Pragmatism abounds for contract manufacturers trying to accommodate innovative R&D professionals while seeking regulatory soundness and realizing manufacturing capabilities.

COst, speed, flexibility and practicality are the factors necessary when tailoring individual manufacturing approaches. With a heavy emphasis on Quality control at all procedural stages, a good contract manufacturer ensures its customers receive the highest quality products, all while offering low minimums or large-scale production efforts with fast turnaround.

One of the biggest obstacles for any manufacturer is fulfilling the customer’s every request, said Demetrius Bledsoe, director of marketing with National Enzyme Company (NEC, Forsyth, MO).

“There are so many great ideas developed by R&D professionals that are just not conceivable once it comes to manufacturing the products. There are many issues to be considered, including regulatory soundness and manufacturing capacities.”

Mike Uckele, president, CEO and owner of Uckele Health and Nutrition (Blissfield, MI), which has been formulating and manufacturing a broad spectrum of nutritional supplements for 50 years, said in his company’s case, creating a unique cutting-edge, high quality formula is not the most difficult piece of the puzzle.

“The ability to maintain an inventory of the thousands of unique, high quality ingredients for the multitude and widerange of formulas and products we manufacture in our plant can be a challenge,” he said. “Staying on top of this requires investing in a detail-oriented and experienced staff, advanced equipment, continuous training, the latest technology and equipment, and a quality facility.”

Uckele Vice President of Research and Development Jack Grogan added that, at times, it’s a challenge to determine what’s right for each individual customer for flavor, taste, color, mouth feel, capsule or tablet size, and all the considerations that go into product development.

“Guarantee of quality is a time- and cost-intensive process, so in-house quality control lab testing facilities are important to reduce the time needed to Send materials to outside labs, and get the client’s products to them sooner. A challenge for contract companies is maintaining strict quality control and safety standards, and to make it an ongoing process to continuously strengthen quality control measures through internal audits, continuing education training, and regular review and updating of SOPs.”

Another hurdle, said Paul Garrett, vice president of Alive Naturals, LLC (Wayland MI), is that small quantity orders can prove difficult because of GMP standards and required testing.

“The costs to meet these standards must be borne by smaller production Runs, which adds more to the cost per piece,” he said.

Contract Function

Contract manufacturers should serve to offer companies more competitive pricing, better margins, the ability to help build a brand and fill a void in their portfolio.

“Companies can partner with a contract manufacturer to pool their ideas with manufacturers who are trained and knowledgeable in the proper selection of quality raw ingredients to create the most effective formulas, perform the necessary quality control tests and provide a manufacturing facility that is in complete regulatory compliance,” said Uckele.

“A contract manufacturer allows small and large companies with good ideas to utilize their investment resources for business development, marketing and branding rather than investing their capital in production equipment,” he said.
But the partnership doesn’t end there.

Kevin Isley, Uckele’s vice president of sales, noted that a contracted product becomes the client company’s product, not just a product. “We take the viewpoint that the product we partner with our contract clients to create is as much our product as it is theirs. So as a partner, we take our responsibility very seriOusly to create a unique and effective formula and a compelling end product for our contract clients. At the end of the day, the consumer is looking for names and suppliers they trust for a fair price, and will gladly purchase a contracted product over a big name retail brand.”

“Because many contract manufacturers are so specialized in their offerings, it allows customers a wide variety of packaging and delivery methods,” added Harold Fox, director of sales with NEC. “This, in turn, allows them the ability to offer a wide variety of products in their product line to build a larger brand and fill voids in their product offerings. It is important that contract manufacturers offer services other than just putting powder into capsule or pill form. The end consumer wants so much more now compared to 10 years ago.So the contract manufacturer needs to offer unique delivery methods, new and innovative packaging, and patented and trademarked ingredients.”

Garrett added that quality contract manufacturers help anyone from small stores to large manufacturers expand their offerings in a cost-efficient manner.

“Additionally, we work with entrepreneurs to develop new products.Without having to invest in buildings and machinery, we can take a product from conception to reality and see the Actual results. Marketing studies can be wrong, but actual results will answer the question, ‘Is this a viable product?’”

It’s the Economy

Though contract manufacturers have found that their numbers have been very strong the first half of the calendar year, price plays a bigger role now than ever before.

“The dietary supplement industry has continued to grow as a whole in spite of the recession,” explained Uckele. “In our case, we haven’t seen any slowing in our contract manufacturing sales—in fact, we continue to see rapid growth. From our perspective, contract sales are growing in a positive direction because of the current economic climate. The contract customer is looking for the greatest value, such as low minimums and unique ingredient items and formulations.”

Grogan agreed: “More companies are turning to contract manufacturers because they provide the expertise involved for product research, development and formulation. A good contract manufacturer has that team in place, as well as a manufacturing facility that meets regulations, ready to make product ideas a reality.”

