, and price.
Key players are taking steps for business expansions and entering into untapped markets, increasing their consumer bases. The international players may strengthen their presence worldwide through acquisitions during the forecast period. It has also been forecast that improvements in the global economic scenario and the growing probiotics products industry in emerging nations are fueling market growth, making it an ideal time for players to launch new products and increase their global market shares.
Michael Porter’s Five Forces model offers a framework to study the global probiotics market. Strategic business managers, trying to gain an edge over competing firms in the global probiotics market, can utilize this model to better comprehend the industry in which the company operates. The components of each of the forces and the degree of impact of each element in the context of the global probiotics market have been broken down and analyzed.
Threat Of New Entrants
The global probiotics market is highly lucrative due to the widening application scope of probiotics in various industries. Rising consumer preferences towards functional food & beverages targeted at gut health and immunity are fueling the demand for probiotics in the food & beverages industry. However, the initial investment and working capital required to efficiently operate a probiotics formulation facility are high as it requires a continuous supply of electricity, proper disposal of waste, maintenance of the sterile indoor environment, and continuous culturing of microbial strains.
Hence, the threat of new entrants in the global probiotics market is expected to be moderate.
Bargaining Power Of Suppliers
Major suppliers in the global probiotics market are cell banks and chemical suppliers that provide probiotic microbial strains and chemicals required to prepare the growth cultures. Majority of the market players procure their microbial strains from their in-house labs rather than procuring it from other vendors, i.e., cell banks. Moreover, there are numerous chemical suppliers present in the industry that provide chemicals to the market players. Thus, the market players have a higher advantage over their suppliers in the global probiotics market.
Hence, the bargaining power of suppliers in the global probiotics market is expected to be low.
Bargaining Power Of Buyers
Buyers in the global probiotics market are the manufacturers and processors active in industries such as food & beverages, pharmaceuticals, dietary supplements, personal care, and animal feed. The demand for probiotic formulations in the application industries is higher than the actual supply. A majority of the market players formulate and provide both probiotic formulations and end-consumer products such as probiotic drinks, tablets, dietary supplements, and others. Thus, fulfilling the ingredient-level and retail demand for probiotics in the global market, and lowering their dependency on the buyers.
Hence, the bargaining power of buyers in the global probiotics market is expected to be low.
Threat Of Substitutes
Probiotics is an umbrella term used for beneficial microbes such as bacteria and yeast that promote the growth of gut microflora and help in improving gut health and overall immunity in humans and animals. There is no direct substitute for probiotic ingredients; however, internal substitutes are available in the market. The internal substitutes refer to the alternative microbial strains that can be used as probiotics. Different manufacturers use different probiotic strains in their products as the gut microflora is rich with different beneficial microbes. Thus, there is no direct substitution for probiotic ingredients, but internal substitution is available in the market.
Hence, the threat of substitutes in the global probiotics market is expected to be moderate.
Intensity Of Rivalry
The global probiotics market is fragmented in nature and is a perfect competition market owing to the presence of several established market players and customers. Market players are investing heavily in their R&D activities to introduce innovative probiotic strains with advanced functional applications. Additionally, to gain a higher competitive edge in the market, several market players are expanding their customer base by offering probiotic ingredients in the B2B market and end consumer probiotic products in the retail market.
Hence, the intensity of rivalry in the global probiotics market is expected to be high.
