Outsourcing partners continue to deliver for the nutraceutical industry

Published: 20-May-2021

The last 18 months have seen challenges and opportunities in equal measure for the functional food and dietary supplement sector. Rodney Steel, Chief Executive of the BCMPA (the Association for Contract Manufacturing, Packing, Fulfilment and Logistics), explains how the resilience and flexibility of outsourcing companies have played a key role in supporting nutraceutical brands as they navigate this changing landscape

The combined effects of Brexit and the COVID-19 pandemic have thrown challenge after challenge in the path of manufacturers, brands and retailers in many different industries … and the nutraceutical sector is no exception.

Nevertheless, change brings opportunity and this has certainly been the case for nutraceuticals, as evidenced by the global growth rate of almost 9% per annum by 2024 that has been predicted by market research firm Technavio.1

Growing healthcare awareness

Even before the pandemic, health products were growing in popularity, fuelled by numerous campaigns emphasising the importance of diet and well-being. This has driven a huge demand for supplements and vitamins during the crisis, particularly vitamin D, nootropics and liposomal vitamin products.

Public interest in supplements has been further endorsed by the recent government-backed campaign to deliver supplies of vitamin D3 to more than 460,000 clinically extremely vulnerable (CEV) patients, a project successfully undertaken by BCMPA member The Oxford Health Company.

Director James Allan reports a doubling of business in both white and private label work on the back of this COVID-19 demand, with existing brands broadening their ranges and new entrants looking to service niche markets. Underlining these developments has been data from Kantar that points to nearly half of UK households (48.4%) now buying a vitamin product.2

“During the pandemic, we have seen a significant increase in penetration across the vitamin category, notably in multivitamins, as consumers look for products that support their health,” confirms Lee Hodgess, Customer Development Director of healthcare and wellness product manufacturer, Ernest Jackson & Co.

Rodney Steel

Rodney Steel

Mahesh Darji, Head of Business Development at outsource service provider, Central Pharma, agrees, particularly regardingthe growth in demand for vitamin D: “With people staying indoors more than usual during lockdown periods, the awareness of taking vitamins to supplement our lifestyle has grown, with vitamin D being one of the more popular products.”

Letterboxes: opening the door to new business

COVID-19 didn’t just increase demand for well-being supplements, it also affected our buying habits; with many working from home and the traditional retail landscape severely depleted by the closure of non-essential shops, the requirement for these goods to be delivered direct to our doorsteps rose exponentially in a matter of months.

Virtually overnight, home delivery became the single most popular way of purchasing nutraceuticals and all our other needs.

Honiton-based Rain Nutrience, for which e-commerce and fulfilment services already comprised a significant part of its business, saw a dramatic increase from both new and existing clients requiring an end-to-end service, including delivery direct to consumers.

Managing Director, Kyle Dunbar, says: “We have seen a 70% year-on-year growth in sales, with more than a third coming from new customers seeking to broaden their offering to home delivery.”

Demand for personalised nutraceuticals has also grown significantly. Brands have maximised the opportunities presented by e-commerce to tailor vitamins to a consumer’s specific requirements and deliver them straight to their front door.

Packaging has played a key role in meeting these e-commerce requirements, with the introduction of letterbox-friendly packs that not only provide an efficient and flexible method to send out products, but are also sustainable and able to be personalised when necessary.

“We made the decision to increase our production capacity by investing in an additional three fully automated blister packing lines that were especially suited to pack smaller sized vitamin tablets,” says Darji.

Outsourcing partners continue to deliver for the nutraceutical industry

Specialist contract packers, Unette Group, has also experienced a threefold increase in demand for its convenient and lightweight “Tear Top” tubes that are ideal for e-commerce. “Our unique customisable packaging is a perfect product for postable items and we expect a continuation of growth in demand across the contract packaging industry for similar solutions,” reports Managing Director, David Rimmer.

