John Brown, Vice President of Global Marketing, Selig03.01.21
In these worrying times, consumers are understandably more cautious than ever before about the products they purchase which are intended for human consumption. With the rise in popularity amongst consumers for vitamins, over the counter (OTC) healthcare remedies and nutraceuticals, the demand for appropriate packaging has also risen. In addition to easy-open and tamper-evident packaging, many consumers are now, for the first time, aware of the potential of introducing unwanted microbes when opening healthcare packaging. This article discusses the growth of the market, the demands being placed on packaging and the opportunities induction sealing offers to companies requiring more hygienic and secure packaging solutions.
A focus on health and wellbeing
It is no surprise that 2020 saw bio and pharma company research, development, and manufacturing teams focus on battling the pandemic. According to BioPlan Associates, the worldwide sales of biopharmaceuticals has now reached more than $300 billion, increasing at an annual rate of about 12%. This isn’t the only area that has seen growth as a result of the global pandemic. Not surprisingly, with immunity being placed in the spotlight, VMS (vitamins, minerals and supplements), OTC healthcare remedies and nutraceuticals have also been proving very popular.
A shift by consumers towards pre-emption and prevention is driving a growth in demand for vitamins, OTC healthcare remedies and nutraceuticals. It is a modern success story that shows no sign of slowing down. Immunity supplements have grown in demand and, as a result, VMS sales have soared. The vitamins market was valued at nearly $5 billion in 2017—and is projected to exceed $7 billion by 2023, says a report from Markets and Markets. The global market for nutraceuticals is also now estimated to be growing at more than 7% each year, according to a recent study from PMMI Business Intelligence. The report values the market at around $373 billion by 2025 and nearly $80 billion of this will be in the U.S. alone.
Although the desire for immunity, driven by the global pandemic, has propelled the growth of certain supplements during 2020, in the longer term, the entire supplements market is expected to benefit from this momentum. In fact, across Europe, Euromonitor predicts that both the OTC and VMS categories will be worth $130 billion in retail value sales by 2025. According to ReportLinker, the North America Over the Counter (OTC) Drugs Market is anticipated to grow with a CAGR of 2.7%, during 2020-2025. Yet, when combined with the dietary supplement market, growth is significantly increased. Another ReportLinker report shows that the combined North America OTC drug and dietary supplement market was valued at almost $133 billion in 2019 and is projected to reach more than $224 billion by 2027. This is a predicted +7% CAGR during 2020–2027.
As well as the desire for immunity driving sales of vitamins C and D and echinacea in the VMS sector during the pandemic, OTC weight loss and dietary products are also seeing high growth in North America. Research from the National Institutes of Health shows that up to 15% of Americans have tried weight loss pills. This is due to more consumers making the link between their health, what they eat and the rise in lifestyle-related diseases. With demand growing for this popular type of supplement, it’s no surprise the U.S. diet supplement market is worth $2.1 billion per year.
The impact of COVID-19 on CDMOs and CMOs
Alongside the rest of the industry, contract development and manufacturing organizations (CDMO) and contract manufacturing organizations (CMO) have been impacted by the pandemic. As a result, much that was taken for granted has had to be reassessed. This has included moving many of the workforce to homeworking, adopting new technologies to improve workflow and establishing different working practices to maintain production and keep laboratories running.
Capacity issues were high on the agenda in 2020 for CDMOs and CMOs alike, with shortages of active pharmaceutical ingredients (APIs) and intermediates causing production issues. The fact that the U.S. currently relies on China for 70% of its API ingredients’ supply, meant that the closure of a number of factories in China in the first quarter of 2020, left many impacted. As attention rightly turned to developing a vaccine, many pharmaceutical companies also diverted budgets and other resources to vaccine generation resulting in some products being put on hold or production runs being reduced. As well as capacity challenges, supply chain management was a major focus throughout 2020. Many companies had no choice but to stream-line operations, as well as source alternative key raw material suppliers to keep production sites up and running.
