2024 Expert Outlook on Contract Manufacturing Part 2: Challenges

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Contract manufacturers share their outlook on what 2024 will look like for contract manufacturing. Inflation, regulatory, and supply chain issues persist, but the market continues to evolve, creating opportunities for manufacturers to invest in research and development to adapt to the changing marketplace.

Nutritional Outlook: What are some of the biggest challenges nutraceutical contract manufacturers will face in 2024?

Adam Ishaq
Sales Manager
GMP Laboratories of America Inc.

In the more traditional "supplement" dosage forms like capsules and tablets, we will continue to see a trend to remove excipients and create cleaner labels. Though this has been a trend for 5+ years now, it has been a slow process as many brands question whether they want to invest time in R&D and adjust their formulas that they've sold for years. With many excipient providers creating new innovation and bringing them to the brands, we are seeing these requests increase over time.

There has been a continued interest in providing great nutrition to consumers with great tasting products. Obviously, products like protein, collagen, and electrolytes have taken center stage with flavored products. However, we are seeing renewed interest in dosage forms such as flavored chewable tablets. We are also seeing customers request flavored powder formulations of formulas that previously would be solely in tablets/capsules, such as brain health or libido boosting supplements. This presents a new challenge to incorporate bitter or herbal ingredients into trendy flavored products, though thankfully at GMP Labs we have over 25 years of experience flavoring products.

In newer dosage forms like gummy vitamins, we will see new technologies continue to grow such a liquid-filled gummies and custom 3D printed molds. As gummies have become a common dosage form, I expect the technological advancements in gummy machinery to really push forward innovation in 2024.

Mark A. LeDoux
Chairman and Chief Executive Officer
Natural Alternatives International, Inc.

Some of the biggest challenges that contract manufacturers will face center on the inability of many clients to accurately forecast demand. When products achieve a marketplace surge, and the supply chain is unable to respond in a timely manner, sales are lost – often permanently – so that presents a significant problem as well. The cost of capital deployment to maintain adequate safety stocks remains elevated, often hindering margins of contract manufacturers. The other challenges that continue to exist are largely centered on shoddy adherence to the basic tenets of good manufacturing practices. Until the industry tightens up with the help of local and national regulators and the district attorney's tasked with consumer protection, the barriers to entry for 'pop-up' merchants on the internet remain a significant problem. We need a coordinated set of actions involving product seizures, fines, and judicial intervention if we are to take our industry to another level worthy of respect and admiration by our end consumers.

Another key factor is the emergence of what we call ethical self-discipline. This means that when a company receives a raw material that fails quality tests, it has the discipline to destroy the material rather than return it to the 'vendor' to be resold to other potentially less sophisticated buyers. While this is an economic hardship, it also reduces the likelihood that sub-par ingredients will be entering the marketplace and potentially cause injury to consumers. Companies that join together in efforts on Capitol Hill and in front of state legislative bodies through bona fide trade organizations (think NPA) have never been more important to the growth of our industry. Failure to be a part of this effort is very shortsighted and violates our inherent corporate fiduciary principles.

Karla Acevedo
Marketing Manager
Sirio Pharma and Best Formulations

One of the major challenges will be maintaining competitiveness, where innovation plays a crucial role. Contract manufacturers must elevate their strategies to surpass customer expectations, enabling them to provide solutions that meet unanticipated consumer needs.

Sara Lesina
General Manager
Sirio Pharma

In 2024, nutraceutical contract manufacturers will face challenges related to complex formulations, particularly in areas like “beauty from within”, where unique ingredients previously delivered through the skin are now demanded in gummies, and probiotics, where integrating live bacteria into gummies poses challenges. Nutraceutical contract manufacturers will also face challenges related to clean-label cost considerations, and sourcing pure and high-quality ingredients. I believe a focus on innovation and the support of a strong R&D team becomes essential for addressing these evolving challenges. Developing formulations that align with the expectations of an informed consumer base, with distinctive ingredients, is going to be crucial for staying competitive in the market.