Market Insights

Microbiology Testing for Food Safety Differs Around the World

Given the increased globalization of the food supply, Strategic Consulting, Inc. investigated food microbiology testing practices in food plants around the world to document similarities and differences in food safety testing. The findings were presented last week at the American Society for Microbiology General Meeting in Boston.

Food safety is a concern worldwide, and one that is growing in visibility for the public, food companies and regulators. Food recalls are frequent, and regulations to help address food safety do not always meet expectations. Consumer concern grows along with the increasing recalls and resulting media coverage. Food producers continue to make sizable investments in food safety improvements but still remain at risk, and food service and retail companies continue to increase requirements of food producers. These issues are exacerbated as the global sourcing of the food we eat increases.

Strategic Consulting, Inc. (SCI) investigated global food microbiology testing to better understand variations in food safety testing practices across the globe. A summary of SCI findings were presented in a poster delivered last week at the American Society for Microbiology General Meeting in Boston. A detailed report on the findings entitled “Food Micro, Eighth Edition: Microbiology Testing in the Global Food Industry (Food Micro—8)” also is available from Strategic Consulting.

Download SCI’s research poster on global food micro testing.

The specific areas investigated were:

  • Food microbiology test volume
  • Routine versus pathogen testing
  • Points in the production process where food microbiology samples are collected
  • Microbiology methods used for test methods

Similarities in Food Safety Testing Around the World

Overall, food microbiology testing is high and growing all around the globe. Food microbiology test volumes are similar in North America (NA), Europe (EU) and Asia. The populations of these regions are quite different, however, and the ratio of tests/population varies, from highest in North America to lowest in Asia.

microbiology testing, food safety, world

Food microbiology testing is divided between routine microbiology, which tests for indicators of contamination in food plants and finished products, and pathogen testing, which looks for specific pathogenic organisms known to cause foodborne illness. The split between routine and pathogen testing is similar in all regions. In North America routine microbiology accounts for 76% of test volume, and in the EU and Asia it accounts for 81% and 72% of test volume respectively. The testing by organism for both routine and pathogen tests also is generally similar around the world.

Greatest Differences Are in Sample Collection and Test Methods

SCI research found that where food safety samples are collected is one of the major areas of difference around the world, and food plants in Asia differ most from those in other regions. In-process/environmental testing accounts for just 9% of total test volume in Asian food plants, while worldwide 25% of test samples are collected in process and in the production environment. Other regions collect more in-process/environmental samples to support proactive HACCP programs among other reasons. In all regions, testing of end-products accounts for 44% to 59% of test volume.

For pathogen tests, food plants in North America collect just 8% of samples from raw materials, and in-process/environmental sampling is much more prevalent at 44% of samples. In contrast, 8% of pathogen samples are collected from in-process/ environmental sources in food plants in Asia.

There are also major differences in the microbiological methods used for analysis of food safety tests. For routine testing, NA uses more easy-to-use “convenience methods” (e.g. PetrifilmTM), which account for 52% of all routine testing. The EU uses more traditional, culture-based methods, which make up 63% of routine test analysis. Pathogen testing in NA also is highly oriented toward rapid methods, with 94% of test analysis conducted with molecular and antibody-based methods. The EU still relies heavily on traditional or convenience culture methods for pathogen tests, with 61% of tests analyzed using them. Asia relies most heavily on traditional methods, for both routine and pathogen testing, of all the regions studied.

Food Micro—8 is based on 450 detailed interviews conducted in 19 countries by Strategic Consulting, Inc. SCI has researched and integrated data on food microbiology diagnostics trends and practices over the last 15 years, and published the data in eight market research reports. Delivering both extensive new data and a detailed historical perspective, Strategic Consulting market research reports are widely accepted by leading diagnostic manufacturers and investors as highly credible analyses of the industry.

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The Food Contract Lab Business Approaches 50

The third in our series of blog posts discussing the importance of food contract labs (FCLs) to the food safety testing market, this week we look at the evolution of the FCL market over the last 50 years.

