In the News

Outsourcing: Pathogen Testing under the Microscope

The December – January edition of Food Safety Insights is now available in Food Safety Magazine. In this month’s column, we examine the changing food pathogen testing market. We look at the food pathogen testing practices of 100 food processors in the US, Canada and Mexico.

As we have reported in previous articles and posts, food processors are increasingly deciding that they are not in the food testing business and it is to their benefit to outsource their testing. Only the largest food processors are keeping their in-house labs and rest are sending samples to commercial labs – leaving the market divided between consolidating large food processor in-house labs and large commercial labs. This will have a dramatic impact on the markets for diagnostic products.

The New Face of Sanitation Programs: New Rules, New Challenges

The October – November edition of Food Safety Insights is now available in Food Safety MagazineIn this version, we look at the Sanitation Programs of food processors, how they are changing under FSMA, what tools – new and traditional – are being used and how processors are reacting to the new FSMA FDA inspections.

Food Safety Insights is a cooperative program between the industry experts at Food Safety Magazine and the food safety market experts at Strategic Consulting to bring you the latest market research, insights and trends in food safety, analytical testing, diagnostics, laboratory services, sanitation and related topics in quality and safety testing and assurance in the food and beverage industry.

In each edition of Food Safety Magazine, the Food Safety Insights column will review a market topic in food safety.  Our insights come from primary research conducted each month with food processors and laboratories throughout the United States and around the world and provide you with up-to-date facts and figures not available anywhere else. This unique program will advance your understanding of food safety markets and where the best opportunities are developing.

Strategic Consulting Expands to Meet Needs of Industrial Diagnostics Market

Strategic Consulting, Inc., has added Robert J. Ferguson as Managing Director as it continues to expand to meet the growing demand for market intelligence and business strategy in the industrial diagnostics market.

Strategic Consulting, Inc. (SCI), the leading knowledge resource for business strategy and market intelligence in the industrial diagnostics industry, announced in advance of the International Association for Food Protection (IAFP) Annual Meeting that Robert J. Ferguson has joined the company as Managing Director. Founded in 1996 by President, Tom Weschler, Strategic Consulting focuses on microbiology-based, quality and safety testing in the food, beverage, pharmaceutical, and personal care product industries, and in environmental and industrial process water.

“In our 20-year history, we’ve seen tremendous growth and change in the industrial diagnostics industry, particularly in the food safety sector,” Mr. Weschler said. “With Bob Ferguson’s expertise in all aspects of the market, plus extensive experience in business management, strategy development and international business, SCI will be expanding its services and offering our clients an even deeper skill set and knowledge base.”

Market research is vital to the development of the industrial market, and continues to be in demand. In 2017, we anticipate delivery of new editions of our report on Microbiology Testing in the Global Food Industry as well as the Food Contract Lab Report.

With more than 30 years in industrial and environmental diagnostics and laboratory businesses, Mr. Ferguson has expertise in accelerating growth, international business development, business turnarounds, M&A, and new product development in businesses ranging from start-ups to Fortune 500 corporations. Prior to joining SCI, Mr. Ferguson was Worldwide Vice President and General Manager for Becton Dickinson’s (BD) Industrial Microbiology and Clinical Media Business Unit; a $350M global business serving the clinical and industrial diagnostic markets in food safety, pharmaceutical, personal care and medical devices, with customers in more than 100 countries around the world.

Ferguson, Managing Director, Strategic Consulting, SCI

Robert J. Ferguson, Managing Director

“Having worked with Tom and Strategic Consulting for many years, I am well aware of SCI’s reputation as the leading market knowledge and strategy resource for industrial diagnostics, “Ferguson said. “I’m pleased to be joining SCI, and I look forward to contributing to and building on its outstanding work.”

In its 20-year history, SCI has built a reputation as the “go to” source in the industrial diagnostics space, in part through its 19 well-researched market reports, which are widely accepted by leading diagnostic manufacturers and investors as highly credible analyses of the industry. “SCI market reports having been developed through literally thousands of interviews with production companies worldwide in the food, pharmaceuticals and personal care industries,” Mr. Weschler said.

