United States - Pet Healthcare

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Executive Summary

Executive Summary
Market value
The United States pet healthcare market grew by 2.4% in 2018 to reach a value of $10,588.1 million.

Market value forecast

In 2023, the United States pet healthcare market is forecast to have a value of $12,146.2 million, an
increase of 14.7% since 2018.

Market volume
The United States pet healthcare market grew by 0.9% in 2018 to reach a volume of 1,134.7 million units.

Market volume forecast

In 2023, the United States pet healthcare market is forecast to have a volume of 1,192.7 million units, an
increase of 5.1% since 2018.

Category segmentation
Grooming products is the largest segment of the pet healthcare market in the United States, accounting for
24.6% of the market's total value.

Geography segmentation
The United States accounts for 51.3% of the global pet healthcare market value.

Market share
Zoetis Inc. is the leading player in the United States pet healthcare market, generating a 12.6% share of the
market's value.

Market rivalry
The pet healthcare market is dominated by large, powerful incumbents, which increases the rivalry level
significantly.

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Market Overview

Market Overview
Market definition
The pet healthcare market consists of retail sale of pet supplements, worming treatments, external parasite
treatments, grooming products and other pet healthcare. The market is valued according to retail selling
price (RSP) and includes any applicable taxes. All currency conversions used in the creation of this report
have been calculated using constant annual average 2018 exchange rates.

For the purposes of this report, the global market consists of North America, South America, Europe, Asia-
Pacific, Middle East, Ghana, Morocco, Nigeria, and South Africa.
North America consists of Canada, Mexico, and the United States.
South America consists of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Panama, Peru, Puerto
Rico, and Uruguay.
Europe consists of Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, the Netherlands, Norway, Poland,
Portugal, Romania, Russia, Slovak Republic, Spain, Sweden, Switzerland, Turkey, Ukraine, and the United
Kingdom.
Asia-Pacific consists of Australia, China, Hong Kong, India, Indonesia, Japan, Kazakhstan, Malaysia,
Myanmar, New Zealand, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand,
Turkmenistan, and Vietnam.
Middle East comprises Bahrain, Egypt, Iran, Israel, Kuwait, Oman, Saudi Arabia, and the United Arab
Emirates.

Market analysis
The US pet healthcare market experienced moderate growth during the review period (2014-2018). The
growth of the market is expected to accelerate over the forecast period (2018-2023).
Positive economic conditions and increasing employment rate in the country are the factors supporting the
market growth. Furthermore, increasing purchasing power encouraged consumer confidence to spend
more on premium pet healthcare products. Additionally, according to the National Pet Owner Survey (2019-
2020) conducted by American Pet Products Association, 67% of the U.S. households own a pet. Thus,
increasing pet ownership trend is driving the demand for pet healthcare products.
The US pet healthcare market had total revenues of $10.5bn in 2018, representing a compound annual
growth rate (CAGR) of 1.7% between 2014 and 2018. In comparison, the European and Asia-Pacific
markets grew with CAGRs of 3.3% and 5.2% respectively, over the same period, to reach respective values
of $5,253.3m and $3,245.9m in 2018.
Market consumption volume increased with a CAGR of 0.7% between 2014 and 2018, to reach a total of
1,134.7 million units in 2018. The market's volume is expected to rise to 1,192.7 million units by the end of
2023, representing a CAGR of 1% for the 2018-2023 period.
Grooming products sales accounted for the highest value in the US pet healthcare market in 2018, with
total sales of $2,601.0m, equivalent to 24.6% of the market's overall value. In comparison, sales of external
parasite treatments reached a value of $2,427.9m in 2018, equating to 22.9% of the total market value.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 2.8% for the five-year
period 2018 - 2023, which is expected to drive the market to a value of $12.1bn by the end of 2023.

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Comparatively, the European and Asia-Pacific markets will grow with CAGRs of 3.6% and 5.1%
respectively, over the same period, to reach respective values of $6,266.5m and $4,156.4m in 2023.

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Market Data

Market Data
Market Value
The United States pet healthcare market grew by 2.4% in 2018 to reach a value of $10,588.1 million.

The compound annual growth rate of the market in the period 2014-18 was 1.7%.

