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    Features

    2022 Contract Manufacturing Survey: Nutraceuticals and Pharmaceuticals

    Our fifth annual audience survey reveals great value in, and reliance on, contract manufacturing partners.

    2022 Contract Manufacturing Survey: Nutraceuticals and Pharmaceuticals
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    By Sean Moloughney, Editor, Nutraceuticals World03.02.22
    In January and February, staff from Nutraceuticals World and Contract Pharma solicited feedback from subscribers to gain insight on the contract manufacturing market.

    We received responses from 143 qualified individuals who provided responses to a short online questionnaire. Based on responses and feedback, working with a qualified contract manufacturer offers companies flexibility to focus on sales, marketing, innovation, and business development. Results are presented via a series of graphs in the following pages.

    About a third (35%) of people who responded to this survey work with large companies employing more than 200 people while about a quarter (24%) work at small businesses with less than 25 employees. (See Figure 1.)


    In terms of the types of products companies market, poll respondents paired evenly between dietary supplements (55%) and pharmaceuticals (53%); 24% sell food/beverages. (See Figure 2.)


    About 36% of respondents said they have been working with their current contract manufacturing partner(s) for 1-5 years; 29% between 5 and 10 years; while 27% said the relationship has been more than 10 years. Another 8% said they have been working with their contract manufacturer for less than 1 year. (See Figure 3.)


    A lack of resources/expertise continues to be the most cited factor in deciding to outsource manufacturing (36%), followed by the ability to focus on other business priorities (24%), and cost savings (22%). Supply chain stability ranked next at 12%. (See Figure 4.)


    In spite of challenges during the COVID-19 pandemic, 60% said they conducted an onsite inspection of their contract manufacturer’s facilities within the last year; 29% within the last 5 years. Seven percent said their business has never conducted an onsite inspection of their contract manufacturer’s facilities. (See Figure 5.)


    Overall, quality certification continues to be the most important factor respondents cited when deciding which contractor manufacturer to partner with (31%). Industry reputation ranked second (20%) followed by turnkey services (17%), price (12%), facility inspection (10%), reliability of raw materials (7%), and location (1%). (See Figure 6.)


    As for dosage forms respondents said were most important to their business, capsules (56%) edged out tablets (53%), followed by powders (38%), softgels (25%), food/beverage (25%), and gummies (20%). (See Figure 7.)


    About half of survey respondents said COVID-19 has not changed their perspective on contract manufacturing (48%) while another half (48%) said they value contract manufacturing more today than before the pandemic. (See Figure 8.)


    When asked to explain how working with a contract manufacturer improved or affected their business, most of the responses we received were positive. Many businesses said their contract manufacturing partnerships allowed for efficiencies that benefited quality and reliability and at the same time spurred further innovation.

    Common complaints included delays due to supply chain issues with components and other raw materials. Here are a few of the anonymous responses in their own words:

    • Working with manufacturing partners allows us to parallel-path multiple projects, expanding our innovation capabilities beyond limitations of our in-house equipment/systems.
    • Outsourcing has given us the opportunity to focus our resources to other business activities. We skipped the following activities which are highly capital intensive: the need to commission a new (manufacturing) facility and equipment; to hire specialists (R&D, Production) and factory workers.  
    • They have allowed us to focus on other priorities, however, we have spent more time with them during Covid to assure that we will get our deliveries at full quantity and on time. This has not
    • always happened.  
    • A CMO provides capacity with limited financial commitment. We purchased dedicated equipment but did not have either the fixed or variable costs of a production facility beyond that except for the cost of production runs. It made manufacturing viable when demand was insufficient to support a full scale operation. However, the CMO is scalable with demand. The CMO addresses the issue of simplifying the startup of a new business endeavor with much lower risk.
    • Contract manufacturers and suppliers are the true lifeblood of the small marketing companies. They are a prized asset.   
    • They were able to take our patented process and figure out how to telescope the process. This cut the labor and product costs as well as providing novel IP for a new patent application.
    • COVID travel restrictions have made it difficult, but CMOs have improved their capability with Google glasses, etc. to virtually see critical activities. 
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