CMOs and CDMOs have had to become ever more flexible and creative in finding solutions to capacity and supply issues. Following the lessons learned from the pandemic, where reliability became more of an issue than the product’s price, supply chain resilience has now become a priority. As many companies look to onshore supply, or at least bring supply closer to home, CDMOs and CMOs have a key part to play in localizing OTC drug and VMS production. Demand for more local contract services means that companies are having to reconsider their ingredient supply partnerships. With issues such as profit-margin challenges and adequate supply in each target market still to be resolved, the need for flexible solutions has only just begun.
OTC and VMS packaging
As consumers drive demand for more VMS and specific OTC products, an area that is also getting increasing attention is the packaging that they come in. With the sustainability agenda on the increase, and ecommerce driving OTC medication and VMS sales, a lot more attention is being placed on the packaging of the containers.
In North America, most common consumer healthcare products, either in solid, liquid or powder form are packaged in rigid plastic packaging and only those that may be oxygen sensitive are found in glass or possibly metal containers. Despite the sustainability agenda, the plastic bottle segment is among the largest growing sectors according to Research and Markets. This is attributed to the fact that plastic is lightweight, cost-effective, easy to produce and simple to source for manufacturers. In addition, for brand owners, it provides excellent product protection and can be sealed for product security and integrity.
Plastic is also easy for consumers to use. Ease-of-use is an increasing focus for many packaging and product delivery solutions. Over recent years, consumer convenience has driven demand for On-the-Go packaging to satisfy impulse buys and the need for travel friendly and convenient storage—in the car, purse or pocket. Single Use products and Blister Packs that come in pre-measured dosages that can be administered quickly have also had a bearing on the materials used for packaging.
Packaging challenges
Packaging plays its part in the mix of challenges that CDMOs and CMOs are used to juggling throughout the development and manufacturing process of OTC products. Getting the packaging right is vital to not only meet FDA requirements, but to ensure that the product reaches consumers in peak condition.
Pharmaceutical packaging has been tightly regulated by the FDA for many years. All items have to comply with the FDAs current good manufacturing practices (cGMP) for their bottle, blister, pouch and strip lines. However, the FDA began phasing in cGMP regulations for dietary supplements in June 2008. CMOs are well used to handling pharmaceutical and other FDA approved packaging and ensuring compliance. A cause for concern in the industry at present is the maintenance of these standards across the board, particularly as the pandemic has resulted in FDA inspections falling. Based on FDA 483 inspection data for the fiscal year, between Oct. 1, 2019 and Sept. 30, 2020, the FDA conducted only 28 biologics plant inspections in 2020, compared with 116 the year before, and 349 drug facility inspections vs. 779 in 2019.
With the advent of the pandemic, the anti-microbial security of healthcare packaging has also become a concern for consumers, as they become aware of the potential of introducing un-wanted microbes when opening their healthcare packaging. There is growing demand from consumers for packaging that not only protects the contents but also remains safe during and after opening.
Thanks to the pandemic and subsequent hygiene fears, there has also been a big shift to digital purchasing; this has resulted in worldwide e-commerce sales reaching well over $4 trillion. The move to online shopping looks set to remain post-COVID-19. A recent survey by McKinsey & Company has shown that for U.S. consumers, OTC medicines, vitamins and supplements are some of the most popular categories for them to now purchase online. As a result of the pandemic, online purchasing of OTC medicines by US consumers has grown by +44% and vitamins and supplements by +27%.
With the growth in popularity of ecommerce, packaging for healthcare has increased, and plastic packaging has grown more than its fair share. Glass and metal packaging may be ideal for oxygen sensitive products, but most formulations are not sensitive enough to warrant the higher packaging costs or transportation costs of these heavier materials. This has led to many CDMOs and CMOs exploring a variety of plastic packaging solutions to identify the best way to deliver them in terms of robustness for transportation, security, cost effectiveness and peace-of-mind for consumers.
Working in partnership
To overcome the physical demands being placed on OTC and VMS packaging sold via e-commerce and as a response to the increased demand for hygienic openings and product security, Selig has been working with CDMOs and CMOs across the globe to show how the simple addition of induction heat sealing to the production line can solve these and many more issues.
