The companies announced their strategic partnership with phytogenic products on Thursday. The deal also included a minority equity investment from Cargill, but additional terms of that arrangement are not being disclosed.
“Cargill is expanding its focus and presence in the global micro-nutrition space with this [deal],” Tarun Keswani, Cargill’s Delacon Partnership lead told FeedNavigator. “Our end consumers are increasingly looking for sustainable, wholesome food derived from natural origins.”
“Our agreement with Cargill represents an opportunity to accelerate growth and invest in Delacon’s future and the future of phytogenic feed additives, as our customers are looking for solutions delivered in a natural, efficient and sustainable way – from feed to food,” said Markus Dedl, chief executive officer, Delacon.
The partnership offers the Austrian company the ability to expand its technical and go-to-market capabilities on a global scale, he told us. It helps grow the phytogenic feed additives category and also offers Cargill a way to expand its focus on additives in markets ouside the US.
“For Delacon, the partnership will give access to countries worldwide where it does not have a market presence today,” he said.
Both companies said they are looking at the partnership as a way to expand their reach into new locations or product areas.
The plant-based origins of phytogenics mean the products offer a “perfect feed additive category,” said Keswani.
“Regulatory environments across the globe are pushing for a move away from antibiotic growth promoters and once again, phytogenics make for a natural choice for impacting animal health and performance,” he said. “Finally, [the] animal nutrition industry continues to evolve, as consumers seek greater transparency and understanding of feed and are looking for feed to promote animal welfare and sustainability.”
Delacon added that the partnership has not been linked to specific products, and that it does not focus on a specific production species.
“Phytogenics are one of the most promising groups of feed additives, and are turning from a niche market into a mainstream need,” said Dedl. “We are entering a new era of phytogenic feed additives, and the next five years are decisive for the developments in this growing market.”
The partnership is expected to expand Delacon’s global footprint by offering the company access to countries where it does not currently have a market presence, said Dedl.
Cargill customers have been seeking products that improve performance and align with end consumer preferences and values, said Keswani. Working with Delacon provides the Minnesota-based company ability to offer those.
“In addition, this partnership will allow us to combine Cargill’s deep expertise in applied nutrition with the scientific knowhow and customer insight of Delacon in the area of phytogenics,” he said. “It will also allow us to expand our global R&D, technical and go-to-market capabilities.”
Efforts are set to start immediately on joint product development and to expand commercial reach of products, he said.
“We are extremely excited to combine forces to serve our customers worldwide in greater ways than ever before,” said Keswani. “We see tremendous opportunities in developing and bringing new products to market, expanding to new markets and helping our customers in new ways by bringing the best of Cargill and Delacon to them.”
The partnership also builds on the collaboration that Delacon and Cargill have already established, Cargill said.
The two companies have been working on a joint product development project, and have been discussing other partnership possibilities for several months, said Keswani.