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Revenue
12 Months Ended
Dec. 31, 2019
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue
A. Revenue from Product Sales
We offer a diversified portfolio of products which allows us to capitalize on local and regional customer needs. Generally, our products are promoted to veterinarians and livestock producers by our sales organization which includes sales representatives and technical and veterinary operations specialists, and then sold directly by us or through distributors, retailers or e-commerce outlets. The depth of our product portfolio enables us to address the varying needs of customers in different species and geographies. Many of our top selling product lines are distributed across both of our operating segments, leveraging our R&D operations and manufacturing and supply chain network.
Over the course of our history, we have focused on developing a diverse portfolio of animal health products, including medicines, vaccines and diagnostics, complemented by biodevices, genetic tests and a range of services. We refer to a single product in all brands, or its dosage forms for all species, as a product line. We have approximately 300 comprehensive product lines, including products for both livestock and companion animals across each of our major product categories.
In the fourth quarter of 2019, the company modified the list of major product categories to include a category for dermatology products, which was previously included within other pharmaceutical products. The prior period presentation has been revised to reflect the new product categories.
Our major product categories are:
vaccines: biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;
anti-infectives: products that prevent, kill or slow the growth of bacteria, fungi or protozoa;
parasiticides: products that prevent or eliminate external and internal parasites such as fleas, ticks and worms;
other pharmaceutical products: pain and sedation, antiemetic, reproductive, and oncology products;
dermatology products: products that relieve itch associated with allergic conditions and atopic dermatitis;
medicated feed additives: products added to animal feed that provide medicines to livestock; and
animal health diagnostics: portable blood and urine analysis systems and point-of-care diagnostic products, including instruments and reagents, rapid immunoassay tests, reference laboratory kits and blood glucose monitors.
Our remaining revenue is derived from other non-pharmaceutical product categories, such as nutritionals and agribusiness, as well as products and services in smaller but fast growing areas, including biodevices, genetic tests and precision livestock farming.
Our livestock products primarily help prevent or treat diseases and conditions to enable the cost-effective production of safe, high-quality animal protein. Human population growth and increasing standards of living are important long-term growth drivers for our livestock products in three major ways. First, population growth and increasing standards of living drive increased demand for improved nutrition, particularly animal protein. Second, population growth leads to increased natural resource constraints driving a need for enhanced productivity. Finally, as standards of living improve, there is increased focus on food quality and safety.
Our companion animal products help extend and improve the quality of life for pets; increase convenience and compliance for pet owners; and help veterinarians improve the quality of their care and the efficiency of their businesses. Growth in the companion animal medicines, vaccines and diagnostics sector is driven by economic development, related increases in disposable income and increases in pet ownership and spending on pet care. Companion animals are also living longer, receiving increased medical treatment and benefiting from advances in animal health medicines and vaccines.
The following tables present our revenue disaggregated by geographic area, species, and major product category:
Revenue by geographic area
 
 
Year Ended December 31,
(MILLIONS OF DOLLARS)
 
2019

 
2018

 
2017

United States
 
$
3,203

 
$
2,877

 
$
2,620

Australia
 
196

 
189

 
176

Brazil
 
293

 
295

 
300

Canada
 
206

 
203

 
184

China
 
200

 
211

 
174

France
 
117

 
130

 
121

Germany
 
153

 
147

 
137

Italy
 
112

 
104

 
89

Japan
 
158

 
149

 
138

Mexico
 
117

 
100

 
86

Spain
 
114

 
110

 
93

United Kingdom
 
198

 
181

 
149

Other developed markets
 
370

 
361

 
339

Other emerging markets
 
738

 
710

 
657

 
 
6,175

 
5,767

 
5,263

Contract manufacturing & human health
 
85

 
58

 
44

Total Revenue
 
$
6,260

 
$
5,825

 
$
5,307

Revenue exceeded $100 million in eleven countries outside the U.S. in 2019, ten countries outside the U.S. in 2018 and eight countries outside the U.S. in 2017. The U.S. was the only country to contribute more than 10% of total revenue in each year.
Revenue by major species
 
Year Ended December 31,
(MILLIONS OF DOLLARS)
2019

2018

2017

U.S.
 
 
 
Livestock
$
1,219

$
1,269

$
1,244

Companion animal
1,984

1,608

1,376

 
3,203

2,877

2,620

International
 
 
 
Livestock
1,811

1,885

1,793

Companion animal
1,161

1,005

850

 
2,972

2,890

2,643

Total
 
 
 
Livestock
3,030

3,154

3,037

Companion animal
3,145

2,613

2,226

Contract manufacturing & human health
85

58

44

Total Revenue
$
6,260

$
5,825

$
5,307


Revenue by species
 
 
Year Ended December 31,
(MILLIONS OF DOLLARS)
 
2019

 
2018

 
2017

Livestock:
 
 
 
 
 
 
Cattle
 
$
1,654

 
$
1,754

 
$
1,735

Swine
 
611

 
663

 
621

Poultry
 
559

 
522

 
479

Fish
 
134

 
132

 
118

Other
 
72

 
83

 
84

 
 
3,030

 
3,154

 
3,037

Companion Animal:
 
 
 
 
 
 
Horses
 
195

 
168

 
151

Dogs and Cats
 
2,950

 
2,445

 
2,075

 
 
3,145

 
2,613

 
2,226

Contract manufacturing & human health
 
85

 
58

 
44

Total Revenue
 
$
6,260

 
$
5,825

 
$
5,307

Revenue by product category
 
 
Year Ended December 31,
(MILLIONS OF DOLLARS)
 
2019

 
2018

 
2017

Vaccines
 
$
1,483

 
$
1,488

 
$
1,373

Anti-infectives
 
1,254

 
1,280

 
1,253

Parasiticides
 
966

 
836

 
763

Other pharmaceuticals
 
780

 
765

 
753

Dermatology
 
770

 
607

 
428

Medicated feed additives
 
470

 
485

 
475

Animal health diagnostics
 
268

 
136

 
44

Other non-pharmaceuticals
 
184

 
170

 
174

 
 
6,175

 
5,767

 
5,263

Contract manufacturing & human health
 
85

 
58

 
44

Total Revenue
 
$
6,260

 
$
5,825

 
$
5,307


B. Other Revenue Information
Significant Customers
We sell our livestock products primarily to veterinarians and livestock producers as well as third-party veterinary distributors, and retail outlets who generally sell the products to livestock producers. We sell our companion animal products primarily to veterinarians who then sell the products to pet
owners. Sales to our largest customer, a U.S. veterinary distributor, represented approximately 15%, 13% and 14% of total revenue for 2019, 2018, and 2017, respectively.