Elanco: Animals are at the X factor at the center of world issues

September 19, 2019

Newly focused on animal health alone, Elanco management team shares hopes for more relevance in peoples lives and deepending commitment to make real change.

Jeff Simmons has a little bit of the joy and swagger that come from deep roots (he started in horse barns in Indiana and is still at home in the state), and he's currently president and CEO of a newly independent animal health company. With the additions of Aratana Therapeutics and Bayer's animal health unit, Elanco is raring to go and ready to make a difference, Simmons says.

In a presentation this morning celebrating Elanco's first year as a dedicated animal health organization (the company is freshly separated from Eli Lilly & Co.), Simmons made the pitch that animals-both in agriculture and pets in people's homes-are the “X factor” connecting many of society's biggest problems, and he wants to “tell the story of farmers and veterinarians and why they matter so much.”

What's in pet food?

Elanco's products now fall in a roughly 50-50 split between food animal products and small animal products. That means the company is tucked right in the crease between serving the world's farmers and food animal veterinarians raising healthy animals to eat and companion animal veterinarians helping pets stay healthy in homes. So if the world's farmers struggle to raise enough animal protein to meet demand, how will that change the pet food market? Are nonanimal proteins the answer? Elanco's Aaron Schacht, EVP for innovation, regulatory and business development, took a swing at the answer.

“Pets need to eat, and they like animal- based meat,” Schacht says. “It's the early days in producing [alternative proteins] at costs consumers are willing to pay.”

Sarena Lin, EVP of corporate strategy and global marketing, chimed in on a utilitarian argument for increasingly scarce animal protein in pet food: “Most of these proteins are trimmings and the dark meat that Americans don't eat. Pet food is a great source to make sure the system is entirely closed” and entire animals get used, she said.

Simmons focused on five global issues touching on animals, starting with African swine fever, which is making it hard for the world's farmers to produce animal protein at a time when demand is increasing. It's a gap that the intriguing-but-too-new alternative proteins-showing up in Burger King's plant-based Impossible Whoppers and KFC's Beyond Fried Chicken-can't fill-that's issue No. 2. And what about the No. 3 issue, the environment?

Simmons touched on those same farmers' efforts to change the way they raise animals, use land and manage waste to appeal to a new generation of environmentally conscious consumers. Pets' positive effects on people's own physical and mental health-issues 4 and 5-rounded out the list that Elanco is poised to focus on in the coming months and years.

The struggle, Simmons says-whether for veterinarians, farmers, animal health companies, media outlets or animal health associations-will be relevance and belief.

“Can we-all of us-become relevant to these issues in societies today?” Simmons asked. “And being relevant isn't enough; we need belief … deep belief. We can't stand on the sidelines. Belief needs to be strong enough to take action.”

Simmons promised audience members that the newly independent Elanco will be sharing “practical, accountable and public” goals in the near future surrounding these big issues. He said Elanco is establishing a foundation that's “sustainable, economical and efficient” to focus on these goals.An audience member asked Simmons what being an independent company focused exclusively on animal health has meant in this first year.

“To come out of Lilly [and human pharmaceutical concerns] after 64 years, [we have] a dedicated focus on our customers, our industry and deploying our capital against our opportunities,” Simmons says. “[Before,] we did what we needed to do to generate profit and serve customers, but now Elanco is more focused, a faster company, and we don't have the nonindustry things we need to be focused on.”

Everyone will need to stay tuned for the specific goals and the future foundation that could spring up from Elanco's excitement about its new place in animal health.

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