“Market research is vital to the development of the industrial market, and continues to be in demand,” Ferguson said. “In 2017, we anticipate delivery of new editions of our report on Microbiology Testing in the Global Food Industry as well as the Food Contract Lab Report.”

IMMR—4 is currently available online at www.strategic-consult.com, and a new edition of “Global Review of Microbiology Testing in the Industrial Market”(IMMR-5) will follow Food Micro—9 and FCLR—2, Mr. Ferguson said. SCI also will be expanding its capabilities to provide market research projects specific to individual client requirements.

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Strategic Consulting, Inc. (SCI) provides market reports and business consulting on microbiology-based quality and safety testing for food, beverages, pharmaceuticals, personal care products, environmental water and industrial-process water. With more than 100 combined years of international management in the food safety testing and industrial diagnostics marketplaces, SCI’s principals have proven success in working with venture capital backed start-ups, publicly traded companies, technology acquisitions, and transformation of underachieving companies. For more information on Strategic Consulting and its current market reports, visit www.strategic-consult.com or call +1 443 244 5245.

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Where Has the Growth in Food Safety Testing Gone?

Recent earnings reports from large industrial diagnostic companies in the food safety sector indicate a slowing of growth in this typically robust market. What’s going on? Has growth in the food safety testing market peaked, paused with the economic downturn, or just moved elsewhere?

Strategic Consulting (SCI) has just released our 19th market research report on the industrial microbiology market. Industrial Microbiology Market Review: Global Review of Microbiology Testing in the Industrial Market (IMMR-4) examines the industrial diagnostics market, which includes the food, beverage, pharmaceutical, personal care products, environmental water and industrial process sectors. You can read more about IMMR-4 here.

In addition to a detailed analysis by test volume, market value, organisms tested and methods used, IMMR-4 also provides a thorough discussion of market trends, drivers, and regulatory and topical issues specific to each sector. IMMR-4 also includes a business review of competition, consolidation and key success factors, and profiles 20 leading test manufacturers serving the industrial diagnostics market.

Extensive Primary Research in the Industrial Market

industrial market, primary research, strategic consultingIMMR-4 is based on extensive primary research into all aspects of the industrial microbiology market, including detailed interviews with producers, regulators and diagnostics competitors. SCI conducted more than 650 interviews in 23 countries around the world, with close to one-third of those interviews conducted in Asia (China, India, Indonesia, Thailand, Singapore and Vietnam) due to the region’s economic importance, in both production and consumption, in the industrial market sectors.

Interview data and other information were analyzed using a combined bottom-up and top-down approach. For example, overall market estimates were derived from the test volume numbers given by production companies, and then triangulated with other information gathered through SCI interviews and pubic information research.

In hundreds of interviews over the last two years, when QA/QC managers in production plants were asked about test volume growth, the general response was “yes, growth”. The drivers for test volume growth, such as new regulations and ongoing customer demand, are not consistent across all geographies however. North American and Asian/ROW plants report growth in test volumes, while test volume in European facilities remain flat. Although somewhat diminished, growth in micro test volumes continues even in the face of world economic issues.

In fact, the total market for industrial microbiology tests is projected to increase 25.7% over the next five years, from 2.0 billion tests in 2014 to 2.5 billion tests in 2019. This represents a 4.7% compound annual growth rate (CAGR) in test volumes, which is slower than over the past 20 years. In other words, testing is increasing but not as robustly. With many production companies implementing process improvements over the last decade, growth in test volume may be tied to increased consumption alone going forward.

What’s Up with Recent Financial Reports from Diagnostics Companies?

Given the test volumes and projected growth reported by food production companies, I was a bit surprised by the financial reports of some key companies in the food safety testing market. Roka Bioscience had no new sales of its Atlas System last quarter. Neogen reported that their food safety business grew only marginally (3%) for the current quarter. And although we can’t isolate the food safety business of industry giant bioMérieux, overall their industrial business was flat for the first nine months of the year.

