Have you ever wondered about the difference between contract manufacturing vs. private label? Or perhaps you’re curious whether private label vs contract manufacturing is best for your brand. This article will clarify the distinctions between these two types of supplement manufacturing, outlining the advantages and disadvantages of each. Additionally, it will explore the reasons why many supplement brand owners choose to outsource their manufacturing.
What is Contract Supplement Manufacturing?
To fully understand the concept of contract manufacturing dietary supplements, it is important to distinguish between a Contract Manufacturing Organization (CMO) and a Contract Development and Manufacturing Organization (CDMO).
A CMO is hired by a supplement brand to handle production, which may include designing, manufacturing, and shipping the products. They focus on producing the final product according to the brand’s formula and ensure it meets quality and regulatory standards.
A CDMO, on the other hand, offers both research and manufacturing services. They provide a wider range of support, including product development, regulatory guidance, quality control, and supply chain management. CDMOs are involved in every step, from research and development to manufacturing and packaging.
In both cases, CMOs and CDMOs create custom dietary supplements based on the brand’s specifications.
Advantages of Contract Manufacturing
With a CMO or CDMO, you have extensive control over product quality and formulation when contract manufacturing nutritional supplements. You can choose the specific nutraceutical ingredients to include in your product, whether they are branded ingredients you’ve researched for quality and effectiveness or more generic versions. The key point is that the choice is yours.
By working with a contract manufacturer, especially a CDMO, you also gain access to their expertise and resources. Their team often includes experts with decades of experience, who can guide you through everything from ingredient selection to regulatory compliance.
One of the biggest advantages of working with a CMO or CDMO is the ability to innovate and stand out in a crowded market. The supplement industry is full of similar “me too” products, so differentiating your brand is crucial. You can achieve this through using innovative ingredients and delivery methods, something a CDMO can assist you with. This allows you to create truly unique products that set your brand apart.
Another benefit of working with a CDMO is the flexibility to scale production up or down as needed. When you bring a new supplement product to the market, it’s hard to predict sales. It can be disappointing if sales are low, but even more frustrating if demand is high and your manufacturer can’t keep up. Unfortunately, this happens often. That’s why it’s important to choose a CDMO capable of scaling production to meet increased demand, ensuring smooth transitions as your sales grow.
Disadvantages of Contract Manufacturing
Working with a CMO or CDMO may involve higher upfront costs. This is because the formula being created is unique to your brand, which requires meeting minimum order quantities. However, if your first production batch sells well, most brand owners find that these initial costs aren’t a long-term issue and often increase their purchase orders for future batches.
Creating a unique product also means the process is more complex and time-consuming. This includes sourcing raw materials and developing an R&D batch. The good news is that this longer process usually only applies to the first production batch, while future batches tend to move much faster.
Another downside of manufacturing a unique formula is less control over pricing. Some key ingredients you choose may cost more than others, impacting the overall price of your product. An experienced and knowledgeable CMO or CDMO can guide you toward ingredient combinations that achieve the desired benefits at your desired price point.
What is Private Label Supplement Manufacturing?
Unlike contract manufacturing, private label manufacturing involves a supplement brand paying a third-party manufacturer to produce an existing generic product formula, which the brand then sells under its own name. This approach is also known as white labeling. If you’re wondering about the difference between white label and private label, there’s no distinction—white label is simply another term for private labeling.
Advantages of Private Label Supplement Manufacturing
Private label supplement manufacturing offers several advantages, including lower upfront costs, a faster and easier process, and more control over pricing.
With lower upfront costs, the minimum order quantities for preexisting formulas can be very low, sometimes just a few cases or a few hundred bottles. This means there’s a much smaller initial investment required to get started.
The process is quicker and easier because the formulas already exist. There’s no need for development time, and often, raw materials are already in stock. Essentially, the brand owner selects a formula, places an order, and that’s most of the process.
You also have more control over pricing, as the cost is usually fixed. Since the formula can’t be adjusted, it’s easier to set a budget and plan around predictable pricing.
Disadvantages of Private Label Supplement Manufacturing
While private label supplement manufacturing has its advantages, there are also some distinct disadvantages, including less control over product quality and formulation, limited access to expertise and resources, difficulty in differentiating products, and the potential for product discontinuation.
- Less Control Over Quality and Formulation: With private label manufacturing, you have no control over the formulas since they are pre-existing. This means you can’t make any changes, such as adding or removing ingredients. You are also stuck with the quality of the raw materials used in the formulation. For example, if the product is offered in tablet form but you’d prefer capsules, you can’t change it.
- Limited Access to Expertise: Because all formulas are pre-existing, you have limited access to the expertise and resources of specialized manufacturers. There’s no need for in-depth knowledge or the ability to request specialized ingredients beyond what is already in stock.
- Difficulty in Differentiating Products: Many brands may offer the same exact product, making it hard to stand out in the market. As a result, consumers might choose your product based solely on price.
- Potential for Product Discontinuation: If the private label manufacturer decides to discontinue a product, you can’t simply move your production to another manufacturer because you don’t own the formula. This means you may also have to stop selling the product.
Why do Supplement Brand Owners Consider Outsourcing Manufacturing?
