Plant-based and transparent: How contract manufacturers innovate in a global market

By Adi Menayang

- Last updated on GMT

Related tags Innovation

The old adage “customer is king” rings true to most industries. But for companies working mostly in the B2B space, like contract manufacturers, the end consumer sits on an even higher throne.

The contract manufacturing sector is rife with innovation, especially when it comes to catering to a consumer market that is more and more enamored by everything plant-based​.

“Gelatin capsules used to be made exclusively from bovine or porcine skin and bones.  There is an increasing number of consumers who—for cultural or religious reasons and/or personal preference—adhere to vegetarian, kosher, or halal diets,”  ​Steve Holtby, President & CEO of Soft Gel Technologies​, told NutraIngredients-USA.

“Now, softgel capsules can be made from a variety of materials, including: fish, chicken, and some non-animal derived gelatin,”​ he added. But there are still some drawbacks in plant-derived gel cases, Holtby said—they aren’t as strong as animal-derived gels, and the porous nature of vegetarian gelatin leaves the inside to be rancid.

A source can make it or break it

“Our customers drive innovation with inquires about things they have read about that are available in botanicals which they would like to see on the market,”​ said Larry Martinez, President of Amax NutraSource​, a supplier and manufacturer of botanical extracts. “[But] one of the key components to product innovation is to first determine that you have a sustainable source of raw materials.   Without that, innovative products don't really make it to the mainstream.”

Hence, sourcing is another aspect where contract manufacturers are innovating. Transparency is a hot topic in the supplements industry​, and as regulators and the media are putting more scrutiny on the industry, many key players, contract manufacturers included, are starting to step up their game.

“Mature companies that outsource their production requirements generally are more sophisticated,” ​Mark LeDoux, chairman and CEO of Natural Alternatives International​, a supplements formulator and manufacturer, told NutraIngredients-USA. “Some of the key innovations in the marketplace over the past few years have centered on supply chain qualification and management, given the international marketplace.”

This means being able to develop a streamlined, transparent, and reliable database of ingredients sourced globally, and it involves “verification of ingredient integrity and composition, as well as quality audits of the facilities, processes, and methods of testing and validation,” ​LeDoux added.

Soft Gel Technologies, for example, invests a lot in validating raw ingredients. “Raw ingredient suppliers are not held to the same regulations as the dietary supplement manufacturer,” ​Holtby said. “We would perform—or arrange—the testing ourselves.” ​The company goes beyond analysis on its finished soft gels and does extensive testing on identity, potency, and contaminants in raw materials.

The power of “Made in”

The country in which a facility is located also has a lot of sway on the end consumer’s decision to purchase a product, fortunate news to many and unfortunate to many others.

“There are vast regions of the world where consumers prefer a product for ingestion that is made in a well-regulated and well-respected environment,” ​LeDoux said. He argued that companies with “Made in the USA” or “Made in Switzerland” labels (the location of NAI’s two facilities) has great appeal, especially to wary consumers in Asia, the Middle East, Europe, and Eastern Europe.

“Those markets remain our target and have evidenced robust growth based on our quality standards and attention to detail,” ​he added.

This is a tough stigma to beat for companies in developing regions with a not so stellar reputation in GMPs. But Holtby said that there continues to be contract manufacturers in emerging countries like India and China that are “starting to provide low cost products that meet cGMPs.”

“As these countries rapidly improve the GMP compliance of their facilities, several companies will continue to relocate their operations to these regions,”​ he added.

From catering to populations with various dietary restrictions to finding the best quality ingredients the world over, being a global player with finesse is key to be a successful and innovative contract manufacturer. Or as LeDoux put it: “While it may be expensive to send quality staff to faraway lands in very different time zones, it is clear that a product recall is far more expensive to reputation and balance sheets.”

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1 comment

Made in USA

Posted by x,

Made in Switzerland or Made in Germany maybe a good choice. Made in USA? Are you kidding?

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