Table 1: United States pet healthcare market value: $ million, 2014–18

Year $ million € million % Growth

2014 9,900.5 8,383.1
2015 10,021.6 8,485.6 1.2%
2016 10,209.2 8,644.4 1.9%
2017 10,338.6 8,754.0 1.3%
2018 10,588.1 8,965.3 2.4%
CAGR: 2014–18 1.7%

Source: MARKETLINE

Figure 1: United States pet healthcare market value: $ million, 2014–18

Source: MARKETLINE

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Market Volume
The United States pet healthcare market grew by 0.9% in 2018 to reach a volume of 1,134.7 million units.

The compound annual growth rate of the market in the period 2014-18 was 0.7%.

Table 2: United States pet healthcare market volume: million units, 2014–18

Year million units % Growth

2014 1,104.9
2015 1,112.1 0.6%
2016 1,121.5 0.8%
2017 1,125.0 0.3%
2018 1,134.7 0.9%
CAGR: 2014–18 0.7%

Source: MARKETLINE

Figure 2: United States pet healthcare market volume: million units, 2014–18

Source: MARKETLINE

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Market Segmentation

Market Segmentation
Category Segmentation
Grooming products is the largest segment of the pet healthcare market in the United States, accounting for
24.6% of the market's total value.

The External parasite treatments segment accounts for a further 22.9% of the market.

Table 3: United States pet healthcare market category segmentation: $ million, 2018

Category 2018 %
Grooming Products 2,601.0 24.6
External Parasite Treatments 2,427.9 22.9
Pet Supplements 2,302.8 21.7
Worming treatments 1,790.5 16.9
Other Pet healthcare 1,466.0 13.8
Total 10,588.2 100%

Source: MARKETLINE

Figure 3: United States pet healthcare market category segmentation: % share, by value, 2018

Source: MARKETLINE

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Geography Segmentation
The United States accounts for 51.3% of the global pet healthcare market value.

The Europe accounts for a further 25.3% of the global market.

Table 4: United States pet healthcare market geography segmentation: $ million, 2018

Geography 2018 %
United States 10,588.1 51.3
Europe 5,225.9 25.3
Asia-Pacific 3,253.1 15.8
Rest of the World 1,568.4 7.6
Total 20,635.5 100%

Source: MARKETLINE

Figure 4: United States pet healthcare market geography segmentation: % share, by value, 2018

Source: MARKETLINE

Market Distribution
Other Specialist Retailers form the leading distribution channel in the United States pet healthcare market,
accounting for a 73.7% share of the total market's value.

Hypermarkets & Supermarkets accounts for a further 25.2% of the market.

Table 5: United States pet healthcare market distribution: % share, by value, 2018

Channel % Share
Other Specialist Retailers 73.7%

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Channel % Share
Hypermarkets & Supermarkets 25.2%
Convenience Stores 0.7%
Cash & Carries & Warehouse Clubs 0.4%
Total 100%

Source: MARKETLINE

Figure 5: United States pet healthcare market distribution: % share, by value, 2018

Source: MARKETLINE

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Market Outlook

Market Outlook
Market Value Forecast
In 2023, the United States pet healthcare market is forecast to have a value of $12,146.2 million, an
increase of 14.7% since 2018.

The compound annual growth rate of the market in the period 2018-23 is predicted to be 2.8%.

Table 6: United States pet healthcare market value forecast: $ million, 2018–23

Year $ million € million % Growth

2018 10,588.1 8,965.3 2.4%
2019 10,897.1 9,226.9 2.9%
2020 11,207.8 9,490.0 2.9%
2021 11,530.2 9,763.0 2.9%
2022 11,872.4 10,052.7 3.0%
2023 12,146.2 10,284.6 2.3%
CAGR: 2018–23 2.8%

Source: MARKETLINE

Figure 6: United States pet healthcare market value forecast: $ million, 2018–23

Source: MARKETLINE

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Market Volume Forecast
In 2023, the United States pet healthcare market is forecast to have a volume of 1,192.7 million units, an
increase of 5.1% since 2018.

The compound annual growth rate of the market in the period 2018-23 is predicted to be 1%.

Table 7: United States pet healthcare market volume forecast: million units, 2018–23

Year million units % Growth

2018 1,134.7 0.9%
2019 1,145.8 1.0%
2020 1,157.0 1.0%
2021 1,169.5 1.1%
2022 1,184.4 1.3%
2023 1,192.7 0.7%
CAGR: 2018–23 1.0%

Source: MARKETLINE

Figure 7: United States pet healthcare market volume forecast: million units, 2018–23

Source: MARKETLINE

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Five Forces Analysis

Five Forces Analysis

The pet healthcare market will be analyzed taking manufacturers of pet healthcare as players. The key
buyers will be taken as distributors and retailers of pet healthcare, and producers of packaging, chemicals
and other raw materials as the key suppliers.

