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Who are the five major competitors involved in supplying pathogen testing equipment/technologies for the food industry in North America and what differentiates each? Please include ranking by size in terms of revenue or market share.
OVERVIEW
Hello! Thank you for requesting information about the five major competitors involved in supplying pathogen testing equipment and technologies for the food industry in North America. Briefly, some key players appear to be DuPont (Qualicon, recently acquired by Hygiena), Bio-Rad, Neogen, 3M, Perkin Elmer, and ThermoFisher. I realize this is more than five! I hope you'll agree that all these players bring important qualities to the market.
Because your stated focus is on technology and equipment, not testing services, I've left companies such as ALS and Silliker (part of Merieux Nutrisciences) outside of consideration.
Differentiating brand offerings in food pathogen testing proves to be a challenge, as more and more companies develop faster technologies and players end up competing on price with low margins. To offset this, some companies offer cutting edge genetic technologies that allow companies to predict rather simply respond to food-borne safety challenges.
I've included a deep dive of my findings below. As an aside, you may find the online source Food Quality and Safety to be of interest as you explore the topic further.
METHODOLOGY
To complete this research, I began by performing a general search regarding the foodborne pathogen market. I also studied several market analyst summaries, as well as articles discussing challenges present in the current food pathogen testing environment.
MARKET SIZE AND GROWTH
Industry analyst firm Markets and Markets has estimated the global food safety testing industry at over $7.4 billion USD (2015).
A recent Research and Markets industry report estimates that food safety testing will experience a 7.5-8% CAGR (compound annual growth rate) between 2016-2021. The same report states that in 2015, the United States composed a 38% share of the global market.
The industry has experienced strong and steady growth for decades, driven by increased percentages of imported and non-local food, as well as notable food safety disasters such as the Jack in the Box e. coli tragedy in 1993. Major food recalls by global brands, heightened concern by citizens, and stiffer government regulations also play a role.
Rapid diagnostics are changing the face of food pathogen testing by shifting response time from days to hours and even minutes. Testing speed remains a key barrier for large customers in consumer packaged goods. For this reason, Markets and Markets projects that rapid testing technologies will have the most aggressive CAGR in the 2016-2021 time period.
RELEVANT CATEGORIZATIONS
Markets and Markets divides food pathogen testing by the nature of the food being studied: produce, meats, dairy, eggs, seafood/fish, and grains. As you'll see, some competitors organize their market offering that way as well.
Additional categories listed by Markets and Markets include the type of technology being employed: traditional, rapid, convenience-based, PCR (polymerase chain reaction), immunoassay-based, and "other molecular-based tests" such as HPLC (high-performance liquid chromatography). Several of the bigger players listed below tend to present themselves in terms of the technology they offer, rather than the specific food(s) for which it might be applied.
COMPETITORS: OVERVIEW
Although a number of global biotechnology firms are involved with food pathogen testing, not all of them focus on the US as a primary market. Several companies active in the States include Qualicon (formerly DuPont's food safety arm), 3M, Neogen, PerkinElmer, ThermoFisher, and Bio-Rad.
COMPETITORS: DETAIL
Environmental sanitation company Hygiena [privately held] recently announced plans to acquire Qualicon. Hygiena's strategy is to isolate specific food safety verticals by product (meat, dairy, etc.) and offer products aligned with that vertical. They also are putting forth a user-friendly, approachable information environment. This meshes well with the industry's increased focus on user experience, ever more important as hardware itself becomes more of a commodity.
Neogen [NASDAQ:NEOG] is focused on developing new test structures and recently released a five-minute aqueous test for mycotoxins. Neogen further differentiates itself by offering not only instruments but also the media (broths, peptones, agars, etc.) for testing. In 2015 the company reported just over $283 million in revenue. Notably, although it has a strong US presence the company is setting itself apart by pushing heavily into India, China, and other Asian markets.
Bio-Rad [NYSE:BIO] is a larger player; one year ago they entered into a food safety consortium with IBM and Mars. Bio-Rad reported revenues of over $2 billion in 2015. They stand out by their development of an end-to-end hardware / software fully automated DNA extraction and PCR prep solution, for use with pathogen detection kits and PCR systems.
Unsurprisingly, manufacturing behemoth 3M is also a heavyweight when it comes to food safety. The nearly $7.9 billion company (2015) noted in their annual report that healthcare (which includes food safety) composed over 17% of those overall revenues. Several major advantages for 3M include its raw scale, industry reach, and distribution channels. Based on its product pages, it would appear to differentiate itself through breadth of offering (multiple food categories, multiple types of tests) rather than on cutting edge technology.
PerkinElmer has a healthy business in food safety instrumentation and testing. They are one of the few major players to conduct cannabis testing for potency and profile, and also offer software suites alongside the more common instrument listings (leaning heavily toward spectroscopy). PerkinElmer reported 2015 revenues of just over $2.2 billion.
ThermoFisher [NYSE:TMO] has the breadth to offer both traditional and rapid food pathogen detection technologies. It focuses on PCR-based systems, and doesn't emphasize differences in types of food when listing its offerings. While not confined to food pathogen testing, its 2015 revenues were over $4.2 billion.
CONCLUSION
Food safety testing and diagnostics is a burgeoning industry that is constantly introducing technologies that respond to customers' need for speed in a crucial arena. Industry profits are being undercut by tight margins and smaller low-cost services.
One exciting development is the heightened use of genetic research to study likely food safety challenges. The recent creation of a food safety consortium means that metagenomics, or the study of "characteristics of micro-organisms and factors that influence their activity," can help scientists develop what IBM's Jeff Welser has called "healthy and protective microbial management systems."
This also means that software begins to take center stage, as it is necessary for successful DNA sequencing. This paves the way for established software leaders like IBM to play a major role in the days ahead.
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