The company has embarked on an ambitious expansion plan in Ma’anshan in Anhui Province that could add well more than 100,000 additional square feet to its existing manufacturing capacity. Much of this is in anticipation of future growth in demand for gummy delivery forms in the North American market, according Rui Yang, Sirio’s chief science officer.
“The North America market and the USA in particular are well set for sustained double-digit growth for gummy formulations. It is seen as a more consumer friendly dosage form,” Yang said.
Powerful R&D team
Yang said Sirio’s advanced capabilities give it a leg up in meeting demand in overseas markets, and this is true for domestic brands seeking to export or for North American-based firms looking for a lower cost manufacturing option. Yang said the company has a 10-member strong scientific R&D team devoted to gummy formulations alone.
“The majority of nutraceutical contract organizations don’t have enough R&D scientists and have not been built with this model in mind, or have branded arm as we do. At other end of the market, companies looking at white label options are often looking for ready-to-go formulations to enter the market quickly. One of the factors behind our ability to offer advanced development services is that domestically we also develop formulations for sale – and for even the biggest of USA brands,” Yang said.
“As consumers become more discerning, we anticipate branded companies will increasingly need specialist gummy development partners and capabilities. These advantages will be further expanded with the opening of newly opened gummy production plant, as because it’s a more integrated site – with R&D and manufacturing together,” she said.
Double digit growth
Yang said Sirio’s figures show that total gummy sales in North America were $821 million in 2016 and that the category is growing at 13% annually. And it’s easily the dominant supplement delivery form for products aimed at children, she said.
In Sirio’s view, she added, consumers are increasingly turning away from pills and want to get their nutrients in actual food or in forms that mimic food. Thus, the gummy delivery form has more potential upside than other supplement delivery vehicles. And, she said, technology is starting to conquer some of the challenges with the form.
“We now see much more stable formulations and better bioavailability amongst gummy manufactures. This means that for the consumer facing brands there are now more options for the types of nutrients they can deliver through gummy formulations – often these are in areas or combinations that had not previously been considered possible or preferable. It’s one of the main reasons we built and expanded our new gummy facility last month as we see USA customers coming to us in future with newer combinations they want to develop,” she said.
Yang said Sirio is also preparing to meet the rising tide of demand for plant based options. Bovine (and other animal)-based gelatin has long been the mainstay for gummies, but other plant-based components are becoming more important, she said.
“As gummies become the primary dosage form for some combinations and nutrients, vegan options will be essential. If you look at the USA and European markets, vegetarianism and veganism is increasingly popular – and these groups often look to supplement their diets with nutrients,” she said.
“We are already offering our customers pectin- and carrageenan-based formulations, but we also anticipate the consumer will look for low sugar and sugar free options in the future as well,” Yang said.