Sector Watch: Food safety

Over the past five years, the food-safety market has more than doubled in size to $1.6 billion and it's expected to grow at a 5.5% clip through 2010. The U.S. food safety testing market generates sales of about $600 million, while the worldwide market for animal safety products is estimated to exceed $14 billion annually.

Corporate liability concerns and government regulations affecting food producers are increasing spending on food safety testing. Food packaging companies face serious consequences if products become contaminated by harmful bacteria, toxins, unlabeled food allergens or other contaminants. A coalition of consumer and industry groups are pressing the Bush administration to double the U.S. Food and Drug Administration’s food safety budget, now about $450 million per year.

Two companies benefiting from increased food safety testing are Neogen Corporation (Nasdaq: NEOG) and Strategic Diagnostics Inc. (Nasdaq: SDIX).

Neogen through its subsidiaries, is a leading provider of food safety testing and animal health products. Neogen’s Food Safety segment develops and markets diagnostic test kits for detecting dangerous or unintended substances in human or animal food, including food-borne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, drug or pesticide residues or general sanitation concerns. The company’s animal safety segment produces and sells pharmaceuticals, rodenticides, disinfectants, vaccines, veterinary instruments, topical ointments and diagnostic kits. Neogen markets its products directly as well as through a network of national and international distributors and large farm supply retail chains. It operates in the United States, Latin America, Asia and Europe.

---You can read the FULL article when you register (registration is free!) or sign-in to SmallCapInvestor.com---