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Industry Trends: Rise of TIC market in the food industry
Wednesday, 15 September, 2021, 13 : 00 PM [IST]
Ashwin Bhadri
Testing, Inspection, and Certification (TIC), are the most vital parts of quality control. It plays a significant role in maintaining food safety and quality standards. The TIC market is currently experiencing growth due to the adoption of advanced technologies in the food industry and the introduction of new and innovative solutions (virtual inspections and remote audits), to tackle the Covid-19 crisis.

Through TIC services, organizations can improve productivity, manage risk, and improve the quality, safety, and compliance of their products and services while meeting global standards.

The food industry has been embracing digital transformation with solutions that can provide real-time safety monitoring, advisories, and remote validation. Leveraging TIC practices enables companies to customize their supply chain activities according to their needs and desires, thus simplifying business practices. The TIC services industry provides services to manufacturers, traders, retailers and governments across a variety of industries.
 
According to the latest market survey on Global Testing, Inspection and Certification Market Report 2021-2026, the testing, inspection and certification market is projected to reach USD 249.4 billion by 2026 from USD 207.2 billion in 2021; it is expected to grow at a CAGR of 3.8% from 2021 to 2026.

The Role of TIC in terms of Food Safety and Quality
It is widely accepted that a quality management system in the food industry is a tool to support business survival and growth in the long term. Quality Audits and TIC are used widely in the food industry for various reasons - to evaluate management systems, obtain certifications to certain food safety and quality standards, assess the condition of premises and products, confirm legal compliance, and so on.

Nowadays, the increased interest of consumers in food safety and quality matters, triggered primarily by recent food scandals and also the increasing concern with regards to safety and hygiene due to the pandemic. It has enabled the public and private food sectors to develop a variety of food safety and quality standards.

With the increasing cases of adulteration and mixing of substances in a lot of things around us, including food products like milk, oils, and many more; there is a need for a robust TIC system in place. Consumers are also becoming more and more aware of the threats and the frauds. Conducting testing, certifications, and inspection ensures quality, safety, and trust.
 
Role of TIC during the global pandemic
Globalisation has led to the standardization of products and goods used in the food and beverages sector. Covid-19 affected the global economy in three main ways: by directly affecting production and demand, by creating supply chain and market disruption, and by its financial impact on firms and financial markets.

The Covid-19 pandemic resulted in a short-term decline in demand and revenue in the first quarter of 2020. Moreover, TIC is playing a crucial role by offering assurance that the products and services offered to customers will provide safety and health standards.
 
And in light of the recent outbreak - testing, inspection, and certification play an increasingly important role in ensuring that the products and services offered to customers, particularly in the food segment, meet the fundamental standards for safety and health. Families in metropolitan cities have become obsessed with hypermarkets, convenience stores and supermarkets that sell pre-packaged foods due to rising disposable income (DPI).

Health concerns have led consumers to read product labels carefully to determine whether the merchandise is accredited or not. As a result of the ongoing shopping pattern, the market for food certification is accelerating. Throughout the supply chain, manufacturers and importers are required to maintain food safety, quality, and acceptability.
 
There is a growing globalised demand for regulation of materials, products and processes, increasing foreign trade, globally integrating supply chains, increased corporate outsourcing of research and development activities. Apart from this, the increasing necessity to offer quality assurance to third parties will drive the long-term expansion of the TIC in the food industry in the coming times.

Business organisations in the TIC market are intensifying IT infrastructures and developing business continuity plans so that the TIC market holds the substantial potential to bounce back and even deal with the sudden outbreak. TIC services help in enhancing and protecting brand reputation, verifying products’ safety, and enabling trade.
 
Globalisation and urbanization are creating complex supply chains
TIC services are divided globally between in-house services and outsourced services. Globalisation has caused complex supply chains including the privatization of laboratories and also increasing standards of end-user efficiency. All these have escalated the demand for outsourcing TIC services.

Additionally, large corporations and state-owned establishments are outsourcing their TIC activities to reduce their costs and focus on core competencies. The evolving regulatory environment and growing demand for independent TIC services have sparked a shift from voluntary risk management to mandatory testing services, and this trend has contributed to the outsourcing of TIC services.
 
TIC also aims to increase efficiency and create opportunities for new entrants through technological innovations. Advancements in technology are continuously reshaping the traditional TIC processes and physical testing methods. For instance, automated systems, drones, integrated sensors, and so on are replacing physical inspection, which is labour-intensive and prone to human error.
 
Rapid urbanisation in developing economies, high adoption of outsourcing service models by global manufacturers, and surge in illicit trading enhance the need and growth of testing, inspection and certifications in the food industry. Also, trade wars and growth fluctuations have challenged the end-user food industry.

Industry Trends and Growth Drivers
The TIC industry is characterized by various industry trends such as growing investment in AR and VR, mounting adoption of connected devices and cloud-based technology, increasing mergers and acquisitions by industry players, and sustained consolidation of suppliers leading to globalisation.  
 
The growing Government-enforced regulations, certification requirements, and huge penalties against non-compliance parties are projected to drive the demand for TIC in the food and beverage industry. Moreover, for customer retention and business purposes, manufacturing companies necessarily need to offer quality products. With the rising growth in the TIC market now there is an increasing demand for interoperability testing and the intervention of emerging digital technologies is also boosting the growth of the TIC market in the food and beverage industry.

(The author is CEO of Equinox Labs)
 
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