Summary

Figure 8: Forces driving competition in the pet healthcare market in the United States, 2018

Source: MARKETLINE

The pet healthcare market is dominated by large, powerful incumbents, which increases the rivalry level
significantly.
Major buyers in this market usually offer a wide range of different products, which reduces their
dependence on the pet healthcare market. On top of this, switching costs for buyers are not especially high.
Pet healthcare market suppliers include those providing and manufacturing raw materials, such as plastic,
chemicals and packaging materials for the production of pet healthcare products. The quality of many of the
raw materials is important. Chemicals and equipment used in the manufacturing of such products must be
up to certain standards, and for some ingredients there are no substitutes; this increases supplier power.
This market is heavily dominated by strong brands that hold significant market share. Trying to enter this
market with a new brand in the face of such formidable incumbents can be extremely challenging. New
entrants face large companies whose economies of scale allow them to compete fiercely on price.
Differentiation in this market is relatively limited, although innovation in terms of packaging, branding, and
products are a distinct way in which the large incumbents in this market fight for market share.
The threat of substitutes is assessed as moderate in this market due to there being no real beneficial or
viable substitutes of these products available.

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Buyer Power

Figure 9: Drivers of buyer power in the pet healthcare market in the United States, 2018

Source: MARKETLINE

The main distribution channels for the US pet healthcare market are other specialist retailers with 73.7% of
the total market share in 2018. Hypermarkets and supermarkets are also significant; they accounted for
25.2% of the total market value in 2018. The major buyers have considerable bulk-purchasing power and
are in a position where they can negotiate favorable volumes and values from suppliers. The same applies
to the contracts that suppliers, especially the smaller ones, are ready to get into as this form of sale
provides a reliable and steady flow of income. This enhances buyer power significantly.
Shopping for pet products has become easier, with an increasing variety of retail outlets now selling pet
products. The customer’s loyalty to manufacturer brands plays a significant role and tends to weaken the
buyer power of retailers. However, the fact that buyers offer a wide range of products, and the pet
healthcare segment constitutes only part of their business, means buyer power is strengthened.
Overall, buyer power is assessed as strong.

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Supplier Power

Figure 10: Drivers of supplier power in the pet healthcare market in the United States, 2018

Source: MARKETLINE

Pet healthcare market suppliers include those providing and manufacturing raw materials, such as plastic,
chemicals and packaging materials. It is important for players to focus on the quality of the raw materials
they are using and follow government regulations relating to veterinary medicines. In the US, the US
Department of Agriculture: Animal and Plant Health Inspection Service (USDA/APHIS) monitors the market.
The Food and Drug Administration (FDA) also regulates veterinary medicines.
The pet healthcare market is filled with innovative products that allow animal owners to meet the basic
needs of their pets. The market develops specialized products based on changing consumer needs. This
tendency can be observed in relation to food products as well as pet healthcare products. Producers are
choosing to adapt their products to cover different ages, breeds and sizes, which each require specific
products from suppliers, strengthening supplier power.
Companies offering raw materials are generally small; therefore, supplier power is reduced based on size.
However, pet healthcare products constitute a relatively small part of the total market, which strengthens
supplier power. Overall, supplier power is assessed as moderate.

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New Entrants

Figure 11: Factors influencing the likelihood of new entrants in the pet healthcare market in the
United States, 2018

Source: MARKETLINE

The main players in the US pet healthcare market are large international companies, such as Zoetis Inc.,
Bayer Ag and Neogen Corporation. These players sell products on a global scale, and invest heavily in
both product innovation and building wide brand portfolios. Because of this, new entrants face formidable
competition. They also offer a wide range of different products, which means that pet healthcare goods only
constitute a small segment of their total offering.
The growing domestic market is also attractive to start-ups such as, Torigen Pharmaceuticals, Inc., a
pharmaceuticals company based in Farmington, Connecticut offers veterinary cancer treatment. Therefore,
these companies have the opportunity of introducing the high level product or fill in the market niche.
The US pet healthcare market is regulated by FDA laws, which state that pet medicines must be safe,
produced under sanitary conditions, contain no harmful substances and accurately labeled, which can act
as a barrier to entry.
The establishment of production facilities is a key requirement of market entry, which means significant
capital outlay on machinery, factories and laboratories. Furthermore, potential new entrants will need to
persuade stores to stock their products, which may be difficult to do if customers are loyal to high quality,
well tested brands.
Moderate market growth during the review period (2014-2018) makes the market attractive to potential new
entrants. Overall, there is a moderate likelihood of new entrants.