With leading businesses showing little or no growth in the sizeable food safety testing market, are we seeing a market that has become overcrowded, with little or no growth remaining? Based on financial reports, it’s hard to know specifically where growth remains and where things are flat or declining, as these large companies do not report on a geographic or product basis.

Is it time to recalibrate expectations for the traditionally robust food safety testing market? Has the food safety diagnostics business reached its peak in spite of major drivers such as continued media coverage of foodborne outbreaks, ongoing implementation of FSMA, industry-wide efforts such as the Global Food Safety Initiative (GFSI), and the increased consumption of food that is sourced from all over the world?

Perhaps it’s time to recalibrate expectations for the traditionally robust food safety testing market.

I’m going to venture an uncharacteristic answer and say “perhaps”. Perhaps the increased focus on industry testing over the last ten years means that for the most part, major food producers have their testing programs (and thus volumes) in place. Perhaps the five-year economic malaise that has impacted so many countries and businesses is now affecting the until now unmatched growth engine of food safety diagnostics? Or perhaps it is all of the above.

Food Contract Labs Taking Market Share

One other possibility comes out of SCI’s recent review of a particular segment of the market, contract test labs. Over the past few years, there has been a shift in where analysis is performed with some sectors sending a greater percentage of samples outside to corporate facilities or contract testing labs. The Food Sector, driven by lab accreditation requirements among other factors, is utilizing contract labs more heavily in certain geographies.

Is competition for diagnostic manufacturers coming from businesses that had previously been among their best customers? Eurofins reported 15% growth in revenues for the first nine months of 2014. As food contract labs grow their market share in food safety testing, they are able to increase their influence over the test methods and products in use, and their purchase patterns can be different from food plant labs.

Stay tuned. As 2015 approaches, we’ll continue to watch, report and comment, here and on Linked In and Twitter.

And in the meantime, let us know what you think. Are the days of double-digit growth in food safety testing a thing of the past?

 

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FSMA & Lab Accreditation: Tipping Point for Food Safety Testing Labs?

Will FSMA and the push for accreditation of food safety testing laboratories be the tipping point in moving analysis of food samples from food plant labs to contract testing labs?

Food safety is constantly in the news, especially in the U.S. Food recalls happen with too much frequency, and when they do, they grab front-page headlines. The underlying concern is that the food we eat each day isn’t as safe as it could be. Given this fear, food production, food service and food retail companies and government regulators have increased efforts to ensure food safety, which translates into increased food safety testing.

In fact, the global market for food safety testing has grown roughly 5-10% annually, with growth in some geographic regions and testing areas (North America and pathogen testing, for example) at even higher rates. Strategic Consulting has documented this growth in food safety testing over the last 15 years in 18 market research reports.

Food Safety Test Analysis in Food Plant Labs

Until about 30 years ago, food safety testing was conducted in laboratories based at the food processing plant. Food samples collected from raw materials, the production environment or final products were taken to the food plant lab (FPL) to be analyzed. SCI research estimates that there are approximately 40,000 food plants worldwide with 25 or greater employees and, at one point, all of them had FPLs.

food safety testing, pathogen analysis, food industry labToday’s food safety tests and analysis are more complex. Test instruments are more expensive, operator training needs have increased, and documentation requirements are more extensive and involved. In addition, some food companies have restricted the types of tests (e.g. pathogen tests) that can be analyzed in the plant, further impacting the value of in-plant labs. All in all, running a FPL and generating quality data has gotten tougher.

 

food industry, food safety testing, micro labAs a result, food plants are debating whether to conduct food safety test analysis themselves, or to send the analysis outside to corporate labs or independent food contract labs (FCLs). As of 2013, SCI research found that just 86% of food plants still run FPLs.

In response to the public’s growing concerns about food safety, there have been a number of regulatory and food industry initiatives in recent years. In the U.S., the Food Safety Modernization Act (FSMA) was signed into law in 2011 and implementation is ongoing. Industry alliances like the Global Food Safety Initiative (GFSI) and the Food Laboratory Alliance also have emerged. A common goal of many of these initiatives to regain consumer confidence is the accreditation of food safety testing labs, to ensure that accurate and consistent data is being used to assess food plant safety.

