Glowlit: Real-time feed additive data is vital

Glowlit is a platform for market intelligence that creates value for users across the animal feed supply chain. The model anonymously crowdsources data from industry professionals to give an unprecedented real-time view of the market. Glowlit works by offering users access to a free price report in exchange for entering a valid delivered price for a selected product of interest.

We founded Glowlit because we saw a gap in the market for feed additive market intelligence for small-and-medium-sized companies…”

Prior to starting Glowlit, Guy Soreq had worked in positions spanning the supply chain, including purchasing, distribution and sales of raw materials. He understood from his work in distribution that smaller companies have a real need for market intelligence and that the available solutions are often priced out of reach for small-and-medium-sized enterprises. Guy Soreq: “Glowlit was born out of a desire to solve these challenges. With it, we discovered an entirely new way of sourcing market intelligence.”

All About Feed: Did you found Glowlit because smaller companies didn’t have access to data on feed additive prices?

We founded Glowlit because we saw a gap in the market for feed additive market intelligence for small-and-medium-sized companies, which comprise about 90% of all industrial supply chain players. Multinational producers have always had the ability to access specialised market intelligence reports, but smaller distributors and suppliers have traditionally been left out. And it’s a shame, because they are a remarkable source of data with eyes and ears on the ground. In engaging with this huge part of the market through our crowdsourcing model we saw an opportunity to shift from capacity-based to demand-based intelligence, which is a far more actionable reflection of the market. Our current situation with Covid-19 has really highlighted some of the issues with overly relying on capacity. After all, what good is capacity, which at best predicts the upper limit of future supply, when markets are experiencing such significant disruption right now. We need real-time market intelligence to navigate these rough waters, and that is exactly what Glowlit offers.

We’ve seen a number of significant price spikes in the wake of Covid-19…”

Have there been many rapid shifts in prices the recent months, due to the impact of Covid-19?

We’ve seen a number of significant price spikes in the wake of Covid-19; however, these shifts are not entirely new to the animal feed industry. Consolidation among producers has always been a major factor in price volatility in our industry. Final customers often respond to this unexpected change by overstocking, further disrupting the stable, predictable flow of goods across the supply chain. The difference with Covid-19 is that now these disruptions in supply are not limited to a single producer, but are geographically based due to lockdowns, closed borders and trade restrictions. And, when multiple producers are clustered within a single region of the world, as is often the case with animal feed, we see massive disruptions to the entire supply chain. The demand side is also being impacted, from depressed economies to panic buying. Not only does this make for a volatile market, but the volatility actually looks different in different parts of the world and at different times.

What will be the long-term consequences of this impact on the feed additive market?

Already we see that Covid-19 is eliminating the old patterns of seasonality that our industry was accustomed to in terms of annual planning. This lack of predictability creates a series of challenges for companies as they try to plan feedstock purchases, operating rates and sales targets. BASF CEO Martin Brudermuller rightly pointed out that planning in our current environment is virtually impossible. BASF has stated in a press release that they will not give any financial guidance for the remainder of 2020. Navigating this new normal requires a great deal of organisational agility. Given the speed at which prices are changing, purchasing managers and sales executives need to shift from annual or quarterly planning to weekly check-ins in order to track specific products. Companies need to plan ahead while also having the flexibility to make decisions based on what the market looks like right now – e.g. “Do I buy an extra two months’ worth of feedstock this week or do I wait?” In the new normal, this is how you reach the end of the year with a healthy balance sheet.

…Covid-19 is eliminating the old patterns of seasonality that our industry was accustomed to in terms of annual planning. This lack of predictability creates a series of challenges…”

Which additives are expected to experience notable growth in the upcoming years?

The problem isn’t really overall growth in price. As one colleague in the industry once said to me, “prices go up and prices go down. It’s the speed of the price fluctuation that makes it extremely difficult to plan our purchasing, and this can leave us with too much or too little stock, both of which carry a heavy price tag.”

Take vitamin B3 (Niacin/Nicotinamide) for example. With 20% of the global capacity coming from India, the shutdown in the country has brought additional pressure to the B3 market. We’re also seeing supply issues of vitamin B3’s precursor, 3-Methylpyridine. With the capacity of both the precursor and vitamin B3 concentrated among several main suppliers, any disruption can lead to panic buying and overstocking. The price may very well come down, but the problem is the speed with which it went up in the first place. The result of this volatile price trend is that customers are left without an ability to plan forward, and this is where having a real-time day-to-day view of the market becomes critical.

How does Glowlit ensure that prices remain up to date?

At Glowlit, not only is it important that prices are up to date, but it is critical that rapid shifts in price are reflected in an accurate and timely manner. Glowlit’s algorithm continuously monitors the level of interest in a given product all around the world across the entire Glowlit community. Once the system begins to detect a shift, an alert is sent to all users who have opted in to receive notifications for that product. More users then enter, adding additional data into the system, creating a reflection of current market prices across multiple supply chains around the world in a very short timespan, even as prices are changing. This gives our Glowlit community the opportunity to review their supply chain before the market shifts beneath them, and consequently, the ability to make decisions from a position of strength.