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Threat of substitutes

Figure 12: Factors influencing the threat of substitutes in the pet healthcare market in the United
States, 2018

Source: MARKETLINE

Substitutes for pet healthcare products include homemade pet supplements and grooming products. It is
relatively time-consuming to prepare substitutes at home, as it requires specific knowledge. This issue can
decrease the use of homemade alternatives to some extent, limiting the use of substitutes. Overall, the
threat of substitutes is assessed as moderate.

Degree of rivalry

Figure 13: Drivers of degree of rivalry in the pet healthcare market in the United States, 2018

Source: MARKETLINE

The US pet healthcare market is fragmented, with four major manufacturers, Zoetis Inc., Bayer Ag, Neogen
Corporation and Eli Lilly and Company, accounting for 30.0% of the total market value in 2018. As most
players own their own production facilities, fixed costs are relatively high. This means that a successful

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presence in the market requires significant capital outlay to finance fixed assets, which enhances rivalry
between the industry's players. Costs are also increased by the need to finance expensive innovations, as
customers expect constant improvements in terms of product quality and variety.
Switching costs may not be high, but retailers are usually unwilling to switch between market players, as
their customers are loyal to particular brands. This eases rivalry to a certain extent. Furthermore, the
diverse product ranges produced by the leading market players reduces their reliance on the pet healthcare
market. In the US, there has been a trend towards consumers purchasing products that are marketed as
healthy or beneficial to pets. Upscale pet services, such as dog day care, grooming, and dog walking, have
also grown well.
Moderate market growth decreases the degree of rivalry to some extent. Overall, rivalry is assessed as
moderate.

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Competitive Landscape

Competitive Landscape
Summary_Text
The US pet healthcare market has experienced moderate value growth and weak volume growth in recent
years. Zoetis Inc is the leading player in the sector in value terms and also gained maximum value share
during 2014-2018. Furthermore, Bayer Ag and Neogen Corporation also have strong presence in the
country, accounting for second and third largest value shares respectively, in 2018. Between 2014 and
2018 there were 15 deals recorded in MarketLine’s financial deals database linked to the pet healthcare
sector in the US worth a total of $407m dollars

Market Share
Zoetis Inc. is the leading player in the United States pet healthcare market, generating a 12.6% share of the
market's value.

Bayer Ag accounts for a further 8% of the market.

Table 8: United States pet healthcare market share: % share, by value, 2018

Company % Share
Zoetis Inc. 12.6%
Bayer Ag 8.0%
Neogen Corporation 5.4%
Eli Lilly and Company 4.0%
Other 70.0%
Total 100%

Source: MARKETLINE

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Figure 14: United States pet healthcare market share: % share, by value, 2018

Source: MARKETLINE

Heading_1
Who are the leading players in the US pet healthcare market?

Body_Text_1
US based multinational Zoetis Inc is the leading player in the US pet healthcare market, accounting for
12.6% of the market value in 2018 and is expected to retain its lead position in the coming years. The
company accounted for value share of 29.4% in the external parasite treatments segment in 2018.
Germany based multinational Bayer Ag is the second leading player in the US pet healthcare market,
accounting for 8.01% of the market value in 2018. The company accounted for value share of 47.4% in the
worming treatments segment in 2018.
US based multinational Neogen Corporation is the third leading player in the US pet healthcare market,
accounting for 5.4% of the market value in 2018. The company accounted for value share of 23.7% in the
external parasite treatments segment in 2018.

Heading_2
Which companies have been most successful in increasing their market share since 2014?

Body_Text_2
Between 2014 and 2018, Zoetis Inc. registered the highest rise in its market share with a 0.5 percentage
points increase in the value terms in the US pet healthcare sector, increasing from 12.1% in 2014 to 12.6%
in 2018. Over the same period, value market share of Neogen Corporation increased with a 0.3 percentage
points, growing from 5.1% in 2014 to 5.4% in 2018. Moreover, Church & Dwight Co., Inc. witnessed
increase of 0.2 percentage points to its value share, up from 2.7% in 2014 to 2.8% in 2018.

