Why is Gelatin Vertical Integration Important?
Picture this: You’ve successfully launched your nutraceutical or pharmaceutical product into the market. Production and distribution are going smoothly…demand is high…you’ve even got a backlog of orders. Then the unthinkable happens. Your overseas capsule supplier informs you that due to an unexpected geopolitical situation, they will not be able to fulfill the large order for gelatin capsules that they accepted last week.
So you reach out to a gelatin capsules manufacturer located in your hemisphere—and learn that although they’re located here, their raw materials supply is not. The same geopolitical situation is affecting their ability to source the raw gelatin needed to make their gelatin capsules. Not surprisingly, they’re putting long-standing customers at the front of the line for the two-piece capsules that they are able to produce.
All of this means that your supply of gelatin capsules will soon run out and your production will come to a screeching halt.
Sound far-fetched? It’s not. This is exactly the type of supply chain challenges that many manufacturers faced when the COVID-19 pandemic hit. While many buyers have always recognized that there are risks associated with relying on overseas suppliers, many failed to consider the impact that trade wars, political upheaval, lax quality control standards and global pandemics could have on their “local” supplier’s ability to source the raw ingredients they need.
What’s the solution?
There are many things to consider when choosing a gelatin capsules supplier. Does their product have the appropriate third-party certifications? Does the cost fit your budget? Does the quality meet your standards? What are their lead times? Can they provide next-day delivery of off-the-shelf products? Do they provide technical support? Do they offer the ability to customize your capsule in terms of colors, sizes, printing and more? Can they provide stability testing?
Perhaps most importantly, though, you need to look at whether or not a gelatin capsules supplier has the ability to ensure that they will be able to provide the long-term, reliable supply that you need. After all, cost, quality, technical support and other factors are irrelevant if the company’s inability to fulfill orders is shutting down your production line!
For gelatin capsules, the solution to the “reliable supply” issue is gelatin vertical integration. As an added bonus, vertical integration addresses cost and quality issues as well.
What does gelatin vertical integration mean for you?
Gelatin is an animal product, made from collagen derived from the bones and connective tissues of cows and pigs. Used to make both hard and soft capsules, gelatin is a key ingredient in pharmaceutical and nutraceutical manufacturing. Beyond that, gelatin is also used in a variety of food and cosmetic products. Even without event-driven supply chain shocks, growing demand in all of these areas has been straining gelatin supply for a number of years.
Gelatin vertical integration means that your gelatin capsules supplier owns its entire gelatin supply chain, starting with the raw materials (i.e., the raw gelatin). In other words, they produce their own gelatin, so their ability to obtain the gelatin they need to make capsules is not impacted by trade wars, political upheaval, etc.
G-CAPS® gelatin capsules, for example, are made in North America by a company that has complete vertical integration of its gelatin supply. This means that brands that choose G-CAPS® enjoy a reliable, uninterrupted long-term supply of superior-quality gelatin capsules, with complete traceability of the capsule ingredients.
Vertical integration also refers to the finished product
Owning its source of raw materials gives a vertically-integrated capsule manufacturer a safe and dependable source of gelatin. In addition, a company with complete vertical integration also controls its production, warehousing, customer service and technical service. It’s a huge benefit if your capsule supplier has the capability of providing you with formulation and regulatory assistance as well.
Don’t underestimate the importance of your capsule supplier
Because your gelatin capsules supplier is a fundamental partner that can either support or impede your company’s success, choosing a supplier is both a practical and strategic decision. A supplier that has gelatin vertical integration has control over their capsule’s cost and quality, as well as the reliability of their ongoing supply. All of this, in turn, can give you a significant strategic advantage in your marketplace.
