What is in this article?:
- Contract manufacturing and GMPs: What does quality cost?
- The costs and benefits of contract manufacturing
Today’s contract manufacturers have a bigger role to play in your success than ever before. GMP requirements mandate enhanced ingredient-testing protocols that add to the burden of rolling out new products. Here's why it's worth the price.
Contract manufacturers are a vital link in the chain of consumer packaged goods in the nutrition world. From supplements to beverages, contract manufacturers help entrepreneurs bring products to life—without the overhead or the headaches.
The latest way that contract manufacturers are helping bring products to market is by staying abreast of Good Manufacturing Practice (GMP) regulations.
“This isn’t like the old days where you called somebody up and said you need 50,000 vitamin C tablets and you need them next Thursday. This is a whole new world,” said Mark LeDoux, chairman and CEO of Natural Alternatives International, a contract manufacturer in San Marcos, Calif. “GMPs stand for a lot of things, and one of them is Get More Paper. If you didn’t have it written down, it didn’t happen.”
All that paperwork is not for nothing. It’s to help vouchsafe the quality of nutritional ingredients. In today’s global supply world, it’s more important than ever to check and double-check to ensure that what’s on the label is what’s in the bottle. And that comes with a price.
“It costs quite a bit more to be GMP certified,” said Shabbir Akand, vice president of sales and marketing at NHK laboratories, based in Santa Fe Springs, Calif. “Testing costs have to be passed on to the unit cost of a product. It could be a 20 percent jump because of required testing.”
Shelf-life testing and rising costs
An example of the testing that’s now the rules of the road, Akand said, is shelf-life testing. Previously, there was no formal way of providing an expiration date on the bottom of the bottle of supplements. FDA now requires contract manufacturers to show stability data.
“That’s one of the toughest ones. Shelf-life testing is costly—whether you do it in an accelerated fashion with a stability chamber that modifies humidity and temperatures to mimic a time frame, or whether you do it in real-time,” said Akand. “Clients today ask why they have to pay for it when there didn’t seem to be a problem with it before. They don’t understand the testing that’s now required. This is where the little guy more than a big guy feels it. If someone is only buying or selling 1,000 bottles a year, this is quite a big cost on a unit cost [basis].”
The cost issue is seconded by Shaheen Majeed, marketing director at Sabinsa, a contract manufacturer and supplier with facilities in India, Utah and New Jersey. “Today everything is required to be tested so prices have gone up,” he said. “We’re spending more time not just justifying the price per thousand bottles, but telling clients it’s part of GMPs. It’s the biggest thing we’re facing today, and customers don’t get that.”
A strategy to cope with rising costs is volume buying of ingredients. This “can spread the cost of testing for incoming raw materials across a broader base,” said David Wood, CEO of Captek Softgels International, based in Cerritos, Calif. “Larger production batch sizes can minimize the cost per thousand bottle on finished material bulk testing.”