Heading_3
Which companies’ market shares have suffered between 2014 and 2018?

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Body_Text_3
In the US pet healthcare market, Bayer Ag witnessed loss of value share by 0.03 percentage points
between 2014 and 2018, down from 8.05% in 2014 to 8.01% in 2018.

Heading_4
What are the most popular brands in the market?

Body_Text_4
Simplicef which is owned by Zoetis Inc., is the most popular brand in the US pet healthcare market,
accounting for a value share of 5.8%, in 2018. Furthermore, Drontal (owned by Bayer Ag) is another major
brand within the sector, which held brand value shares of 5.6%, in the same year.

Heading_5
What have been the most significant M&A deals in the US pet healthcare market over the last five years?

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Company Profiles

Company Profiles
Zoetis Inc

Company Overview
Zoetis Inc (Zoetis) is a global animal health company. It discovers, develops, manufactures and
commercializes animal health medicines and vaccines with a focus on livestock and companion animals.
The company offers anti-infective products, vaccines, parasiticides and medicated feed additives among
others. It also offers contract manufacturing services to third parties through its Client Supply Services
(CSS) organization. The company has manufacturing facilities worldwide; and it sells products to
veterinarians and livestock producers through direct marketing channels and distributors in the Americas,
Europe, Africa, Asia and Australia. Zoetis is headquartered in Parsippany, New Jersey, the US.The
company reported revenues of (US Dollars) US$5,825 million for the fiscal year ended December 2018
(FY2018), an increase of 9.8% over FY2017. In FY2018, the company’s operating margin was 29%,
compared to an operating margin of 28.7% in FY2017. In FY2018, the company recorded a net margin of
24.5%, compared to a net margin of 16.3% in FY2017.

Company Overview

Company Overview
The company reported revenues of US$1,547.0 million for the second quarter ended June 2019, an
increase of 6.3% over the previous quarter.

Business Description
Zoetis Inc. (Zoetis) discovers, develops, manufactures and commercializes animal health medicines and
vaccines, focusing on livestock and companion animals.

The company offers its products under six product categories: Anti-Infective, Vaccines, Parasiticides,
Medicated Feed Additives, Other Pharmaceutical Products and Other Non-pharmaceuticals, along with
Contract Manufacturing.

The company has 25 manufacturing facilities in 12 countries; and markets its products to countries across
North America, Europe, Africa, Asia, Australia and South America.

Zoetis Inc

Table 9: Zoetis Inc: key facts

DetailType Detail
Head office: 10 Sylvan WayParsippany, New Jersey, United

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DetailType Detail
States
Number of Employees: 10000
Website: www.zoetis.com
Financial year-end: December
Ticker: ZTS
Stock exchange: New York Stock Exchange

Source: COMPANY WEBSITE

Bayer AG

Company Overview
Bayer (or 'the group') is a life science company that develops pharmaceutical, agricultural and chemical
products. The company offers prescription and non-prescription medical products, cosmetics, seeds, plant
traits, chemical, biological crop protection products. It also offers products and solutions for the prevention
and treatment of diseases in companion and farm animals. The company markets its products under
Adalat, Xofigo, Nativo, Serenade, Canesten, Afrin, Redoxon, Baytril, Cydectin and Seresto brand names.
Bayer distributes its products directly to farmers and through pharmacies, retailers, wholesalers, hospitals,
veterinarians, supermarket and drugstore chains, It has business presence in Asia Pacific, Europe, North
America, Latin America, Africa, and the Middle East. The company is headquartered in Leverkusen,
Germany. The company reported revenues of (Euro) EUR39,586 million for the fiscal year ended
December 2018 (FY2018), an increase of 13.1% over FY2017. In FY2018, the company’s operating margin
was 9.9%, compared to an operating margin of 16.9% in FY2017. In FY2018, the company recorded a net
margin of 4.3%, compared to a net margin of 21% in FY2017.

The company reported revenues of EUR11,485.0 million for the second quarter ended June 2019, a
decrease of 11.8% over the previous quarter.

Business Description
Bayer AG (Bayer or 'the company) is a manufacturer and distributor of products for preventing, treating and
alleviating diseases. The company develops medicines for cardiovascular diseases, women’s health,
cancer, hematology, ophthalmology and other diseases. The company operates 139 manufacturing sites in
90 countries across the Americas, Europe, the Middle East and Africa, and Asia Pacific.