The induction heat seal creates a very strong pressure and vacuum resistant sealed container, enabling it to be transported without spoilage, while preserving freshness, extending shelf-life and creating a tamper-evidence seal. In addition, due to the strength of the seal, less secondary packaging is required and the primary packaging can also be light-weighted, reducing environmental load and helping improve an end products’ sustainability credentials.
A new hygienic opening seal
Induction sealing of plastic or glass containers not only prevents oxygen or moisture ingress via the closure but, if the right seal is used, it can also offer consumers a more hygienic opening experience. Selig Group has been working with a range of customers, developing its easy open, TopTab 2 TamperSeal. Traditionally consumers open the seal of a container using a tool or finger to breach the seal. However, Selig’s TopTab 2 TamperSeal has been designed with hygienic opening as well as hermetic, tamper-proof sealing in mind. By opening the seal using the half-moon tab, it is less likely that pathogens or contaminants are introduced to the container when opened.
The TopTab 2 TamperSeal also offers an inexpensive way to thwart counterfeiters, by adding an inexpensive feature to the package which both distinguishes it from other packages on the market and also has a level of complexity in manufacturing that counterfeiters are unable to replicate. Selig has found that ensuring that containers are packaged correctly and deliver hygienic opening helps to give consumers peace-of-mind during these challenging times.
With vitamins, OTC healthcare remedies and nutraceuticals increasing in demand as a result of the pandemic and CDMOs and CMOs looking for flexible solutions to production challenges, now is the time to adopt simple, cost-effective yet hygienic packaging solutions. Thanks to recent innovations, manufacturers can build hygiene into every aspect of the packaging process, giving consumers peace-of-mind and security.
John Brown has been in the packaging industry for over 25 years, with focus on the Food, Beverage, Pharmaceutical, Personal Care, and Industrial Chemicals markets. He has been with Selig since August of 2010 with a prior role as Vice President of Business Development. Before joining Selig, John served for 11 years as the Business Development Manager of CSI (Closure Systems International). Prior to CSI, he served as Vice President, R&D of Courtaulds Packaging – Knight Engineering & Plastics (Berry Plastics). His broad exposure to different markets, technologies and disciplines within packaging allows for a unique perspective drawn from experiences throughout the supply chain.
A focus on health and wellbeing
It is no surprise that 2020 saw bio and pharma company research, development, and manufacturing teams focus on battling the pandemic. According to BioPlan Associates, the worldwide sales of biopharmaceuticals has now reached more than $300 billion, increasing at an annual rate of about 12%. This isn’t the only area that has seen growth as a result of the global pandemic. Not surprisingly, with immunity being placed in the spotlight, VMS (vitamins, minerals and supplements), OTC healthcare remedies and nutraceuticals have also been proving very popular.
A shift by consumers towards pre-emption and prevention is driving a growth in demand for vitamins, OTC healthcare remedies and nutraceuticals. It is a modern success story that shows no sign of slowing down. Immunity supplements have grown in demand and, as a result, VMS sales have soared. The vitamins market was valued at nearly $5 billion in 2017—and is projected to exceed $7 billion by 2023, says a report from Markets and Markets. The global market for nutraceuticals is also now estimated to be growing at more than 7% each year, according to a recent study from PMMI Business Intelligence. The report values the market at around $373 billion by 2025 and nearly $80 billion of this will be in the U.S. alone.
Although the desire for immunity, driven by the global pandemic, has propelled the growth of certain supplements during 2020, in the longer term, the entire supplements market is expected to benefit from this momentum. In fact, across Europe, Euromonitor predicts that both the OTC and VMS categories will be worth $130 billion in retail value sales by 2025. According to ReportLinker, the North America Over the Counter (OTC) Drugs Market is anticipated to grow with a CAGR of 2.7%, during 2020-2025. Yet, when combined with the dietary supplement market, growth is significantly increased. Another ReportLinker report shows that the combined North America OTC drug and dietary supplement market was valued at almost $133 billion in 2019 and is projected to reach more than $224 billion by 2027. This is a predicted +7% CAGR during 2020–2027.
