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Developing Effective Manufacturing Partnerships

When vetting a potential manufacturing partner, considerations include assessing compliance with regulatory standards and GMPs, conducting an audit and ensuring the organizations are a good fit.

Around the world, the market for dietary supplements and functional foods continues to grow strongly—and Europe is no exception. However, there are significant barriers to market entry, ranging from high investment costs and tough regulation to the need for expert marketing and technical know-how. The solution for many would-be market entrants is to team up with specialist contract manufacturers and private label suppliers that can help transform a bright idea into a successful finished product.

Sales of supplements were worth €7.2 billion to the European economy in 2015 and are expected to grow by an estimated 9.5 percent to reach €7.9 billion by 2020. The picture with functional foods is slightly more complex, with Europe’s strict health claims regime making it a tougher place to do business than other regions. However, this doesn’t prevent European markets from accounting for a healthy share of predicted global growth, running at 25 percent between 2013 and 2017.

It’s a market that’s bursting with opportunity and is therefore attracting interest from a lot of hopeful new entrants. However, it also demands extensive expertise and resources in terms of marketing and regulation, in addition to technical know-how and costly production facilities. This creates obvious barriers to entry for smaller players and start-ups.

The solution for many would-be market entrants is to enlist the help of specialist contract manufacturers and private label suppliers. The former can provide capacity support for companies that already have formulations and production standards, while the latter is more of a full-service support arm that can take a product from concept to finished format. In both cases, companies may also benefit from working with a specialist in a particular delivery format, such as bars or softgels.

Of course, it’s crucial when establishing such an important partnership that customers pick the right partner. So what should potential business customers be looking for? Certainly, taking the time to audit a potential partner is critical, as are assessing compliance with regulatory standards and GMPs (good manufacturing practices), and seeking the right fit between the organizations.

A new report from Vitafoods Europe includes specifics around how and why to select a manufacturing partner, the considerations around research and development (R&D) and marketing, and tips on auditing and legal support. For more information, download the Vitafoods Insights special report “The Joys of Teamwork" for free to find out more.

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