LICAPS BUSINESS KIT

How do I attract
new consumers to
my market space?
 WHAT IS THE PURPOSE OF THIS KIT?
The purpose of this kit is to help you succeed in the supplement business. If you have a new brand

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or an idea for a brand extension, this kit is for you. Or if you are looking for ways to improve your product portfolio, espe-
cially with liquid-filled capsules, then this kit is for you as well.

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Today’s consumer wants liquids.

You’ve heard about Licaps® liquid capsules and

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want to know more about how developing your new

product in this dosage form will benefit your brand.

Capsugel, through its exciting new Licaps liquid capsule

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products, has been able to help a variety of brand owners

reenergize and revolutionize their dietary

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supplement line. Licaps liquid capsules are two-piece

hard gelatin or plant-based capsules that are filled with

liquid and sealed with a proprietary sealing process

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to protect the formulation and improve stability.

Consumers benefit from the combination of

improved bioavailability of liquids and the

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convenience of portable, easy-to-swallow capsules

that emit no unpleasant taste or odor.

Capsugel has many years of experience and has built an impressive, talented
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team of production specialists and marketing experts who can give you new

ideas and ways of taking your supplement brand to a higher level. At any time
while reviewing this information you want to get in touch with us, call

888-783-6361 or visit www.licaps.com.

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 HOW DO I USE IT?
This workbook is built around nine of the more significant topics that can impact your business. Some might be new to you.

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Some you may have already covered. Use this kit to supplement your planning strategy.

WHAT IS THE MARKET POTENTIAL?

This section outlines the total supplements market and gives

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you tips on how to size up the market potential for your brand.

WHAT PRODUCTS CAN (AND SHOULD) I OFFER?

This section looks at alternative product offerings

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and how to make choices among those alternatives.

WHAT DO I NEED TO KNOW ABOUT REGULATORY COMPLIANCE?

This section explains all the different sources of regulatory control and lists

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the leading resources on how to develop a successful strategy for compliance.

HOW DO I DEVELOP A WINNING FORMULATION IN LIQUIDS?

This section explores the choices and decisions you’ll face in

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choosing the best formulations for the products under your brand.

CAN I IMPROVE MY ROI THROUGH PRODUCT DESIGN?

This section delves into the power of product design and how

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it influences consumer choices.

WHAT ARE MY PACKAGING OPTIONS?

This section shows how creative and strategic

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you can be through your packaging design strategy.

WHAT MUST I DO ABOUT LABELING?

This section outlines the role labeling can play in both

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regulatory compliance and additional marketing opportunities.

WHAT IS THE BEST WAY TO TAKE MY PRODUCT TO MARKET?

This section explores the different ways you can go to market

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with a new product and gives you tips on how to choose wisely.

HOW SOON CAN I GO TO MARKET WITH MY NEW PRODUCT?

This section gives you a road map on the steps of getting a product from the
idea stage to the selling stage and how to best manage that process for success.

As you work your way through the information, tips and resources outlined in this kit, Capsugel is eager to help.
Don’t hesitate to engage our experts with questions about any one of these supplement-related topics.
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WHAT IS THE MARKET POTENTIAL?
One of the most fundamental questions in entering any new market is, “What is the market potential?”
It is important for you to get a good feel for the supplement market potential before you jump in.
This U.S.-specific general overview will not be enough, but will serve as a great starting point.

1.1. What is the size of the market?

According to the Nutrition Business Journal, consumer sales for the entire nutrition industry in
the U.S. climbed to over $196 billion in 2016. Of that, over $41.1 billion was in the supplement
category alone. The nutrition industry has performed well, even in difficult economic times.

The forecast for the entire nutritional industry shows steady annual growth
between 25–35% over the next 5 years. Supplements are expected to grow even faster than the overall
industry, making it an exciting market opportunity.

US Nutrition Overview by Channel

U.S.
Practitioner Internet
U.S. Nutrition Overview by Channel

3%
Multi-Level/Network 3%
5%
Natural and Specialty
Mail Order, DRTV, Radio
29%
2%

Still, 87% of the supplements sold in the U.S. are being sold
through retail, whether through specialty retailers or mass
merchandisers. The Internet is present, but not carrying as
much volume as other retail segments in the U.S. economy.

Mass Market
58%

1.2. What are the growing market segments?

Overall, nutritional supplements have been growing.
Several segments are experiencing more rapid growth including:
• Sports Nutrition
• Nutrition & Wellness
• Nutri-Cosmetics (Beauty from Within)
• Companion Animal/Pet Health
• Over-the-Counter

Specialty supplements (such as omega-3s, probiotics, glucosamine and

chondroitin among others) are showing some of the most aggressive growth
in all supplement products.