The company operates through five reportable segments: Pharmaceuticals, Consumer Health, Crop
Science, Animal Health and All Other segment.

The Pharmaceuticals segment offers prescription products for cardiology and women’s healthcare, and
specialty therapeutics in the areas of hematology, oncology and ophthalmology. It also includes the
radiology business that markets diagnostic imaging equipment together with the necessary contrast agents.
It also offers products for curing pulmonary hypertension, bacterial infections, dermatology and diabetes.
The segment markets these products under Adalat, Adempas, Aspirin, yasmin, Xofigo, Xarelto, Stivarga,
Mirena, Levitra brand names. The company distributes these prescription products through pharmacies
wholesalers and hospitals. In FY2018, the Pharmaceuticals segment reported revenue of EUR16,746
million, which accounted for 42.3% of the company’s revenue.

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The Crop Science segment offers seeds, plant traits, chemical and biological crop protection products and
digital for sustainable agriculture. The segment also provides pest and weed control products and services
to professional users outside the agriculture industry. It offers products under Adengo, Nativo, Serenade,
Maxforce, DeRuiters, EsplAnade, FiberMax, Flint, Movento brand names. The company sells these
products directly to farmers and through wholesalers and retailer. In FY2018, the Crop Science segment
reported revenue of EUR14,266 million, which accounted for 36% of the company’s revenue.

Consumer health segment offers non-prescription medical products, cosmetics, medicines and other self-
care solutions in the nutritional supplement, dermatology, allergy, pain and cardiovascular risk prevention,
digestive health, foot care, cough and cold and sun protection categories. The company markets these
products under Claritin, Aspirin, Aleve,Bepanthen/Bepanthol, Canesten, Afrin, Redoxon, Supradyn, Dr.
Scholl’s and Coppertone brand names. The company sells these products through supermarket and
drugstore chains, pharmacies, online retailers and other large retailers. In FY2018, the Consumer health
segment reported revenue of EUR5,450 million, which accounted for 13.8% of the company’s revenue.

The Animal Health segment offers products and solutions for the prevention and treatment of diseases in
companion and farm animals. It offers products under the advocate, advantage, Drontal, Baytril, Cydectin
and Seresto brand names. The company markets these products through veterinarians, pharmacies and
retail stores. In FY2018, the Animal Health segment reported revenue of EUR1,501 million, which
accounted for 3.8% of the company’s revenue.

The All Other segment offers business support services. It also includes operations of Currenta that
manages and operates the Chempark sites in Krefeld-Uerdingen, Dormagen and Leverkusen. In FY2018,
the All Other segment reported revenue of EUR1,605 million, which accounted for 4.1% of the company’s
revenue.

Geographically, the company operates in four regions: Europe, Middle East and Africa; North America; Asia
Pacific; and Latin America. In FY2018, Europe, Middle East and Africa accounted for 35.7% of the
company’s revenue, followed by North America (29.2%), Asia Pacific (20.5%) and Latin America (14.6%).

Bayer AG

Table 10: Bayer AG: key facts

DetailType Detail
Number of Employees: 116428
Website: www.bayer.com
Financial year-end: December
Ticker: BAYN
Stock exchange: XETRA

Source: COMPANY WEBSITE

Neogen Corp

Company Overview
Neogen Corp (Neogen) develops, manufactures and markets various products related to food and animal
safety. The company’s major products include diagnostic test kits to detect foodborne pathogens, natural
toxins, spoilage organisms, food allergens, pesticide residues, genetic modifications, meat speciation, drug

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residues, ruminant by products, animal safety and sanitation concerns, pharmaceuticals, veterinary
products, rodenticides, disinfectants, vaccines, topicals, cleaners, and insecticides. The company also
offers genetic testing services for animal safety. Neogen markets its products through sales
representatives, national and international distributors and large farm supply retail chains. Neogen and its
subsidiaries operate across the world. Neogen is headquartered in Lansing, Michigan, the US.The
company reported revenues of (US Dollars) US$414.2 million for the fiscal year ended May 2019 (FY2019),
an increase of 4.1% over FY2018. In FY2019, the company’s operating margin was 16.6%, compared to an
operating margin of 17.7% in FY2018. In FY2019, the company recorded a net margin of 14.5%, compared
to a net margin of 15.9% in FY2018.

