While we all have our favorite brands of dietary supplements, the brands may not be as distinct as we think from a manufacturing perspective. Dietary supplement manufacturing spans a wide spectrum. One of the most common manufacturing methods is for a finished product company to contract the manufacturing to another entity. This practice is referred to as contract manufacturing or outsourced manufacturing. Contract manufacturers have been part of the dietary supplement industry from its inception, when most finished product companies were retailers and not manufacturers. As the industry evolved, many finished product companies grew to incorporate manufacturing into their businesses. Now, the industry represents a mix of fully integrated manufacturing and outsourced manufacturing.
To the practitioner, it may seem unappealing for a brand to be manufactured by another unknown entity. This is reinforced by a highly competitive market in which the emphasis is on propriety and unique product offerings. For healthcare practitioners, brand loyalty is often based upon a complex mix of clinical efficacy, recommendations from colleagues, marketing, brand uniqueness, and perception of superior quality. Brand uniqueness and quality are often attributed to the finished product label and are thought to be the result of fully integrated ownership and control of the product from concept through sourcing, manufacturing, and ultimately finished products. While there are certainly excellent examples of vertically integrated companies that manufacture their own consistently high-quality, unique, and reliable products, vertical integration is not a necessary ingredient to the end product’s quality. In fact, it is rare to find a finished product company with a sizeable breadth of products that manufactures all its own products. Most companies outsource the manufacturing of some of their products, and some companies outsource all their products.
Why outsource manufacturing?
Manufacturing dietary supplements has become increasingly complex with the requirements of the dietary supplement current good manufacturing processes (cGMPs). Contract manufacturers are manufacturing specialists and can therefore offer great capacity for high-quality manufacturing. For some finished product companies, outsourcing manufacturing to a company that has more resources, experience, and expertise in that area can be an important element of their own cGMP compliance. This also provides greater economy of scale for smaller companies, for whom the cost of manufacturing is prohibitive. Manufacturing requires significant investments into infrastructure, quality and regulatory compliance, and technology. These capital and operating costs may far outweigh the benefits derived from any savings brought by bringing manufacturing in-house. This has become increasingly true with the advent of new technologies (eg, nanotechnology delivery systems, liquid supplement technologies, among others). These new technologies require significant capital in the form of equipment, as well as investments in additional training and quality control. Using contract manufacturers gives finished product companies access to expertise, best methodologies and reliable production.
The products practitioners recommend carry a variety of labels and represent a variety of finished product companies, yet the process from raw ingredients to finished product is more shared than may be readily apparent.
Challenges of Outsourcing
The use of contract manufacturers also presents some challenges. The finished product company bears ultimate responsibility for the quality of the products that bear their label. This means that the finished product company has to abide by cGMP regulations themselves and must also ensure that their contract manufacturers are compliant as well. Finished product companies typically provide their contract manufacturer with product specifications. These specifications include, but are not limited to, ingredient sourcing, product composition, analytical testing parameters, finished product release specifications, and labeling. Finished product companies must develop reliable ways to initially and continually re-assess the contract manufacturer in these areas. With the globalization of the ingredient supply, the prevalence of outsourcing even by contract manufacturers, and the variability in cGMP compliance by contract manufacturers, this assessment can be challenging. Finished product companies mitigate this challenge by utilizing contract manufacturers with 3rd party cGMP certification and by conducting their own qualification and audit programs. In addition, many finished product companies retain control of the raw materials as a way of increasing their quality control. In addition, many finished product companies will test finished products from a contract manufacture at their own or 3rd party laboratories to verify final product quality.
The bottom line is that the products practitioners recommend carry a variety of labels and represent a variety of finished product companies, yet the process from raw ingredients to finished product is more shared than may be readily apparent. This still presents an opportunity for brands to distinguish themselves on the basis of quality in the specifications that they set for manufacturing, as well as how well they monitor performance to those specifications. To some extent, this understanding also shifts the emphasis of establishing brand uniqueness to the research and design component of products. So, while there are indeed many paths to the mountain top, the care with which the paths are travelled and the ultimate destination itself make all the difference.