Much of the growth has been triggered by new product innovations, reports on
clinical trials and a consumer trend toward preventive health measures. These
trends are expected to continue. Brands that are offering true innovation to the
market will continue to do even better and gain higher levels of market share.
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 28%
Importance
36%
Easy-to-swallow

6%
1.3.get
Doesn’t What
stuckare consumers looking for?
in throat
8% focus on a range of dosage forms as well as brands, ingredients and
19%consumers
Today’s
Works quickly
product claims. Knowledge of consumer preferences will be a strategic weapon for brands
that want to succeed in the supplement market. It is easy for supplement brands to “get
No bad aftertaste
Retail, Specialty
stuck” in a MLM
single way to makeMail Orderwhile consumer tastes and expectations are
products
Retail, Mass Merch Practitioner Internet
rapidly changing as product innovation increases. The ability of brands to act and react
Works quickest
to changing consumer preferences will determine their level of long-term financial suc-
Gentle on stomach cess. There are a variety of dosage forms available in the supplement market, including
capsules, tablets, softgels and chewables. Based on consumer research conducted in 2008,
0% consumers
20% have indicated
40% 60%the following
that 80% dosage form attributes were most important
to them:

Importance

Easy-to-swallow
Number of Wholesale Percentage
U.S. Supplement Companies, 2008 Supplement Sales
Companies of Market
($ millions) Interestingly, “cheapest price”
Doesn’t get stuck in throat
Greater than $100M 28 5,970 40%
does not even appear in the list
Works quickly
$20M-$100M 80 3,058 20%
of the top six most important
Less than $20M 646 1,652 11%
attributes. In fact, it was one of
No bad aftertaste
Supplement Manufacturers/Marketers 754 10,680 71%
the lowest ranking attributes with
Multilevel Wholesale Value 2,593 17%
Works quickest only 25% of the respondents
Private/Store Label Wholesale Value 1,773 12%

mentioning it as important. Of the

Gentle onWholesale
Total stomach Supplement Value 15,096 100%

Consumer Sales 25,210 product attributes named as most

0% 20% 40% 60% 80%
important, Capsugel Licaps® liquid

capsules consistently outperformed

tablets and chewables.

Top-Tier Importance
Licaps® Capsules vs. Tablet, Chewable and Caplet
Wholesale
Number of Percentage
U.S. Supplement Companies, 2008 Supplement Sales
Companies of Market
($ millions)

77% Greater
72% than $100M 67% 62% 28
62% 5,970
61% 40%
Important %

$20M-$100M 80 3,058 20%

Less than $20M 646 1,652 11%

Supplement Manufacturers/Marketers 754 10,680 71%

Multilevel Wholesale Value 2,593 17%

Is generally Doesn’t get Works quickly Works the Leaves no Is easy to
easy to Private/Store
stuck in yourLabel Wholesale Valuequickest out 1,773 even
bad aftertaste swallow 12%
swallow throat of all other for people
Total Wholesale Supplement Value forms 15,096
who have 100%
difficulty
Consumer Sales 25,210
swallowing

Caplet Tablet Chewable Licaps Capsules

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Retail, Specialty MLM Mail Order
Retail, Mass Merch Practitioner Internet

Lifestyle, Image and Reflected Self

The affluent American consumer—the consumer most apt to buy nutritional supplements—is trending toward a greater
appreciation of, and connection with, healthy lifestyles. (And an increasingly important part of that is the desire for
more natural, clean label formulations.) This gives the savvy supplement marketer an opportunity to increase brand
connection and loyalty. All you have to do is ensure that the product performs as it should while featuring clean label
Importance
formulations that contain nothing in contrast with the consumer’s lifestyle affiliation.

Easy-to-swallow
Many consumers today are taking supplements for reasons
that transcend the tangible performance of the product.
Theyinare
esn’t get stuck benefiting from supplements in another, less
throat
tangible, way: image and lifestyle.
Works quickly
Capsugel’s Licaps® liquid-filled capsules give you a full array of options with product design, colors, printing and more to
No bad aftertaste
allow your brand to creatively express the values and lifestyle of your target consumers. When they see the care you put
into the formulation, delivery method, capsule design, the packaging and your messaging, their sense of added value will
Works quickest
increase, causing them to value your product even more.

