A $121.2 Billion Industry on the Rise: Dietary Supplements Contract Manufacturing Market Booms with Key Players Like Nestlé Health Science, Herbalife, and Sirio Pharma

Dietary supplements contract manufacturing market has quickly transformed from a highly specialized service industry to an international juggernaut. Today, this business is set to worth a whopping $121.2 Billion by 2030.

Leading the pack in this revolution are businesses like Nestlé Health Science, Herbalife, and Sirio Pharma that are equipped with necessary expertise and strategies to fulfill customer needs.

Key Takeaways

Contract development and manufacturing organizations (CDMOs) in the dietary supplement space are becoming a go-to for many established supplement and nutrition brands.

Key players: Nestlé Health Science, Herbalife, and Sirio Pharma, among others.

Major market trends: Increased health & wellness awareness, regulatory compliance, growth in direct-to-consumer (DTC) and private-label brands, and product innovation.

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Industry Overview

The dietary supplement industry has faced a massive surge of competition. As a result, many supplement and nutrition brands are opting to outsource their manufacturing processes to contract development and manufacturing organizations (CDMOs). These CDMOs handle complete product solutions that go from product concept and development, sourcing of ingredients to encapsulation, packaging, and other processes before a supplement product is shipped to different locations. Some of the reasons brand owners are outsourcing to dietary supplements CDMOs include:

• Reduce capital and fixed operational expenses
• Quicker production process so products can be developed and released in the market at a faster rate.
• Ensure quality, control, and compliance to different health regulations and standards.
• Increase the scalability without over investing in real estate and other required manufacturing equipment and materials.

In addition, dietary supplements CDMOs also allow for a global reach, catering to international nutrition trends.

Market Size and Trends

In recent years, this market has gained increased momentum and has become a key segment in the health and wellness sector, as more brands in this category are venturing into this industry. Below are the key drivers that are significantly contributing to the growth of this market.

* Health & Wellness Megatrend: A growing number of consumers are getting more proactive about their well-being, contributing to an increased demand for immunity boosting supplements, brain supplements, cognitive function enhancers, and digestive health support products. Consumers are becoming more inquisitive about their health and are looking to supplements to help improve their lifestyles. One of the other ways in which these consumers are addressing their dietary needs is by creating a custom blend of supplements.

* The Rise of DTC and Private Label Brands: The ease with which e-commerce businesses are being launched and startups are being founded, many new supplement brands are being introduced. It is estimated that within the past five years, new direct-to-consumer (DTC) and private-label supplement brands have increased by 20%. This surge in businesses has happened mainly because these supplement manufacturers have leveraged dropshipping which has allowed them to completely depend on white-label and private-label CDMO services.

* Regulatory Pressure & Quality Standards: Regulations in the supplement industry have tightened over the years. This has been especially the case in North America, European Union, and Asia. To avoid the pressures that come with tight regulations like the need for recalls, cost, or legal action against the supplement brand, many are therefore relying on working with recognized CDMOs.

* Innovation in Ingredients and Delivery Systems: Consumer expectations and demands are evolving. Consumers, for example, are now becoming picky about the ingredients used in these supplements. They prefer clean-label products, bioavailable products and plant-based or vegan products.

Market Segmentation

The dietary supplements CDMO market can be categorized into several segments, including product types and delivery formats.

* Product Types:

* Vitamins & Minerals

* Herbal & Botanical Extracts

* Proteins, Amino Acids, and Peptides

* Probiotics and Digestive Enzymes

* Omega Fatty Acids and Functional Lipids

* Delivery Formats:

* Capsules/Tablets

* Powders

* Gummies/Jellies

* Softgels

* Liquid/Functional Beverages

Delivery Format

Capsules and tablets are traditionally the most popular format, but there’s been a significant rise in demand for gummies, powders, and functional beverages. This is due to the ease in which they can be ingested by the consumer, as well as because of improved palatability.

Industry Leaders

Leading the pack in the dietary supplement industry are Nestlé Health Science, Herbalife, and Sirio Pharma.

* Nestlé Health Science : Nestlé Health Science is a Swiss multinational food and drink processing conglomerate company that has capitalized on its opportunities to become one of the most well-known supplement and nutrition brands. It has added a number of other popular supplement brands to its name, including Garden of Life and Promensil, among others. Nestlé has become a forerunner in the supplement industry, especially after its collaboration with the firm Basileus Science.

* Herbalife : Herbalife is also another popular name in the nutritional space. This company has its main area of expertise in health and wellness businesses, and one of their biggest lines of business that they focus on and put emphasis on is the manufacturing of different dietary supplements, which is why they partner with contract manufacturers.

* Sirio Pharma : Sirio Pharma has remained to be one of the top brands in the industry. This is because it has been one of the most significant dietary supplement CDMOs worldwide. It also offers a whole gamut of turnkey services, which also includes conducting extensive research and development in an effort to scale up the dietary supplement business.

Other dietary supplements companies that are known to also be industry leaders include:

Lonza , Catalent , Bactolac , Aenova , and NHU .

Regional Outlook

* North America : As mentioned earlier, North America is a region that dominates the market. This can be credited to the mature nature of the supplement industry in the United States, as well as the high rate of health awareness and a wide range of brands offering different dietary supplements.

* Europe : When it comes to the European Union, the dietary supplements CDMO industry is projected to continue on its current growth path. This growth is as a result of the rising popularity of natural products.

* Asia : Asia has remained to be a prime business center for dietary supplements because Asia not only produces the supplements but also because the demand for the supplements is always at a high because more and more people are getting health-conscious. Within Asia, the Chinese and Indian markets have been noted to be the two key target markets in China.

Challenges and Opportunities

Challenges

* Supply Chain Disruptions: A big disruption in supply of materials, especially in raw materials has meant that there is a delay in manufacturing different products.

* Sustainability and Eco-Consciousness: There is an increased pressure for manufacturers to adopt the use of more sustainable and recyclable or biodegradable packaging. On top of this, many manufacturers are now under pressure to make sure their carbon footprints are below an acceptable range.

Opportunities

* AI and Automation: Artificial Intelligence and automation are some of the technological trends that are set to revolutionize the manufacturing of supplements. AI is increasingly being integrated into development, marketing, and customer experience strategies as well.

Final Thoughts

Dietary supplements contract manufacturing market is one that has quickly turned into a big business over the last couple of years, and it is a market that seems like it will not experience any declines in the nearest future. As a matter of fact, it is a market that is only going to get bigger because consumers are becoming more and more conscious about their health.