Business Description
Neogen Corp (Neogen) develops, manufactures, and markets various products for food safety and animal
safety. Major products offered by the company include a wide range of diagnostic tests to detect toxins and
pathogens in food; pharmaceuticals; rodenticides; disinfectants; vaccines; and veterinary instruments
among others. As of May 2019, the company had approximately 27,000 customers.

The company operates through two reportable business segments, namely, Food Safety and Animal
Safety.

Neogen owns and operates nine manufacturing facilities of which five are in the US, three are in the UK
and one is in Brazil. In addition to these, the company takes other facilities on lease to meet its production
requirements. It manufactures its animal safety products in Kentucky, North Carolina, Wisconsin, Iowa,
Michigan, Tennessee, Nebraska, and California in the US, and in Ontario, Canada and Gatton, Australia
outside the US. and in Brazil and the UK outside the US; and food safety products in England and Scotland
in the UK, Indianatuba, Aracatuba and Pindamonhangaba in Brazil, Naucalpan in Mexico, Shaghai and
Beijing in China and Kochi in India. Its facility in Lansing, Michigan undertakes activities related to
production of both animal safety and food safety products.

It markets Food Safety products through a team of specialized sales personnel appointed in specific
markets. The company’s sales team works with clinics, veterinarians, and universities directly and markets
animal safety products through a network of national and international distributors.

Neogen Corp

Table 11: Neogen Corp: key facts

DetailType Detail
Head office: 620 Lesher PlaceLansing, Michigan, United States
Number of Employees: 1682
Website: www.neogen.com
Financial year-end: May
Ticker: NEOG
Stock exchange: NASDAQ

Source: COMPANY WEBSITE

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Macroeconomic Indicators

Macroeconomic Indicators
Country data

Table 12: United States size of population (million), 2014–18

Year Population (million) % Growth

2014 318.9 0.8%
2015 321.4 0.8%
2016 323.8 0.8%
2017 326.3 0.8%
2018 328.9 0.8%

Source: MARKETLINE

Table 13: United States gdp (constant 2005 prices, $ billion), 2014–18

Year Constant 2005 Prices, $ billion % Growth

2014 14,799.6 2.4%
2015 15,276.3 3.2%
2016 15,739.0 3.0%
2017 16,161.3 2.7%
2018 16,559.0 2.5%

Source: MARKETLINE

Table 14: United States gdp (current prices, $ billion), 2014–18

Year Current Prices, $ billion % Growth

2014 17,420.2 3.9%
2015 18,313.5 5.1%
2016 19,223.8 5.0%
2017 20,145.1 4.8%
2018 21,077.3 4.6%

Source: MARKETLINE

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Table 15: United States inflation, 2014–18

Year Inflation Rate (%)

2014 1.8%
2015 2.0%
2016 2.1%
2017 2.3%
2018 2.3%

Source: MARKETLINE

Table 16: United States consumer price index (absolute), 2014–18

Year Consumer Price Index (2005 = 100)

2014 121.5
2015 123.9
2016 126.4
2017 129.3
2018 132.2

Source: MARKETLINE

Table 17: United States exchange rate, 2014–18

Year Exchange rate (€/$)

2014 1.3290
2015 1.1095
2016 1.1068
2017 1.1320
2018 1.1810

Source: MARKETLINE

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Appendix
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed,
cross-checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and
supported by analysis from industry experts using highly complex modeling & forecasting tools,
MarketLine’s in-house databases provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary,
company profiles and macroeconomic & demographic information, which enable our researchers to build
an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to country. The
parameters of each definition are carefully reviewed at the start of the research process to ensure they
match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry
events and trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and
qualitative data to be combined with related macroeconomic and demographic drivers to create market
models and forecasts, which can then be refined according to specific competitive, regulatory and demand-
related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

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Industry associations
American Pet Products Association, Inc. (APPA)
225 High Ridge Road
Suite W200
Stamford, CT 06905
1 203 532 0000
1 203 532 0551
www.americanpetproducts.org

World Pet Association

135 West Lemon Avenue, Monrovia, CA 91016, USA
1 626 447 2222
1 626 447 8350

www.worldpetassociation.org

Related MarketLine research

Global Pet Healthcare
Pet Healthcare in Canada
Pet Healthcare in Asia-Pacific
Pet Healthcare in Germany
Pet Healthcare in France

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