1.4.stomach
Gentle on What kind of competitive environment am I facing?
There are a good0%number of20%aggressive 40%
and nimble 60%
competitors80%
who are pushing the industry forward rapidly. Due to
increased regulation in the U.S. supplement industry, namely good manufacturing practices (GMP) and serious adverse
event reporting (SAER), the government is in effect weeding out weaker competitors and raising the barrier-to-entry for
others. Over time, it is expected to increase the quality of product availability, while simultaneously giving the industry
a stronger credibility boost with consumers.

The good news is the field is still open

Number of Wholesale Percentage
U.S. Supplement Companies, 2008 Companies Supplement Sales of Market for growth. With no clear dominant
($ millions)
industry leader, there are opportunities
Greater than $100M 28 5,970 40% for small- to medium-size industries
$20M-$100M 80 3,058 20% to carve their niche and succeed.

Less than $20M 646 1,652 11%

The key to competitiveness in the
Supplement Manufacturers/Marketers 754 10,680 71%
supplement industry is having strong
Multilevel Wholesale Value 2,593 17% alliances with suppliers and specialists
who can help a brand adapt quickly
Private/Store Label Wholesale Value 1,773 12%
and bring added-value
Total Wholesale Supplement Value 15,096 100%
business solutions
Consumer Sales 25,210 to the market.

Capsugel’s Licaps liquid-filled capsules offer production and marketing

solutions to extend product lines and help brands compete with the
Top-Tier
best in the supplement Importance
industry.
6 Licaps® Capsules vs. Tablet, Chewable and Caplet
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WHAT CAN (AND SHOULD) I OFFER?
2.1. Which consumers should I target?
Every product will have its unique consumer target.
Even seemingly similar products offered within the same
product category may find unique consumer groups that are
attracted to one product over another. Knowing why is essential.

The importance of targeting

Wouldn’t it be great if we could convince everyone on the planet
to buy your product? Except for a few select brands (like Coca-Cola
or Pepsi in the beverage industry), the reality of this is improbable.
For most of us, we have to break the market down to those who
are more likely to buy our products from others. This is the
essence of target marketing.

There are two major forces that need to be aligned in

the targeting process: your brand’s core strength and
your target’s needs/wants. The optimum crossing point
of these two factors gives you the right place to begin.

The method of targeting

Determining your brand’s core strength. If you have a brand that already exists, there are reasons why people are buying
it. It’s because your brand is: (1) The best product on the market for its given purpose. (2) The most enjoyable product
on the market to buy because of the service that surrounds it and/or the feeling I get when I buy it. (3) The best-priced
product on the market. (4) The most convenient to buy.

This may feel like a trivial exercise, but it’s not. It’s usually one of
the four motivations listed above that drives most of the purchasing
decisions of consumers. It’s tempting to think that you can champion
all these purchasing intents equally. But the market rejects those
kinds of widespread claims. They will accept that your brand excels
at one of them and is reasonably competent at the other three.

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 Which one is your brand’s core strength?
For many business people, they just know. If you have any history with your brand, you probably have an intuitive feel for
the right core strength. If you are launching a new brand, it may take some work to discover. Think about the primary way
you are forming your pitch for your product:

• Are you primarily focusing on the product itself?

If so, then you are a product-driven brand.

• Are you focusing on people’s interaction with

the brand and the total customer experience?
If so, then you are a customer-intimate,
customer-experience brand.

• Are you focusing on the cost of the product to the consumer?

If so, then you are a value-driven brand. TIP FOR NEW BRANDS: If you are about to

• Are you making it easy and convenient to buy? launch a new brand, many experts believe
If so, then you are a convenience brand.
it’s wise to reverse the process described

Knowing this core strength makes targeting so much easier.
Also, you are going to find that identifying this core strength
is going to help you choose wisely on the best means and
methods involving a variety of disciplines: product development,
production parameters, packaging and messaging.
above. They believe it’s better to start with
the consumer you can best connect with
and then build the product around his wants
and needs. The steps outlined in the next

section, “How can differentiating my product

Linking core strength to target markets. Now the task of identifying
consumers who will be motivated by your core strength becomes benefit my business?” will help.
your next priority. There are many ways to get to these consumers.

2.2. How can differentiating my product benefit my business?

If you want to get new consumers’ attention, making your product different from your competition is definitely a smart
way to do it. Consumers are more likely to take notice of brands that present themselves as unique and different from
every other choice in the category.