As well as the desire for immunity driving sales of vitamins C and D and echinacea in the VMS sector during the pandemic, OTC weight loss and dietary products are also seeing high growth in North America. Research from the National Institutes of Health shows that up to 15% of Americans have tried weight loss pills. This is due to more consumers making the link between their health, what they eat and the rise in lifestyle-related diseases. With demand growing for this popular type of supplement, it’s no surprise the U.S. diet supplement market is worth $2.1 billion per year.
The impact of COVID-19 on CDMOs and CMOs
Alongside the rest of the industry, contract development and manufacturing organizations (CDMO) and contract manufacturing organizations (CMO) have been impacted by the pandemic. As a result, much that was taken for granted has had to be reassessed. This has included moving many of the workforce to homeworking, adopting new technologies to improve workflow and establishing different working practices to maintain production and keep laboratories running.
Capacity issues were high on the agenda in 2020 for CDMOs and CMOs alike, with shortages of active pharmaceutical ingredients (APIs) and intermediates causing production issues. The fact that the U.S. currently relies on China for 70% of its API ingredients’ supply, meant that the closure of a number of factories in China in the first quarter of 2020, left many impacted. As attention rightly turned to developing a vaccine, many pharmaceutical companies also diverted budgets and other resources to vaccine generation resulting in some products being put on hold or production runs being reduced. As well as capacity challenges, supply chain management was a major focus throughout 2020. Many companies had no choice but to stream-line operations, as well as source alternative key raw material suppliers to keep production sites up and running.
CMOs and CDMOs have had to become ever more flexible and creative in finding solutions to capacity and supply issues. Following the lessons learned from the pandemic, where reliability became more of an issue than the product’s price, supply chain resilience has now become a priority. As many companies look to onshore supply, or at least bring supply closer to home, CDMOs and CMOs have a key part to play in localizing OTC drug and VMS production. Demand for more local contract services means that companies are having to reconsider their ingredient supply partnerships. With issues such as profit-margin challenges and adequate supply in each target market still to be resolved, the need for flexible solutions has only just begun.
OTC and VMS packaging
As consumers drive demand for more VMS and specific OTC products, an area that is also getting increasing attention is the packaging that they come in. With the sustainability agenda on the increase, and ecommerce driving OTC medication and VMS sales, a lot more attention is being placed on the packaging of the containers.
In North America, most common consumer healthcare products, either in solid, liquid or powder form are packaged in rigid plastic packaging and only those that may be oxygen sensitive are found in glass or possibly metal containers. Despite the sustainability agenda, the plastic bottle segment is among the largest growing sectors according to Research and Markets. This is attributed to the fact that plastic is lightweight, cost-effective, easy to produce and simple to source for manufacturers. In addition, for brand owners, it provides excellent product protection and can be sealed for product security and integrity.
Plastic is also easy for consumers to use. Ease-of-use is an increasing focus for many packaging and product delivery solutions. Over recent years, consumer convenience has driven demand for On-the-Go packaging to satisfy impulse buys and the need for travel friendly and convenient storage—in the car, purse or pocket. Single Use products and Blister Packs that come in pre-measured dosages that can be administered quickly have also had a bearing on the materials used for packaging.
Packaging challenges
Packaging plays its part in the mix of challenges that CDMOs and CMOs are used to juggling throughout the development and manufacturing process of OTC products. Getting the packaging right is vital to not only meet FDA requirements, but to ensure that the product reaches consumers in peak condition.
Pharmaceutical packaging has been tightly regulated by the FDA for many years. All items have to comply with the FDAs current good manufacturing practices (cGMP) for their bottle, blister, pouch and strip lines. However, the FDA began phasing in cGMP regulations for dietary supplements in June 2008. CMOs are well used to handling pharmaceutical and other FDA approved packaging and ensuring compliance. A cause for concern in the industry at present is the maintenance of these standards across the board, particularly as the pandemic has resulted in FDA inspections falling. Based on FDA 483 inspection data for the fiscal year, between Oct. 1, 2019 and Sept. 30, 2020, the FDA conducted only 28 biologics plant inspections in 2020, compared with 116 the year before, and 349 drug facility inspections vs. 779 in 2019.