The Oxford Health Company has similarly seen an increased focus on this type of packaging, which also satisfies cost reduction requirements. “We have specialised in flat stand-up letterbox-friendly pouches for more than 8 years,” Allen explains. “These have been very beneficial in winning recent business and providing a cost-effective postage solution to customers.”

Importance of end-to-end services

With transport, logistics and physical travel of any kind all being constrained by lockdown restrictions, many in the outsourcing sector have seen a marked growth in interest for complete end-to-end services.

From filling and packing of goods to storage, fulfilment and distribution, the ability of outsourcing companies to offer a more efficient and economical alternative to “double-handling” has been met with enthusiasm by clients.

“We have extended production and commissioned new equipment,” says Darji. “This expansion of capacity and the extension of shift patterns have minimised and, in the majority of instances, even eliminated delays in output for our clients.”

The complete service offer has also been important when meeting the requirements of the new breed of entrepreneurs and starts-ups, whose niche and specialised products are feeding the continuing expansion of the nutraceutical industry. BCMPA members and the outsourcing sector can provide high levels of scalability in production to meet the needs of these new market entrants and support their growth.

“We view start-ups as the lifeblood of new product development and opportunity for our business,” confirms Dunbar: “But, within this, we also have to work with clients to ensure they have the correct proposition and are likely to succeed when launching a new brand.”

Overcoming changes after Brexit

The impact of the pandemic on global supply chains has been well documented. For UK companies, there has been the added challenge of dealing with the requirements of the Brexit agreement.

This is another area in which BCMPA members have been able to provide invaluable support to their customers by ensuring that they are fully up to date with the relevant requirements and, through this, able to minimise the negative effects of increased paperwork and compromised supply chain availability.

Outsourcing partners continue to deliver for the nutraceutical industry

“We prepared for the end of the transition period for some time,” says Hodgess of Ernest Jackson & Co. “This has meant changes to a significant amount of artwork, as well as additional paperwork for products going to the EU, but the ongoing impact is small for our business.”

In many cases, it is the longstanding relationships of members’ export teams and their regular liaisons with EU suppliers that have ensured that the new regulations have had minimal impact on production or delivery timings.

And, despite the initial impact of Brexit on trade in the early months, there is already evidence of a “bounce-back” effect, with an increase in enquiries from European manufacturers looking to relocate their production to the UK.

Allen is also positive: “Although there may currently be a legislative advantage in some cases for clients to use Europe-based fulfilment houses, the growth in interest from many of them to recentre their operation in the UK gives us significant cause for optimism.”

Continued opportunity

With all the uncertainty that COVID has delivered during the last 18 months, very little can be taken for granted going forward. However, there is unanimous agreement among BCMPA members that the increased demand for nutraceuticals is highly unlikely to diminish.

The importance of maintaining enhanced levels of general good health and a robust immune system now seem firmly entrenched in the public psyche. Continuous reinforcement by government bodies and health experts will only serve to establish vitamin supplementation as standard practice for the nation.

Brand owners are listening to their consumer base and responding to their needs, including the development of product formulations with ethically sourced ingredients, sustainable packaging and e-commerce fulfilment.

“Going forward, we can only see the growth in nutraceutical products and e-commerce continuing as health-conscious consumers are encouraged through social media to protect and enhance their health,” believes Rimmer.

And although no industry can ever be complacent, nutraceuticals would appear to have a bright future as demand continues to grow for the vitamins and supplements that enhance our well-being in a post-COVID, post-Brexit world.

Certainly, this has been indicated by the high level of enquiries for these types of products and services that have been generated by the BCMPA website in recent months. It would seem that the outsourcing sector is ideally placed to help companies to make the most of the opportunities presented.


  1. www.businesswire.com/news/home/20200929005814/en/Nutraceuticals-Market-Demand-For-Nutraceuticals-with-Medical-Benefits-to-Boost-the-Market-Growth-Technavio.
  2. Kantar Worldpanel, Total VMS, GB (27 December 2020): www.kantarworldpanel.com.

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