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The research provides an analysis of outsourcing-related trends in vitamin and dietary supplements. Three trends reflect recent market momentum and factors driven by the COVID-19 global pandemic. They are expected to be the growth drivers of the nutraceutical market in the future.

1. Vitamin C and D Production Surges during COVID-19

  • Driven by the COVID-19 global pandemic, the outsourced manufacturing of vitamin products has seen a noticeable increase in the UK. Vitamin C and D supplements are perceived to boost people’s immune systems against the coronavirus. In contrast, sports facilities, such as gyms, have closed down, resulting in a decline in demand for sports nutritional products.
  • Health Innovations expands its production of high-dosage vitamin products, while Oxford Contract Manufacturing increases production in Vitamin C and has manufactured some vitamin products for the trials at National Health Service (NHS), aiding patients’ recovery from COVID-19.
  • A majority of companies in the space of contract manufacturing, packing, fulfillment and logistics expect the demand for immune-enhancing products, such as vitamins, minerals and supplements, to continue to climb post-COVID. This is because consumers have gained product knowledge and become more aware of personal health.

2. Outsourced Development and Manufacturing Continue to Grow

  • It is expected to see a rising trend of outsourcing activities associated with the development and manufacturing of vitamin and dietary supplements. This is driven by “the expertise, buying power and flexibility” of contract manufacturing organizations (CMOs), which allows nutraceutical brands to focus on product marketing and customization.
  • Fine Foods is a major contract development and manufacturing organization (CDMO) in the Italian nutraceutical and pharmaceutical markets; the revenue from vitamin and dietary supplements represented 76% of its total revenue in 2018, which is expected to grow at a CAGR of 4.9% between 2018 and 2023. This is driven by the growth of outsourced development and manufacturing business in Italy and Europe.
  • Based in Switzerland, Lonza Consumer Health & Nutrition manufactures liquid-fill products that complement those of nutraceutical brands or produces everything on behalf of the latter. This is due to Lonza’s specialized equipment and operational expertise that nutraceutical firms often do not have.

3. Product Customization Leads to Intensive Partnership

  • The new trend of requesting small batches of production enables nutraceutical brands to customize products for individual consumers. This is driven by consumers’ demand for natural, clean labelled and vegetarian products. For example, 54% of consumers in the US prefer dietary supplements made from natural sources.
  • Due to the evolving trend of consumer preference towards unique and market-leading products, companies in the vitamin and dietary supplements market have started to actively partner with each other and build competitive advantages by developing new products faster than others. For example, Lonza Consumer Health & Nutrition founded the Clean Label Alliance in 2018, which enabled manufacturers to deliver unique, science-based products.

Research Strategy

We reviewed a series of news and insightful articles for the vitamin and dietary supplements market. Trends are underpinned by both the merits of outsourcing business models and emerging factors, such as the changing needs of consumers.

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