We received responses from 210 qualified individuals who provided responses to a short online questionnaire. Based on responses and feedback, working with a qualified contract manufacturer offers companies time and flexibility to focus on sales, marketing, product innovation, and business development. Results are presented via a series of graphs.
Most of the people who responded to this survey work with small businesses that have fewer than 25 employees (33%), but another 30% work at firms that employee more than 200 people (Figure 1).
Regarding the type of products they market, our readers were essentially split between dietary supplements (54%) and pharmaceuticals (53%); 21% sell food/beverages (Figure 2).
About 39% of respondents said they have been working with their current contract manufacturing partner for 1-5 years—which was similar to last year—while 24% said the relationship has been more than 10 years. Another 14% said they have been working with their contract manufacturer for less than 1 year (Figure 3).
For the third straight year, a lack of resources/expertise has been the most cited factor in deciding to outsource manufacturing (34%), followed by the ability to focus on other business priorities (33%), and cost savings (25%) (Figure 4).
Sixty-four percent said they conducted an onsite inspection of their contract manufacturer’s facilities within the last year, 21% within the last 5 years; meanwhile, 12% said they have never inspected their manufacturer’s facility (Figure 5).
Overall, quality certification continues to be the most important factor respondents cited about deciding which contract manufacturer to partner with (38%). Other considerations were fairly even: price (14%), industry reputation (15%), facility inspection (16%), turnkey services (15%), and location (2%) (Figure 6).
As for dosage forms respondents said were most important to their business, tablets took the lead (54%), with capsules following close behind (53%), along with powders (38%), softgels (25%), food/beverages (21%), and gummies (12%) (Figure 7).
When asked to explain how working with a contract manufacturer improved or affected their business, the majority of open-ended responses were positive. People often cited increased efficiencies, resource optimization, and generally streamlining their operations. There were some complaints as well, including manufacturing speed, customer service, and minimum order quantities (MOQs). Here are a few of the anonymous responses in their own words:
- “Allows me to focus on R&D & product and brand development. Allows me to deploy my resources in the most advantageous manner. Allows me to take advantage of unique expertise and resources of a variety of manufacturers and packagers. One cannot be an expert at everything.”
- “I was able to focus more on R&D, and manufacturing was in full compliance with all regulations. The CMO fills a
- resource gap that is too costly to address for the company. Also, there is deep expertise at the CMO that is an added benefit to our project.”
- “It has been really nice to not have to deal with day to day fires that are so frequent in manufacturing. However, the pain points have been lack of control and timeliness in getting products to us. Overall quality is our highest standard and we’ve chosen manufacturers who have a good reputation or are very transparent in procedures and forthcoming with documentation during our site audits.”
- “If their customer service department is responsive it makes our job that much easier to focus on selling and developing new products, not on chasing documents.”
- “Though there is an element of dependency on the contract manufacturer, and also the loss of secrecy of formulation, it helps in faster go-to-market, ease of launch, and competitive advantage in this fast-paced market.”
- “It had been a challenge finding a qualified, reliable contract manufacturer, and receiving decent customer service. It has been one of our most difficult challenges.”
- “So far, we get good services and utilizing our facility for other raw material manufacturing. Therefore, we are able to expand our business.”
- “Working with a contract manufacturer has allowed us to accelerate our R&D portfolio by relying on their expertise, facility, and services that we are not equipped for.”
- “The very slow turn-around from date of purchase of raw materials to delivery of finished encapsulated formulations is very frustrating. One lead time is promised, but our products are not made until
- months later.”
- “I have worked with several contract manufacturers over the years and each has their pros and cons. Some save you money but are slow and some are more costly and require higher MOQs but are faster.”