Food contract labs were started by entrepreneurial scientists beginning in the late 1960s. The early FCL entrepreneurs often had areas of specialization, and set up independent laboratories to provide food company clients with services and analyses in those areas (mainly microbiology).

Over time, some of these labs grew into regional, and even national, networks of labs. Deibel and Silliker Labs are prime examples of FCLs that followed this path in the 1970s and ‘80s, and into the early ‘90s.

food contract lab, Silliker, Deibel, SGS, Eurofins

As 2000 approached, the FCL industry was undergoing major changes:

  • With financial support from their new owner, Merieux Alliance, Silliker undertook an aggressive, international growth-by-acquisition initiative.
  • IEH Laboratories began its extensive growth, principally through acquisitions of independent U.S. labs.
  • With its public listing in 1997, Eurofins embarked on an impressive growth spurt, also fueled mainly by acquisitions, that now totals 190 labs.
  • SGS began to expand into the food contract lab space, becoming a major player in the field.

TIC Companies Enter the Food Contract Lab Market

It is also worth mentioning that over the last ten years, more and more TIC (Testing, Inspection, Certification) companies are entering the FCL market. What was originally a business based on food safety expertise is evolving into one more tightly tied to the broader testing, inspection, and certification market.

Testing Inspection Certification Company, SCS, Bureau Veritas, Dekra, TUV, DNV,Germanisher Lloyd

The global TIC industry is huge, with revenues of more than $120 billion in 2010. TIC companies started over 300 years ago to provide common measurements for shipping and other commercial activities. Today the TIC industry is growing worldwide, but particularly in the emerging economies of Asia and South America, spurred by a combination of regulatory and economic factors. One key driver is increased global trade and a resulting consumer demand for improved food quality and safety. As a result, leading food manufacturers are requiring third party inspections and certifications of products and services.

Like the food contract lab market, the TIC market also is consolidating, and over the past five years there have been significant and sizable acquisitions. The ten leading TIC companies represent only 37% of the global market, but all are billion-dollar companies with tens of thousands of employees and more than 1,000 locations globally. In addition, all of these companies occupy market-leading positions in both emerging and developed economies. Most of the top-10 companies provide testing, inspection, verification, audit, accreditation and consulting services, and attempt to manage global supply chains and reduce operational, product and market risks to clients. In other words, these TIC companies have strong existing relationships with all the global food companies.

These strong, multi-faceted relationships are powerful springboards for the TIC companies in the food contract lab market—and NOT something that the traditional FCL companies have to offer. Thus TIC companies have some unique advantages over other FCLs (e.g., bundled pricing and multiple international contact points), even the more global traditional FCLs. As of now, at least four of the top-10 TIC companies are in the FCL business, and two of them (SGS and Eurofins) are among the top-3 global FCL companies based on 2013 revenue estimates.

It is hard to forecast what’s next for the food contract lab market. Given current trends and drivers, the market clearly will continue to grow and take share. Not as clear is which companies will be the dominant FCL companies five years from now.

In our next blog: What does the boom in FCLs mean for food safety diagnostics companies?

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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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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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5 Food Safety Testing Trends Expected for 2014

Food safety testing is changing dramatically, and new research from Strategic Consulting, Inc. projects 5 emerging trends for 2014.

Two new reports from Strategic Consulting, Inc. (SCI), a management consulting firm focused on food safety and industrial diagnostics, point to five major trends for 2014 in the global food microbiology testing market. SCI’s food microbiology research reports are based on extensive interviews with QA/QC managers in food processing facilities around the world, and one-on-one discussions with food safety experts from academia, government and industry, as well as diagnostic test manufacturers.

With public concern about food safety growing, and the increasing globalization of the food supply chain, it is a critical and challenging time in the food microbiology diagnostics business. There are a number of dynamics at play that present both opportunities and minefields for players in this field. As in any market, those well informed and positioned will benefit.

