food industry

Food Contract Labs Are Taking a Big Bite Out of Food Safety Testing

In the past 5 years, food contract labs (FCLs) have shown a compound annual growth rate (CAGR) that exceeds overall growth in the food safety testing market. Clearly, FCLs are taking market share from food plant labs (FPLs).

As covered in last week’s blog, the 40,000 food plants worldwide are finding the running of in-plant food labs to be increasingly complex. Faced with FSMA and the possible requirement of lab accreditation, particularly for analysis of food safety compliance samples, more and more food companies are questioning the role and scope of their food plant labs (FPLs)—and considering alternatives.

One alternative is to utilize a food contract lab (FCL) for all compliance samples while continuing to analyze other food safety samples at the FPL. Another is to shut down the food plant lab entirely and utilize FCLs for all food safety test analysis. Yet a third is to have a food contract lab locate a ‘lab-in-a-box’ just outside the food plant or to have the FCL take over the food plant lab operations.

Salmonella, food safety testing, food contract lab

Strategic Consulting, Inc. (SCI) has been monitoring food safety testing for 15+ years, and has documented this shift in business from FPLs to outside labs. Based on data from SCI’s thousands of interviews with food plant QA/QC managers, there is a clear trend in food plants to send samples outside for analysis. The following chart is based on SCI interviews with U.S. food plants regarding where Salmonella samples are analyzed. In 2013, 61% of U.S. food plants sent Salmonella samples outside for analysis. Just twelve years ago, in 2001, the reverse was true, and 63% of the U.S. food plants did the analysis at food plant labs.

At one point all food plants had laboratories. In the 1970s, a few entrepreneurs began what has now grown into a thriving food contract lab industry. Many of the early entrepreneurs established outside laboratories with their own expertise as the foundation. Acting as subject matter experts and consultants, these scientist-entrepreneurs provided knowledge that helped their food industry clients solve food safety issues. Many of the early food contract labs were microbiology-based, due to industry needs and the lower cost of entry for micro versus other types of testing. These early FCLs grew through personalized service, expert consulting, scientific proficiency and strong client relationships. Over time, FCLs added basic chemistry services as necessary to support the needs of food company clients.

food contract lab, food safety testing

According to Strategic Consulting’s newest market research report, Food Contract Lab Report, there are 2,350 FCLs worldwide and they generated revenues of more than $3.0 billion in 2013. In fact, over the past five years, the food contract lab industry has shown a compound annual growth rate (CAGR) that exceeds overall growth in the food safety testing market. Clearly, FCLs are taking market share from the food plant labs.


Food Contract Lab Market

The FCL growth rate varies slightly by geographic region and business area (microbiology, chemistry, services) but frankly, all areas are growing well.

FCL Geographic Region Analysis

  • Europe is the largest region based on total FCL revenues, but is showing slower growth than other geographic regions. Chemistry revenues remain strong in the EU.
  • North America is second in total revenues, but is catching the EU, driven by large increases in microbiology revenues.
  • Asia and the rest of the world (ROW) have the smallest total revenues but the greatest growth potential of the four geographic regions.

FCL Business Area Analysis

  • The microbiology business area is second in total revenues but growing quickly, with increases in both routine micro and pathogen analysis.
  • Chemistry is the largest business area but slowing in growth compared to the other business areas.
  • Currently the smallest, the Services business area is growing quite quickly due to increasing demand from food companies.

The future for food contract laboratories looks strong, and five years out, SCI expects FCLs to have continued their growth in market share. FSMA will push companies outside the U.S. (OUS) to utilize accredited labs for compliance testing, which will drive rapid growth for FCLs particularly in the markets in Asia and Latin America.

Next: The evolving nature of the food contract lab business.

 

 

 

 

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Tweeting About Food Safety

I’ve been using Twitter for close to two years now. For me, tweeting about food safety has been a natural addition to a process that I have followed for my 30+ years in food safety and industrial diagnostics—tracking on the latest food safety news, issues, regulations, technologies, etc.

Staying current in the field of food safety diagnostics is a passion of mine. It also makes good business sense given that many of my clients are industrial diagnostics companies.

So it was great to be acknowledged in a recent blog post on the Sample6 website, 15 Best Food Safety Twitter Accounts. And to be counted in among some of the best blogs addressing the myriad of issues related to food safety.

My specific area of focus relates to food safety trends and drivers—changes in regulations, food chain practices, public perceptions, etc. that will impact food safety testing in the global food industry. read more…

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Food Industry Needs Better Test Methods to Regain Consumer Confidence

Without the technology to test at multiple points along the food chain, even significant increases in end product testing won’t eliminate food recalls or restore consumer confidence in food producers.

As the number of illnesses and deaths from listeria-tainted cantaloupes grows, the safety of the U.S. food supply is again in the spotlight. So too, are the roles and responsibilities of government, food producers, food retailers and restaurants, and ultimately consumers themselves, in ensuring that food is healthy and safe.

Given the increased attention—and food recalls—consumers’ fears are growing. The 2011 Consumer Food and Product Insights Survey produced by Deloitte says that 73% of respondents are more concerned now than five years ago about the food they eat—and that number is up from 65% just last year.

Judging by the amount of food safety testing, the U.S. food industry is paying attention. Strategic Consulting (SCI) has been tracking changes to microbiology testing practices in the U.S. food industry for more than 15 years. Our latest market report, Food Micro—5, shows an increase in microbiology testing in the U.S. food industry of 14.4% since 2008. In 2010, 213.2 million microbiology tests were collected in U.S. food plants with more than 25 employees. Even more important, during the same two-year period, testing for specific pathogens like Listeria and Salmonella increased by more than 30%. read more…

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