Supplement brand owners choose to outsource manufacturing for several reasons.
First, setting up in-house development and manufacturing of dietary supplements requires a significant investment in equipment, skilled personnel, and suitable facilities. Additionally, getting the manufacturing process up and running can take many months, leading to substantial resource expenditures during that time.
For most brand owners, it makes more sense to partner with a qualified CDMO to access the expertise and resources they lack in-house. This collaboration helps ensure that their products meet high-quality standards. It also allows brand owners to focus on their core business activities instead of spreading themselves thin in an area where they may not have expertise.
Why Vitaquest’s Contract Manufacturing Services are the Top Choice for Supplement Brands
Vitaquest is a CDMO that has provided supplement brands with exceptional supplement research and development, manufacturing, packaging design, powder and particle engineering services using fluid bed, oscillation, and roller compaction technologies, and fulfillment solutions for over 45 years. Whether you’re a newcomer to the industry or aiming to diversify your product range, Vitaquest possesses the expertise, cutting-edge facilities, and solutions needed to swiftly and effectively turn your supplement concept into reality. Vitaquest offers a variety of dosage forms, including capsules, tablets, chewable tablets, oral disintegrating tablets (OTD), effervescent, and powders. Furthermore, you’ll receive an exceptional level of customer support.
Vitaquest brings expertise in domestic and international regulatory standards and sustainability practices. By sourcing sustainable ingredients and employing eco-friendly manufacturing processes, we help enhance brand appeal. Our FDA cGMP compliance, along with third-party GMP certifications from NSF, USP, and others, assures brand owners and consumers that we meet rigorous industry standards. Additionally, our Kosher, Halal, certified organic offerings and FSSC 22000 certification for food safety demonstrate our commitment to manufacturing excellence.
Concluding Thoughts
This article discussed the differences between private label and contract manufacturing. In summary, when you partner with a CMO or CDMO, you can create unique and innovative custom products that help differentiate your brand. In contrast, private label manufacturing involves purchasing generic, pre-existing supplement formulas and selling them under your own brand name. However, many other brands may offer the same formulas, making it difficult to stand out in the market.
Therefore, working with a CDMO is the best option for developing your brand identity. Vitaquest is an excellent choice if you want to collaborate with a top-tier CDMO that possesses decades of experience.
To learn how Vitaquest can help you custom manufacture unique, innovative, and high-quality dietary supplements you’ll be proud to bring to the market, call 800-526-9095 to speak with one of our knowledgeable sales executives or request a nutraceutical manufacturing price quote if you’ve already finalized your project specifications.
Frequently Asked Questions About Contract Supplement Manufacturing vs. Private Label Supplement Manufacturing
Q: Why would a brand choose contract manufacturing over private label for supplements?
With private label manufacturing, you can’t differentiate your products since you are purchasing preexisting supplement formulas and selling them under your own brand name, as are dozens of other brands. With contract manufacturing, you can create truly unique and innovative products for the marketplace, thereby differentiating your brand.
Q: Are there minimum order requirements with contract manufacturing for supplements?
Yes, there are minimum order requirements. This may differ depending on your formulation. To understand more, contact Vitaquest at 800-526-9095 and speak with one of our knowledgeable sales executives to request a nutraceutical manufacturing price quote and minimum order requirements for that formulation.
Q: How much does it cost to manufacture supplements?
The cost to manufacture supplements with differ depending upon your formulation. To understand more, contact Vitaquest at 800-526-9095 and speak with one of our knowledgeable sales executives to request a nutraceutical manufacturing price quote.
Q: How involved can a brand be in the formulation process with contract manufacturing?
With a contract manufacturer, you can be very involved in the product formulation process. You can choose whichever suitable nutraceutical ingredients you may wish to have in your product. Furthermore, you can choose any preferred branded ingredient according to your due diligence on quality, scientific, and consumer data—or you can stick with more generic versions or alternative ingredients. The point is that you have the choice.
Q: Is private labeling more cost-effective than contract manufacturing?
Private labeling has the advantage of fixed costs (although prices can still go up if raw materials prices increase), and lower minimum order quantities. However, this is offset by the fact that you’ll be purchasing the same product formulations used by dozens of other brands, so there is no meaningful way to differentiate your products.
Q: Can a brand switch from private label to custom contract manufacturing or vice versa?
Yes, a brand can switch from a generic private label to a custom contract manufactured product, or vice versa. However, be advised that an abrupt and radical departure from your original formulation may cause a temporary loss of sales since customers often find such changes off-putting. If your new custom product is truly “new and improved”, sales may very well grow to eclipse those of your original formula.
Q: What quality control measures are in place with contract manufacturing for supplements?
If a contract manufacturer is FDA cGMP-compliant, it assures brand owners and consumers alike that appropriate conformance with industry regulations and quality control standards are in place and being adhered to. Independent third-party certifications from organizations such as NSF, USP, and others give additional layers of quality assurance.
Q: How long does it typically take to launch a supplement with contract manufacturing?
Although lead times on initial orders vary from one company to the other, on average, the time it takes to manufacture a supplement formula for the first time is about 14-18 weeks from the date a P.O. is received. Subsequent orders generally take considerably less time to complete.
