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    Features

    2021 Contract Manufacturing Survey

    Our fourth annual audience poll indicates continued reliance on manufacturing partners, particularly for small businesses.

    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
    2021 Contract Manufacturing Survey
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    By Sean Moloughney, Editor, Nutraceuticals World03.03.21
    In January and February, staff from Contract Pharma and Nutraceuticals World solicited feedback from subscribers to understand perceptions about the contract manufacturing
    market.

    We received responses from 192 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 (45%), but another 24% work at large firms that employee more than 200 people. (See Figure 1.)


    Regarding the type of products they market, poll respondents skewed slightly toward dietary supplements (61%) compared to pharmaceuticals (46%); 26% sell food/beverages. (See Figure 2.)


    About 43% of respondents said they have been working with their current contract manufacturing partner(s) for 1-5 years; 26% between 5 and 10 years; while 19% said the relationship has been more than 10 years. Another 12% 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 (34%), followed by the ability to focus on other business priorities (26%), and cost savings (21%). (See Figure 4.)


    Fifty-two percent said they conducted an onsite inspection of their contract manufacturer’s facilities within the last year despite the challenges presented by the COVID-19 pandemic; 34% within the last 5 years; 11% said they have never inspected their manufacturer’s facility. (See Figure 5.)


    Overall, quality certification continues to be the most important factor respondents cited when deciding which contract manufacturer to partner with (39%). Turnkey services ranked second (18%); along with price (15%); industry reputation (12%); facility inspection (8%); reliable supply of raw materials (6%); and location (2%). (See Figure 6.)


    As for dosage forms respondents said were most important to their business, capsules (58%) reclaimed the top spot over tablets (53%), followed by powders (41%), softgels (32%), food/beverage (21%), and gummies (20%). (See Figure 7.)


    A majority (61%) indicated COVID-19 has not changed their perspective on contract manufacturing, but 35% said they value contract manufacturing even more today compared to before the pandemic. (See Figure 8.)


    When asked to explain how working with a contract manufacturer improved or affected their business, most of the open-ended responses were positive. Many small businesses in particular cited strong reliance on manufacturing partners to bring quality products to market in an efficient manner while focusing on core competencies.

    There were complaints as well, including long lead times, delays in production and delivery, customer service, quality concerns, and more. Here are a few of the anonymous responses in their own words:

    • “Working with a qualified contract manufacturer has allowed us to focus on our core business model and global expansion. Our qualified contract manufacturer does very well in their assigned responsibilities, leaving room for our business agility. A relationship with a contract manufacturer is a blessing, only if they are qualified and possess operational readiness to meet demand and successfully navigate market dynamics such as COVID.”
    • “Long lead time is the most challenging factor for us during the pandemic due to the supply chain and capacity from our contract manufacturers.”
    • “The key factor in working with a contract manufacturer is you’re in control. You come to a contract manufacturer to get the product you want, the way you want it, configured to meet your parameters, whether they be ingredients, potency, price, colour, shapes, packaging … there are many crucial points and as the client, you are the decision maker in these choices.”
    • “Outsourcing the day to day responsibilities of contract manufacturing is beneficial for time savings. However the lack of control on how our products are made can be challenging. The on site inspection and follow up testing is a major component of how and who we choose to do business with.”
    • “Allowed us to create products we wouldn’t normally have the expertise to do ourselves.”
    • “Our business is dependent upon sound relationships with CMOs. The difficult part is balancing our company priorities and urgencies and CMO timelines and their priorities. Constant communication between our two groups is a must.” 

    Sean Moloughney has been the Editor of Nutraceuticals World since 2012. He can be reached at SMoloughney@RodmanMedia.com.
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