Contract Manufacturers: Learning from the Past, Gearing Up For the Future
The last couple of years has been full of turmoil and disruptions to virtually every aspect of the world. And behind-the-scenes heroes across many industries have ensured that the world keeps working despite numerous shutdowns, supply chain disruptions, and the general chaos of the pandemic, followed by the war in Europe.
For supplement brand owners, the contract manufacturers have been the heroes that have stepped up to ensure that the customers' health and wellness needs are met without much disturbance. Although things are looking up, contract manufacturing industry leaders know that the tumults may follow in 2023. And they have to be prepared for any disruptions and continue supporting their customers' needs as they are ready to move on to the next stages of their lives.
As consumers are ready to move towards hope and recovery, health and wellness brands are anticipating an increase in demand for dietary supplements and the international nutraceutical market to grow from $350 billion to $650 billion by 2030. As a result, supplement brand owners and contract manufacturers are amping up new product development efforts. But the increasing demand does not mean a smooth ride for supplement brand owners or contract manufacturers.
Some challenges will carry forward from last year, while some new challenges will also emerge. The prices for everything, from raw materials and packaging components to storage and shipping, are increasing, fuel prices are fluctuating as war torments Europe, and sales from war-torn Russia and Ukraine are almost non-existent. High turnover and labor shortage have resulted in high labor costs and training delays. But Vincent Tricarico, Executive Vice President of NutraScience Labs, notes that a supportive corporate culture and emphasis on work-life balance can help retain talent. And with limited cost-cutting opportunities - due to inflation - industry leaders are focusing on automation and streamlined processes to eliminate waste and save costs.
Despite these upcoming challenges, Tricarico feels that contract manufacturers are wiser with their hard-won wisdom during the pandemic. And as customers are not turning away from health and wellness products, manufacturers can face any disruptions with cohesive interconnected international networks, stronger vendor relationships, realistic forecasting, and disciplined purchasing.
Additionally, leading contract manufacturers are now monitoring customers' preferences to identify the perfect delivery platform and leveraging their experience to add value to nutraceutical products. In addition to these efforts, Tricarico also feels that going back to the basics of contract manufacturing and maintaining strong communication with all the stakeholders is imperative as contract manufacturers gear up to face the turmoil coming their way.
Here is the full article from Nutritional Outlook for more details.