Contract manufacturers share their outlook on what 2024 will look like for contract manufacturing. Inflation and supply chain issues persist, but the market continues to evolve, creating challenges as well as opportunities for manufacturers to invest in research and development to adapt to the changing marketplace.
Nutritional Outlook: Do you anticipate an increase or a decrease in business opportunities for nutraceutical contract manufacturers in 2024, and why?
GMP Laboratories of America Inc.
Unfortunately, it looks like supply chain issues will be here to stay for the foreseeable future. Though many had anticipated that 2021 and 2022 would be the worst of it, we are still seeing raw materials and packaging components face delays that were uncommon back in 2019. With many supplement brands looking for more unique ingredients across the globe, the continued shortages and price increases have become commonplace. Inflation as well is on the top of everybody's mind. For a manufacturing company, inflation is constantly causing increases on essential parts of the manufacturing business including raw materials, freight costs, cleaning supplies, etc.
We also have had two high profile ingredients become disallowed for sale by the FDA as dietary supplements in the last two years in NMN and NAC. There is a continued worry that as brands try to use innovative ingredients, they may face issues with regulatory compliance in the future.
Mark A. LeDoux
Chairman and Chief Executive Officer
Natural Alternatives International, Inc.
Business opportunities for contract manufacturers in 2024 will probably be muted, largely because the consumer has been under economic duress. The 'nice to have' or occasionally purchased item has been replaced with 'I need this because my doctor or health care practitioner has told me it is beneficial for my health.’ That said, there is also going to be some churning in the marketplace as evidenced by the number of brands that pop up on popular websites, and then disappear at the first sign of regulatory concern. The agencies tasked with consumer protection have a tough time overseeing these product offerings, so further attention is warranted. Some of the leading companies with brand reputations have carried far too much of the burden to demonstrate to regulators that products sold on the internet are often of poor or no value given mislabeling, counterfeiting or other nefarious practices – that do little to engender confidence in our industry. Responsible entities with a presence on Capitol Hill have been carrying test results and the message to elected and appointed officials for over a decade, but the activity of the agencies tasked with oversight has been anemic. When the laws are enforced and 'shady operators' are exposed and driven from our space, I would expect a resurgence of growth in our industry which will benefit legitimate and quality conscious contract manufacturers.
Sirio Pharma and Best Formulations
We anticipate a surge in business opportunities as consumers become increasingly well-informed and demand innovation, quality, and effective products from brands. High demand is expected for clean-label, plant-based products, and science-based, efficacious products.
Despite the obvious challenges created by high inflation and post-covid consumption curbing, we anticipate an increase in business opportunities for nutraceutical contract manufacturers in 2024. Consumers may be more discerning about what they spend their money on and look for more premium formulations and products that they know will deliver proven benefits, instead of hedging their bets on a range of different multivitamins.
The surge in the popularity of gummies, coupled with the challenging formulations that involve incorporating multiple ingredients into a single gummy, is indicative of the evolving market. Moreover, the trend towards more natural and clean formulations aligns with the preferences of an increasingly health-conscious and informed consumer base. Amid current challenges, dietary supplement brands, previously boosted by the COVID-19 surge in sales, have needed to strategically diversify well beyond immunity to sustain growth. What this highlights, is the importance for brands of strategic collaborations with adaptable contract manufacturers for continuous innovation. So, in 2024, we envision contract ‘partners’ thriving, assisting brand owners in navigating challenges through intelligent ingredient sourcing and innovative concept development.