Flexibility, specialization, speed and regulatory compliance make contract manufacturers competitive in the natural products marketplace.

IFC Solutions, formerly International Foodcraft Corporation, which was founded in 1939, and changed its name in July, is a producer of finished product ingredients. For the New Jersey-based company, the current state of the market of its contract manufacturing business is “extremely strong,” according to David Dukes, IFC Solutions president.

This is due, in large part, to all of the certifications that the company has accumulated, which includes kosher, certified organic, AIB Certified (American Institute of Bakeries, a third-party certifier) and Safe Quality Food Certified (SQF, a worldwide third-party certifier).

“Those four things together have added to IFC’s success. Many companies don’t have them since they are costly, difficult to obtain or just not worth it to get,” he explained. “[Manufacturers] want [to produce a particular] product, but can’t go through what’s necessary to make it themselves.” 

It should come as no surprise that good manufacturing practices (GMPs) play a role in contract manufacturers’ business, as they are facing more regulations to ensure safety and quality of products—a primary focus within the industry, added Brianne Vaskovardzic, director of marketing with Georgiabased Private Label Nutraceuticals.“The implementation of 21 CFR 111 has provided federal guidelines for good manufacturing processes for contract manufacturers as a response to questions regarding product safety within the nutraceutical space.” 

But in effect, the regulatory final ruling has been beneficial to contract manufacturers’ bottom lines. “Business Is good and demand is trending upward for manufacturing expertise and capacity for GMP-certified manufacturers,” said Jay Kaufman, CEO of Paragon Labs in California. “Our message to marketers has been, and continues to be, that quality is of utmost importance, and we are there to help protect their brand equity by meeting all GMP’s while producing the highest-quality supplements.” 

In addition, recent evidence suggests that contract manufacturing services are expanding due to a re-shoring trend that began in the current recovery. “Many companies that had gone overseas for their businesses are now returning to the United States,” said Ginny Laoudis, CEO and president of California-based Nutritional Engineering Inc. “Select specialized manufacturing and jobs are coming back to the region.

Nutritional Engineering has capitalized on this trend and is enjoying an upsurge in market orders.” 

The Client 

The types of customers that turn to contract manufacturers tend to be very specific in their needs and have the ability to purchase what they want. “A reputable branded supplement manufacturer does not typically ‘subcontract’ to a contract manufacturer and would only do so if they fully trusted the subcontractor, fully tested the products produced and had too high of a demand to carry out the order themselves,” Laoudis said.

Vaskovardzic said Private Label Nutraceuticals works with multiple verticals and clients of various sizes, including e-commerce distributors, retail chains, practitioners, health food stores, multi-level marketers, gyms, spas and more. “The reasons clients utilize Private Label Nutraceuticals as their premier manufacturer varies. Many customers need a product manufacturer that has years of experience, and can leverage that experience to help them build a successful product line that can expand their business,” she added.“Clients also choose a manufacturer as an answer to compliancy concerns—as a trusted manufacturer, we ensure that we know all the latest changes within the industry regarding regulations, ingredients, labeling and marketing.” 

Often branded supplement manufacturers use contract manufacturers to reduce overhead and simplify their procedures.“Also, as demand for a product rises, it may offer a solution to manufacturing capacity limitations, and allows distributions to increase production (and in turn, profits). On a basic level, contract manufacturing allows a business to develop a product without having to purchase expensive equipment and manufacturing facilities,” Vaskovardzic noted.

The advantages of using a contract manufacturer include the ability to get exactly the formulation, taste, texture and overall product quality that a customer is looking for. “A contract manufacturer has fast turnaround, is very customer- oriented and attentive to the customer’s needs, and is able and willing to produce the exact product that the customer wants,” said Nutritional Engineering’s Laoudis. “A contract manufacturer works quickly and efficiently to solve any product development issues and is extremely interactive with their client.” 

Kaufman said Paragon Labs is finding that most branded manufacturers have decided to outsource the manufacturing of their products. “In most cases, it’s far more economical to do so, and the skillset that a high-quality contract manufacturer brings to the relationship is hard to beat. Branded manufacturers may find it difficult to keep up with all the requirements related to manufacturing in compliance with GMPs, and they most likely would find that it’s easier and more economical for Paragon Laboratories to take care of their manufacturing and quality requirements.” 

The company is capable of scaling formulas from initial research and development concept to full-scale production. “Additionally, we offer full in-house quality control capabilities,” Kaufman added. “We stay on top of the latest industry trends, so we can offer ideas for new formulations. And we have the ability to package into bottles, jars, pouches and blister cards.” 

New Services 

Similar to IFC Solutions, Paragon Labs has added new certifications and capabilities to enhance its portfolio. Kaufman said the company recently obtained NSF GMP for Sport Certification, which many in the sports supplement community are seeking. In addition, Paragon recently began offering pouch and stick packaging, and also has the capability to manufacture organic and kosher formulas.

Nutritional Engineering focuses on providing a comprehensive range of analytical methods to assist with claim substantiation, due diligence, labeling and ingredient stability. “We are a turnkey company that provides formulation, engineering, micro-testing, packaging, labeling and in-house testing on raw materials, intermediates and its finished products,” said Laoudis. “We also offer state-of-the-art testing equipment.” 

In addition to its certifications, IFC Solutions has added cosmetic and personal care to its areas of expertise. 

