The broader nutrition industry (CHF 590 billion retail selling price)1 continues to grow with segments such as joint health, sports nutrition and digestive health forecast to grow at 7-9% (CAGR 2019–2024)1. The nutritional capsules market, however, is expected to grow in line with the overall capsules market of moderate GDP+ growth. More consumers are proactively looking to protect their health, improve their wellbeing, and live longer, healthier lives. With today’s busy lifestyle, consumers are seeking convenient methods of getting nutrients through supplements and functional foods.
Consumers are also looking for greater transparency in the products they buy. They also want to understand how a product was made and where it came from. Trusted products offering clean-label, natural, non-genetically modified organism (GMO), plant-based credentials and information on ingredient sourcing and processing, are of great consumer interest. In addition, the convergence of the food and pharma market continues with an increasing range of supplements, functional foods, and nutraceuticals to promote and expand healthspan.
We offer specialty ingredients, formulation know-how and inventive oral delivery solutions backed by industry-leading service capabilities and global regulatory expertise to help our customers take their innovative and differentiated nutritional products to market in the shortest time possible. Now fully incorporated into Lonza, the former Capsugel business serves pharma, over-the-counter (OTC), and nutrition customers with gelatin and specialty polymer hard capsules as well as fully formulated specialized finished dosage forms.
We strive towards fully integrated solutions, from initial concept to ready-to-market product commercialization. In addition to our broad capsule range, we offer a select portfolio of high-quality nutritional ingredients across joint health, active nutrition, digestive and immune health, weight management, sports activities, and pet nutrition.
Our customers benefit from our rich consumer market insights and long-standing expertise in pharmaceutical delivery science, which has enabled us to develop a comprehensive range of proprietary dosage forms and delivery technologies. These include targeted delivery, liquid-filled hard capsules, soft gels, capsule-in-a-capsule or tablet-in-a-capsule solutions and lipid multi-particulates.
The innovative capsules in our portfolio enable customers to improve the bioavailability, targeted delivery, swallowability, scent and taste masking of their nutritionals. Consumer experience is enhanced, while product owners enjoy the benefits of superior brand differentiation.
Our Global Footprint
We serve customers in more than 100 countries around the world thanks to a state-of-art network of 11 production and R&D sites across three continents. In addition to the manufacturing sites we share with the pharma hard capsules business in Greenwood, SC (USA), Bornem (BE), Colmar (FR), Sagamihara (JP), Suzhou (CN), Jakarta (ID), and Haryana (IN), we also have a Capsugel® capsule manufacturing site in Puebla (MX).
On the nutritional ingredients side, our UC-II® Undenatured Type II Collagen (joint health) is primarily manufactured in Fort Smith, AR (USA), and will be supplemented by Greenwood, SC (USA). We produce our Carnipure® L-carnitine for human nutrition, and CarniKing® for pet nutrition in Nansha (CN), an FSSC 22000 certified plant. In addition, our ResistAid®, an arabinogalactan uniquely sourced from local larch trees to support immune health, is produced in Cohasset, MN (USA).
We created additional capacity within the existing footprint in 2019, with plans to further expand our Greenwood, SC (USA) facility in mid-2020. This integrated facility will offer capsule manufacturing, ingredient production, and finished dosage forms at the same site.
Highlights and Initiatives 2019
The nutritional hard capsules business was negatively impacted by increased competition. This was exacerbated by softer demand for conventional gelatin hard capsules and slower growth than anticipated in specialty polymer empty capsules, particularly in mature markets. The business started to implement commercial countermeasures with first impact in Q4 2019. The nutritional ingredients business experienced softer performance, mainly related to supply issues.
In 2019, we have helped several customers launch new products or reformulate existing ones by combining innovative nutritional ingredients, optimizing formulations and tailoring capsule delivery technologies. Overall, we see solid growth opportunities for nutritional capsules, as well as combined ingredient and capsule offerings.
Nutritional Hard Capsules
Following the launch of the industry’s first clean-label and food-colored capsules in 2018, we have continued to bring new consumer-driven capsule innovations to the market in 2019.
For instance, we introduced Vcaps® Plus White OpalTM capsules, our first commercially available titanium dioxide-free semi-opaque (TiO2) capsules designed to address the changing regulatory environment alongside a growing demand for opaque capsules in Europe. Solutions in our wider plant-based range also include our innovative dosage forms, such as vegetarian Plantcaps® capsules.
Our vegetarian Vcaps® Plus capsules can now also be tinted using natural coloring foodstuffs to achieve a vibrant color that offers outstanding brand differentiation without compromising on a clean-label positioning. To date, Red Radish, Spicy Yellow, Blue Spirulina and Purple Carrot Vcaps® Plus capsule colors have been launched in Europe. Purple Carrot capsules were successfully launched in the United States, while Blue Spirulina capsules are also available in Canada.
Our premium, science-backed UC-II® ingredient for joint health successfully entered new markets, regions and applications in 2019. We introduced different innovation concepts for joint health, featuring UC-II® undenatured type II collagen in combination with other trending ingredients combination. Examples include vitamin K2, which was delivered in a Licaps® liquid-filled hard capsules to offer an all-in-one bone-and-joint health solution. We also expanded the applications for our UC-II® ingredient in pet nutrition, with a focus on supporting pet health and well-being.
Putting the spotlight on our performance nutrition expertise, we launched a new sports nutrition ingredient, OceanixTM marine phytoplankton, based on highly active antioxidant enzymes. This unique ingredient is sustainably sourced from the ocean and meets the rising demand for natural, non-GMO, and vegan supplement products, bringing together sports performance and wellness benefits.
The Carnipure® L-Carnitine ingredient for sports nutrition also became a key component of our newly launched MuscleGuardTM formulation, a vegan solution for optimizing gains in muscle mass and strength. The MuscleGuardTM formula brings together our Carnipure® L-Carnitine ingredient, Creatine and Leucine with vitamin D in a proprietary ratio that was demonstrated by a clinical study1 to deliver a 63% increase in muscle strength, mass and activity in older people.