Data from two new reports, Food Micro, Eighth Edition: Microbiology Testing in the Global Food Industry and Food Contract Lab Report (FCLR) point to five major trends for 2014: read more…

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Global Food Contract Testing Lab Revenues Exceed $3 Billion in 2013

Strategic Consulting is pleased to announce our first report reviewing the test volumes, revenues and trends for quality and safety testing services conducted by third party laboratories for food producers around the world.

For some time now, Strategic Consulting has been following the increasing trend at food production companies around the world to send food quality and safety testing to third party contract testing laboratories. This year in fact, total revenues for food contract test labs are estimated to reach $3.05 billion, up from $1.95 billion just five years ago, at a healthy compound annual growth rate (CAGR) of 9.4% worldwide.

contract testing lab, food safety testing, Food Contract Lab Report

read more…

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Food Microbiology Testing in the Global Food Industry

As the global food chain grows more complex, food microbiology testing is increasing worldwide. An authoritative new market research report from Strategic Consulting details worldwide food microbiology testing.

Food microbiology testing varies extensively around the world. Diagnostic testing by food producers differs by geographic region, by the predominant organisms tested (Salmonella, Listeria, and Campylobacter, for example), and by the type of food product produced (meat, dairy, fruits and vegetables, or processed food). Technical differences in global testing practices also exist, such as the point in the food production chain at which samples are collected, and the test methods used for analysis.

The following data and charts from Food Micro, Eighth Edition: Microbiology Testing in the Global Food Industry (Food Micro—8) are drawn from in-depth interviews with quality and safety managers in food plants around the world. More than 450 food production facilities in 19 countries were surveyed, with more than 140 interviews conducted in Asia—in China, India, Vietnam, Thailand and Indonesia. Many of the Asian surveys were conducted in face-to-face interviews in the native language, in order to provide insights into food testing practices that to date have been difficult to gather. read more…

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Food Microbiology Market Increases 40% in 5 Years to Reach $2.9 Billion in 2013

The food microbiology testing market is healthy and robust, driven by an increasingly global food supply and focus on safe food. Strategic Consulting, Inc. projects the market value of food microbiology testing worldwide to reach $2.9 billion in 2013—an increase of 40%, or $832 million, in the past five years.

A new publication from Strategic Consulting, Inc., Food Micro, Eighth Edition: Microbiology Testing in the Global Food Industry puts the 2013 market value of worldwide microbiology testing for food safety at $2.9 billion. The market value for food micro testing has increased 40%, or $832 million, in the past five years.

In total, the global food industry will conduct 966.5 million microbiology tests this year to ensure the safety of food products and detect dangerous pathogens in food. read more…

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Many “Niches” in the Global Food Microbiology Testing Market

Due out this month, Food Micro, Eighth Edition: Microbiology Testing in the Global Food Industry (Food Micro-8) explores differences in testing by region, food segment, organisms and company structures.

Microbiology testing by food companies around the world is on the rise. Increases are occurring in all geographic regions and across all food segments. The total volume of food microbiology testing worldwide is approaching 1 billion tests annually—an increase of about 125% since 1998.
Routine and Pathogen Food Microbiology Tests Worldwide

Numerous factors are driving the increase in food microbiology testing: read more…

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Comparing Food Safety Testing Practices in the US and Europe: How Fast Is Fast Enough?

US food producers are moving more quickly to new, rapid technologies for their food safety testing programs, while their European counterparts remain more faithful to traditional microbiology test methods, according to Food Micro—7, a new market research report from Strategic Consulting, Inc.

Woodstock, VT October 2, 2012 — A new study comparing food safety testing in the United States and Europe points to key differences between these two large food producing regions, and projects continued but differing growth in the size and value of their respective food microbiology testing markets.

Food Micro, Seventh Edition: Comparison of the Food Microbiology Testing Markets in the US and EU (Food Micro—7) from Strategic Consulting, Inc. (SCI), compares total test volume, market value and growth in food microbiology testing, including the organisms tested and the technologies used for food safety testing in each region. read more…

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