“Years ago we weren’t doing that,” Dukes explained. “For example, for color in a piece of candy, you don’t care as much about the particle size. But for a lipstick, the formulation has to be ultra smooth and the particle has to be sub-micron. What’s required to grind color for that is different, so we expanded our equipment to handle those markets.” The company is also equipped to handle such consumer demands as non- GMO, trans-fat- and gluten-free—all allergen materials are isolated and carefully inventoried, Dukes added.

Staying Relevant 

As scrutiny of the supplement industry increases, contract manufacturers should offer expanded quality assurance measures. This includes specification and safety testing, quality label review, SOP (standard operating procedure) documentation systems, product quality control checks and vendor auditing.

Paragon Laboratories has invested a great deal of resources into assuring that the formulations it’s producing are GMP compliant, so it can meet its customers’ demands and concerns, according to Kaufman. “This affects many areas of the operation, particularly significant in our quality control operations where we have invested in additional staffing, laboratory instrumentation and developing new test methods to meet those requirements. 

“There are numerous instances of FDA warning letters being issued to manufacturers for their failure to manufacture products in compliance with GMPs,” he added. “It is therefore critical for branded manufacturers who outsource their manufacturing needs to have a true understanding of what they are really getting. Their analysis should not stop at who is providing a the lowest price for their product, but rather should include a careful review of whether the contract manufacturer will take the necessary steps to assure that their product is manufactured in compliance with GMP requirements.” 

In addition to increased quality control, contract manufacturers have added comprehensive support services for multiple business models, from concept to distribution, said Vaskovardzic. “Private Label Nutraceuticals not only offers complete contract manufacturing, but also custom formulation development, private label services, global fulfillment and logistics services, as well as complete marketing support. Continuing to provide multiple value-add services has helped us grow into an industry leader for supplement manufacturing.” 

Carefully managing expenses adds more benefits. “Every time a contract manufacturing organization has to go outside to purchase testing or filling equipment, it adds to the cost,” noted Laoudis. “[So you see that many] contract manufacturers have expanded their capabilities to do their own testing, purchasing high-speed filling equipment and increasing their personnel.In the end, bringing these capabilities in-house greatly cuts costs.” 

Transparency, however, can be limited.When asked about its policy, Nutritional Engineering said it is to protect the client formula and procedure to manufacturer. The company does not share its proprietary blend trade secrets.At Paragon Labs, customers are welcome to tour the facilities and review its SOPs and production documents related to their formulas.

“We spend a huge amount of timesourcing and qualifying our ingredients, so keeping those sources, as well as our manufacturer users, confidential protects the company. We make sure the people we buy from have high standards and they rely on certifications,” IFC’s Dukes added. “We try to avoid products from China, because our clients don’t like them. We depend on third-party certifiers and a lot of customers have us put in writing that none of our ingredients are from China.” 

Best Partnership 

When seeking the best contract manufacturer, Vaskovardzic advised that a company should work with a partner that can offer industry insight, as well as support throughout the product life cycle.“Quality control, multiple product offerings and trend monitoring are critical to distributors and manufacturers alike. Also, finished product manufacturers should look for a partner that can support their areas of weakness, whether it be product development, marketing, logistics, fulfillment or warehousing.” 

Dukes concluded with four practical tips for clients: “Companies should look at the certifications the contract manufacturer has attained and check if their documentation is in place. They should tour the company’s facility to examine their equipment. Finally, ask how they would handle a recall.” NIE

Contract Packaging Solutions

At this year’s Contract Pharma Contracting & Outsourcing Conference held in New Brunswick, NJ in September, New York-based PL Developments (PLD), a company with nearly 25 years of experience in the pharmaceutical and supplement industries, showcased its contract packaging service with a focus on its expanded blister packaging capabilities.

“Blister packaging is one of the fastest growing forms of packaging because it helps improve patient compliance and reduce medication errors,” said Brad Larson, vice president of contract services. “In response to customer demands, we’ve enhanced our blistering capabilities by adding both highspeed lines with in-line Vision Systems and clinical scale blistering capabilities, to allow for cost-effective packaging of clinical trial materials.” 

PLD’s packaging operations in New York comprise more than 200,000 square feet of space. The entire facility is temperature controlled and includes segregated, positive pressure, HEPA-filtered packaging suites; vision systems for in-line identification and inspection applications; and optical character recognition to ensure compliance with date and lot tracking. The company’s facilities are cGMP compliant and have been certified by various third-party agencies, including its customers.

PLD’s 85,000-square-foot manufacturing facility in Florida was designed to comply with the most stringent FDA and cGMP requirements. According to Larson, the staff brings more than 35 years of formulation development experience, and the facility features a comprehensive analytical laboratory and a diverse mix of manufacturing equipment.

PLD offers a full range of contract packaging solutions including bottling, blistering, cartoning, pouching, clamshells, twinpacks, vial packs as well as many other types of creative packaging options. In addition, the company offers a full range of contract manufacturing solutions, including manufacturing a full selection of solid oral dosage forms.

FORMOREINFORMATION:

■ IFC Solutions, (908) 862-8810
■ Nutritional Engineering Inc., (760) 599-5200
■ Paragon Labs, (310) 370-1563
■ Pharma Tech Industries, (706) 246-3555
■ PL Developments, (516) 986-1699
■ Private Label Nutraceuticals, (678) 328-3700