With the advent of the pandemic, the anti-microbial security of healthcare packaging has also become a concern for consumers, as they become aware of the potential of introducing un-wanted microbes when opening their healthcare packaging. There is growing demand from consumers for packaging that not only protects the contents but also remains safe during and after opening.
Thanks to the pandemic and subsequent hygiene fears, there has also been a big shift to digital purchasing; this has resulted in worldwide e-commerce sales reaching well over $4 trillion. The move to online shopping looks set to remain post-COVID-19. A recent survey by McKinsey & Company has shown that for U.S. consumers, OTC medicines, vitamins and supplements are some of the most popular categories for them to now purchase online. As a result of the pandemic, online purchasing of OTC medicines by US consumers has grown by +44% and vitamins and supplements by +27%.
With the growth in popularity of ecommerce, packaging for healthcare has increased, and plastic packaging has grown more than its fair share. Glass and metal packaging may be ideal for oxygen sensitive products, but most formulations are not sensitive enough to warrant the higher packaging costs or transportation costs of these heavier materials. This has led to many CDMOs and CMOs exploring a variety of plastic packaging solutions to identify the best way to deliver them in terms of robustness for transportation, security, cost effectiveness and peace-of-mind for consumers.
Working in partnership
To overcome the physical demands being placed on OTC and VMS packaging sold via e-commerce and as a response to the increased demand for hygienic openings and product security, Selig has been working with CDMOs and CMOs across the globe to show how the simple addition of induction heat sealing to the production line can solve these and many more issues.
The induction heat seal creates a very strong pressure and vacuum resistant sealed container, enabling it to be transported without spoilage, while preserving freshness, extending shelf-life and creating a tamper-evidence seal. In addition, due to the strength of the seal, less secondary packaging is required and the primary packaging can also be light-weighted, reducing environmental load and helping improve an end products’ sustainability credentials.
A new hygienic opening seal
Induction sealing of plastic or glass containers not only prevents oxygen or moisture ingress via the closure but, if the right seal is used, it can also offer consumers a more hygienic opening experience. Selig Group has been working with a range of customers, developing its easy open, TopTab 2 TamperSeal. Traditionally consumers open the seal of a container using a tool or finger to breach the seal. However, Selig’s TopTab 2 TamperSeal has been designed with hygienic opening as well as hermetic, tamper-proof sealing in mind. By opening the seal using the half-moon tab, it is less likely that pathogens or contaminants are introduced to the container when opened.
The TopTab 2 TamperSeal also offers an inexpensive way to thwart counterfeiters, by adding an inexpensive feature to the package which both distinguishes it from other packages on the market and also has a level of complexity in manufacturing that counterfeiters are unable to replicate. Selig has found that ensuring that containers are packaged correctly and deliver hygienic opening helps to give consumers peace-of-mind during these challenging times.
With vitamins, OTC healthcare remedies and nutraceuticals increasing in demand as a result of the pandemic and CDMOs and CMOs looking for flexible solutions to production challenges, now is the time to adopt simple, cost-effective yet hygienic packaging solutions. Thanks to recent innovations, manufacturers can build hygiene into every aspect of the packaging process, giving consumers peace-of-mind and security.
John Brown has been in the packaging industry for over 25 years, with focus on the Food, Beverage, Pharmaceutical, Personal Care, and Industrial Chemicals markets. He has been with Selig since August of 2010 with a prior role as Vice President of Business Development. Before joining Selig, John served for 11 years as the Business Development Manager of CSI (Closure Systems International). Prior to CSI, he served as Vice President, R&D of Courtaulds Packaging – Knight Engineering & Plastics (Berry Plastics). His broad exposure to different markets, technologies and disciplines within packaging allows for a unique perspective drawn from experiences throughout the supply chain.