Public Image

The perception of contract manufacturing has evolved from an area that was Once looked down upon as a “copy cat” industry to one now being thought of as sophisticated.

“Contract manufacturers previously were viewed as only providing knock-off products with no innovation,” said Garrett. “Research costs were only carried by the original inventor. Now the contract manufacturer has evolved into the innovator with laboratories, in-house testing facilities and staff scientists.Their broad knowledge and expertise has now given them a competitive advantage.”


“Contract manufacturing has come a long way,” added NEC’s Bledsoe. 

“From the days of hand filling capsules and physically bottling, labeling and individually shipping, to sophisticated machinery like the facilities at NEC that are computer operated and run electronically without a paper trail. With strict cGMP compliancy being a must, enforcement from NSF and other certifying bodies within our industry make it impossible to survive without certifiable compliancy. This is a positive testament to our industry and how far we’ve come … the days of snake oils and untrustworthy sources is over.”

At the onset of the nutritional supplement industry, of the few numbers of companies that existed, most of them did their own manufacturing. “Contract manufacturing is being viewed differently now because of the expansion in services, with every aspect of the end product being overseen from concept to completion, from formulation, to testing, to production and the marketing need being satisfied,” Uckele added.

Unique and innovative packaging and delivery methods, convenience packaging and products with clinical data to support them are in high demand from contract manufacturers, while “me too” or “knockoff” products are losing favor, manufacturers say.

Other strong areas of growth, according to company executives, are sports nutrition, weight management and detox formulas. Joint support formulas remain consistently strong, a top category that is not wavering in the least.

Fruit- and vegetable-based formulations and protein meal replacement formulas are also in demand. The consumer is looking for value added products, not basic, single-ingredient vitamins, which are losing favor to more complex formulas that address a wider spectrum.

Going to market

Do manufacturers market their contracted products differently from their other products?

“I would say yes and no,” said Bledsoe. “I believe it is a macro marketing approach. We market the contract manufacturing service, based on the capabilities and capacity of our company’s facilities. Our services and raw ingredient blends are marketed to our Customers to complement and complete their products. We have proprietary blends, such as the BioCore® product line, that ensures our customers are getting the highest quality enzymes in their finished product. This is something they can market in their products that separates them from other manufactures in the dietary supplement industry.”

But there is a different approach when marketing a company’s services as a contract manufacturer and marketing the proprietary blends/products the company makes, Bledsoe added. “The objective when marketing contracted products is to explain the capabilities your company has when it comes to the manufacturing process, i.e.. blending, encapsulating, tableting, bottling, labeling, etc. Your promotional efforts must be geared around educating the prospect.”

When marketing your company’s proprietary blends/products, the main goal is to explain why the product is superior and why people should choose your company, Bledsoe said. “A nice wellrounded marketing campaign could bring all of these marketable capabilities full circle. Each complements the other. A full-service manufacturing facility that offers the highest quality ingredients, now that is a good angle! Both can be marketed separately but are very successful when marketed together.”

The Best Partnership

Oftentimes manufacturers make the mistake of miscalculating the amount of time it takes to develop a high quality, unique product properly and launched successfully, Grogan pointed out.

Underestimating time frames can be avoided by careful and thorough communication with the product development arm of the contract company to allow for a reasonable and realistic idea of time frames required from launch to completion. “When a product isn’t given the time it needs, quality can suffer, and neither partner wants to risk that,” he said.

Also, it’s very important that a manufacturer follows good manufacturing practices and be FDA compliant, Uckele noted. “Another very high priority is an experienced company that is a good partner to their clients and can take their initial idea every step of the way to craft concepts into a quality, affordable end product.

“In addition, it’s also important to find a contract company that makes both very large and very small runs, with the flexibility and capability for doing both,” he noted. “You also want a company that can offer unique, quality formulations and many varieties of packaging and products that cross a wide spectrum of basic and specific nutritional needs.”

Manufacturers should also seek contract companies that believe in partnership with the client through the whole step-by-step process. “A good contract manufacturer partners to provide product development, formulation, education and understanding of the product and how it works, and knowledge of regulatory demands and restrictions,” added Isley.

“They should also have the resources and capability to supply packaging, assist with label design, marketing, education and marketing materials.”

When choosing a contract manufacturer to work with, manufacturers should look for a company that offers full-service, high quality options that are 100 percent compliant and certifiable.

“Experience, capacity, capability and systems are all areas you should consider,” said Bledsoe. “Your contract manufacturer should be able to offer world-class service in each of these areas; remember you are relying on your manufacturer to bring your concept to fruition, you want to make sure you are supplying your customers with the quality products they deserve.”