Accreditation of Food Safety Testing Laboratories

Currently, most FPLs are not accredited. Recent SCI research found that just 18% of QA/QC managers said their food plant labs were accredited, and other sources have reported this percentage even lower.

food industry, food safety testing lab, accreditation

Lab accreditation is not trivial, and brings added responsibilities and costs. A sizable initial investment is usually required in order to put systems in place and provide proper training for staff. The review fee for accreditation can run $15,000 or more and, once accredited, labs can expect additional ongoing costs for staffing, management and overall compliance.

Merriam-Webster defines the “tipping point” as the critical point in a situation, process or system beyond which a significant and often unstoppable effect or change takes place. Will the drive for lab accreditation be the tipping point for food plant labs, the point at which the bulk of analysis of food samples moves outside the plant to corporate labs or contract testing labs? We think so.

In our conversations with food plant QA/QC managers and executives, we hear more and more questioning whether running a food plant lab is part of the plant’s core competencies. Are they truly adding value by having a FPL or are they just adding costs and complexities?

Food plants can get fast, quality test results from corporate labs or from increasingly sophisticated (and competitive) food contract testing laboratories. Some FCL companies are even willing to locate food safety testing services in a trailer right at the food plant, or to come in and operate the food plant’s lab outright. Additionally, more and more food company customers, including global food retail and food service companies, are requesting analytical results provided by an accredited third-party lab rather than the food plant itself.

Data from our new report, Food Contract Lab Report (FCLR), indicate that things have tipped, and that the food contract lab market is growing faster than the food safety testing market on the whole. Clearly FCLs are taking market share.

In our next post: Growth in the independent food contract laboratory market

 

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Food Safety Testing Shifts to 3rd Party Contract Testing Labs

A new report from Strategic Consulting, Inc. details the growing trend in food companies to send quality and safety testing offsite to third party contract testing laboratories. The volume of food testing conducted at contract labs is growing at a faster rate than the total food testing market, and is expected to continue to do so over the next five years.

Food companies around the world increasingly rely on 3rd party contract testing laboratories for their food quality and safety testing. In 2013, worldwide revenue for food contract testing labs will exceed $3 billion, with a compound annual growth rate of 9.4%. SCI’s Food Contract Lab Report (FCLR) is the first report to examine this market segment in detail, and reviews test volumes, revenues and emerging trends in quality and safety testing conducted by third party laboratories for food companies around the world.

With the volume of food testing conducted at contract labs growing at a faster rate than the food testing market as a whole, this trend has implications for both food companies and diagnostic test manufacturers. read more…

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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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8 Things to Know about Bacterial Outbreaks from the Recent CDC Report on Foodborne Outbreaks and Illness

I’ve spent some time analyzing the recent data released by the CDC on foodborne disease outbreaks and illnesses for the period 1998-2010. My basic conclusion from a review of the numbers is that our food supply seems to be safer than the broad estimates provided by the CDC and, as a result, reported by the news media and assumed by the general public.

I discuss some of the broad numbers in my latest blog for Food Safety Magazine, but drill down specifically into foodborne bacterial outbreaks in this blog. read more…

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Food Safety—Is It As Bad As Reported?

Marked by major food recalls, stalled regulations, a continued decline in public confidence and ever-present media coverage, 2012 won’t be remembered as a banner year for food safety.

But, what is the truth about the safety of our food? Is it as bad as reported? read more…

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Drought, STECs and the Price of Ground Beef

At least two factors will be driving up the cost of ground beef:

  • The abnormal weather that is impacting corn production.
  • The implementation of the new testing regulations for STECs.

I am not a weather expert or fully versed on raising cattle. Having said that, this year’s record high temperatures and drought conditions are certain to drive up the cost of beef. Also impacting the retail price of ground beef will be the new regulations on testing for E. coli O157 and other STECs, which went into effect on June 4, 2012. Everything indicates that the level of positive results will increase significantly under these new regulations. read more…

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