Historically, the relationship between the Brand Owner and the CMO (Contract Manufacturing Organization) was very transactional – place an
order, get a product. With the recent push for science in this industry, some CMOs can now even provide formulation assistance to their brand partners, However, the future of this industry will hinge on the growth of CDMO’s (Contract Development and Development Organizations)– organizations that partner to both develop and manufacture products with the Brand Owner partners. In a format borrowed from the pharmaceutical industry, the rise of the CDMO has become dominant innovation driver in our industry – helping align ideation with product development and engineering requirements.
With the advent of more rigorous manufacturing and testing standards for industry, the Brand Owner and manufacturer of the product are more intertwined than ever before. The Brand Owner now has additional burdens in the development process such as ingredient substantiation, sustainable sourcing, and trend analysis becoming pre-requisites of any product launch. It is no coincidence that these factors along with potential liabilities are driving the dietary supplement industry to the CDMO relationship model.
With CDMO’s, the process of graduating a product from concept to the consumer good is something which begins on the ground floor. This foundational work of understanding the science and marketing strategy of the Brand Owner around the concept helps establish a full vetting of the supply chain, measuring the robustness of the substantiation and regulatory challenges, and market resiliency of the item. While a time-consuming task, this effort ensures the ideation of the dietary supplement fits within the realities of the ingredients and dosage forms – allowing the Brand Owner to move forward with confidence.
Ultimately, this process may call for sourcing custom ingredients, deeper dives into the science and related substantiation, extended packaging considerations, as well as testing method development for the product. All of these key responsibilities and requirements are necessary elements supported by the integration of the Brand Owner with the “D” -the development and evolution of a product concept into a market-ready item.
There is no doubt that some in our industry will be resistant to this model, since the transactional nature of the traditional Brand Owner/ CMO relationship allows for barriers into each other’s “secrets.” However, Brand Owners that recognize the inherent value of a relationship with a CDMO, and the ability of quality-driven CDMO’s to deliver results, will be rewarded.
The future of the dietary supplement industry will be powered by the innovation and development of product concepts generally unknown to the marketplace of today. Successful Brand Owners partnering with CDMO’s will undoubtedly appreciate the value in this evolutionary, vertical partnership – which has worked very well in related fields for years. Just like the idea of “transparency” has changed our industry over time and allowed early adopters to prosper, so too will those Brand Owners which recognize the value proposition and multiplier offered by the CDMO/Brand Owner relationship.
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