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June 22 2021 - News
Time flies. It has been over 100 days since I started in my new position as CEO of IQI Trusted Petfood Ingredients. So, what have I learned from talking to many of our customers and suppliers during my first months? First of all, that everyone is looking forward to meeting and working together again in person. Secondly, that our industry is facing a number of challenges and that there is much to gain from combining our forces.
These are indeed challenging times. One of our customers told me that our industry is currently being confronted by five global crises: Covid-19, African swine fever, bird flu, Brexit, and a logistical crisis. On top of that, we are seeing more and more speculation in raw materials, all of which together has led to big price fluctuations. Meanwhile, the pet food market is growing, further increasing the mismatch between supply and demand. Ensuring on-time delivery of high-quality pet food ingredients at fair prices relies on finding the best working methods within that complex mix.
Availability of raw materials is a major concern, both to our suppliers and to most of our customers. At present, supply and demand of raw materials are not well balanced. There is a lot of instability in the market because many raw materials for pet food are by-products of the human food chain, which has changed dramatically due to Covid. And when ingredients are available, the logistics are very challenging due to a container shortage, containers being booked out months in advance, and prices skyrocketing. So, how do we deal with this situation?
Several of our customers have said that they consider our distribution and warehousing facilities in Europe and North America increasingly important assets of IQI. Normally, our warehouses have been used to ensure year-round availability of seasonal products. Now these facilities are becoming even more crucial, as we can use them for keeping strategic stocks of specific pet food ingredients and compensate for global supply and logistical issues. Everyone expects this situation to continue for at least the rest of this year, if not a few months longer.
Our customers also highlighted the foreign body removal capabilities at our warehouses, which ensure the removal of metal, plastic, and other particles. This is becoming an increasingly important concern for our customers, as pet parents demand pure, clean, and high-quality products. Interestingly, this ties in with the very origins of why IQI was founded 27 years ago: to supply pure products to the global pet food industry. Several customers have even highlighted our old campaign for ‘lamb should be lamb’ and ‘duck should be duck’.
At IQI, we aim to provide a guiding role to our customers in an increasingly complex supply chain with new suppliers from upcoming countries and consolidation of pet food manufacturers. Meanwhile, the pet food market is growing and consumer demand is changing more rapidly than ever with trends such as functional ingredients, humanization, and premiumization. This has resulted in new business models with more online retail and online positioning of new brands in the pet food industry, catering to specific trends and developments. This has increased competition and diversification in the market.
Because of the increasing awareness of sustainability, we are working hard to find novel ingredients, including alternative protein sources such as insects, microalgae, or seaweeds. Microalgae are also an excellent, clean, and sustainable source of omega-3 as an alternative to fish oil or salmon oil. At IQI, we are dedicated in particular to the UN’s Sustainable Development Goal (SDG) 12, to ensure sustainable consumption and production patterns, and SDG 14, to conserve and sustainably use the oceans, seas, and marine resources for sustainable development. In 2020, IQI became a member of the Pet Sustainability Coalition (PSC) to further increase our focus on sustainability and working with the right partners. I am convinced that with IQI’s assets and knowledge we can help realize PSC’s vision of a thriving and collaborative pet food industry that creates a positive impact on the communities and environments in which we do business.
My personal ambition for IQI is to become even more transparent about our supply chain: as a way of guaranteeing quality, origin, or sustainability claims and also to proactively inform our clients about changes and developments in the availability of ingredients or suitable alternatives. In the coming period, I would like to increase our focus on co-development and co-creation by working in partnerships with our suppliers and our customers. In this rapidly developing market, we need to identify new trends and developments at a very early stage and work with our suppliers in setting up a supply chain in anticipation of customer demand. On the other hand, I would like to increase collaboration with our customers and suppliers to co-develop the new products required for the pet food market of the future.
I look forward to telling you more about this over the coming year!
Mark Oostendorp is IQI Trusted Petfood Ingredients’ Chief Executive Officer (CEO), responsible for managing our facilities in the Netherlands and the USA and giving further shape to IQI’s strategic choices and the continuous icrease of added value within the petfood supply chain. Mark has more than 25 years of international leadership experience for different companies in the fields of food, agriculture and biotechnology.