Cargill Animal Nutrition. It has been difficult to determine the actual market shares for each company due to the lack of public information on the industry. It is also difficult because the companies compete in three types of business: straight commodities, mixed feeds, and custom feed and services. However, in general terms it can be estimated that A.L Gilbert Co. has the majority of the market share at 30%. This company has been doing business in the state of California since 1892 and enjoys great customer loyalty due to the length of relationships. The rest of the large companies like Cargill Animal Nutrition, Associated Feeds and Penny-Newman have about 10 to 11 % of the market. About 20% of the market is comprised of all the small companies that mostly deal with commodities.
Companies like Cargill are getting away from the straight commodities business and moving entirely to custom feeds made uniquely for each farm. Companies like Cargill are therefore also competing against private nutrition consultants who make custom rations for clients and assist them in booking the commodities needed for such rations. These companies are moving into added-value products to separate themselves from the competition. Table 2 shows the different product categories, their characteristics, and that of the customers that purchase them. Table 2. Product GroupingYPositioning
Product Type Description
Commodity Margins are slim. Customers are very price sensitive. Customer have high knowledge
about ingredients, manufacturing, and can easily compare competitors. Very little opportunity to be
a price leader.
Added Value Similar to commodities but with advantage perhaps in processing or delivery that may be hard to
Commodity duplicate. (ex Crimped Oats of high quality)
Commercial Customers are price sensitive. Customers perceive they have high knowledge of ingredients,
manufacturing, and look for animal production benefits. Easily comparable to competition. Pricing
is often done relative to competition (ex non-custom dairy feeds)
Added Value Products have higher differentiation from the competition. More difficult to compare. Customers
Commercial are looking for more benefits and understand the value they get in increased animal productivity.
Price according to perceived value. (ex. custom dairy feed, calf feed with unique benefits)
Source: Cargil Animal Nutrition; Effective Price Management Packet
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