So, as you think about your product and your brand, think about differentiation. Capsugel’s Licaps® liquid-filled cap-
sules are a good place to start. From formulation options to product color and graphics, Licaps capsules offer a unique
suite of tools and solutions that can help create the differentiated brand you need.

A differentiated brand can turn a consumer’s head using less money and energy than an undifferentiated brand requires.
So be unique. Be bold. If you want to increase your margins, make sure your brand is differentiated.

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2.3. How can I differentiate my brand?
The process of determining what differentiates a brand needs to be disciplined and purposeful. Building on the foundation
of targeting and brand strengths, the following list of questions will logically lead you to finding the “sweet spot,” or best
point, of differentiation.

1. Start first with the consumer.

Who are my target consumers? The way to develop a target is first to understand how the market breaks down into natural
segments. Basically a market segment is a cluster of consumers with similar wants and/or needs. For example, Millennials
are currently making values-driven purchases that are increasingly clean label with no additives or preservatives. Determining
wants and needs of consumers can be accomplished in a variety of ways: Internet searches, primary market research, trade
association studies, industry publication readership studies and even personal conversations with prospective consumers.
It’s not impossible to get the information you need. It just takes a little time and perseverance.

Understanding these segments will help you decide which

ones make the most sense to focus on. One segment may
be a group of consumers who use your product because it
“helps them identify with a certain lifestyle.” Another segment
may use your product because it “helps them feel better about themselves.” Another, it “speaks to my values as a
human being.” Once you understand the segments, then you are ready to choose your target consumers.

Why do we target consumers instead of going after all consumers? Two reasons:
First, not every consumer relates to a product in the same way—for example,
Macintosh and PC computers. They appeal to two different segments of WHAT KEY TARGETING
computer users, motivated to buy a computer for two different reasons. QUESTIONS SHOULD I ASK?
Also, budgetary considerations: Very few brands have enough money • How does my target relate
or human resources to adequately market their products to every person
to my product category? • Are
in a given segment, so they target a subsegment and try to build their
brands from there, slowly increasing the size of the target as their they engaged and enthusiastic
business grows. about the purchase? • Or do
they view the purchase as a
Once you choose a target, you need to know as much as possible about
that target. There may be some information already published (the Internet is utility purchase?
a great place to search) or you can find out more yourself by sponsoring your
own research (expensive, but much more helpful and useful). • What are my target’s defining

characteristics? • Do they tend

to be younger consumers?

• Or older? • Are they more

likely to be professionals?

• Or blue collar? • Are they more

likely to be male? • Or female?

• What are their key needs

and wants? 9
?
2. Identify your brand’s strengths.
What kind of brand am I trying to create or extend? Knowing how you think the market is going to
connect with your brand is very important. Consumers want to know what they can expect from your
brand if they were to buy it. Questions to ask to help you determine this connection:

• What is the unique benefit that your brand offers the target consumer?

• Are you an innovator?

Or are you a competitive, alternative brand?

• Are you a premium brand?

Or are you a “value” brand (lower cost offering)?

• Are you a brand that is totally focused on the target consumer?

Or are you a brand that offers a certain type of product to a wide variety After asking those questions,
of consumer segments? can you distill your thoughts
• Is my brand a lifestyle brand? Does it address values-driven decisions? about your brand into one
simple statement about the
benefit your brand offers?

3. Do your own “gap analysis.”

It is helpful to evaluate products in your existing product line, if you have one, as well as those in the marketplace in
order to find opportunities or gaps that you can fill. If you find a market need or a gap in your line where your customers
have to go to the competition, this may be a product area for you to consider.

• What products do I currently have in my line? Review the products

you currently offer to see which market needs you currently meet.
One way to evaluate your line is by “health platform” or products
that support certain health objectives. Some popular health
platforms include: Heart health, bone & joint health and
weight management.

• What other products do my target consumers buy/need that I do

not have? Take a look at the top-selling products in your market
segment to find areas where you may fall short.

• What do my competitors sell? Review your competitors’ product

lines in order to determine if there are gaps or a niche opportunity
you can cover.

• Are there opportunities to further segment my target customer base?

Review products on the market to see if there are subsegments
that do not have products marketed directly to them. Consider
launching a line specifically targeted to a certain age group or a
line just for men.

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Major Supplement Health Platforms:
BONE & JOINT HEALTH
More than half the American population over the age of 18—54 percent are affected by musculoskeletal (bone and joint) conditions,
according to the Burden of Musculoskeletal conditions in the United States1. Bone and joint conditions are the most common cause of
severe long-term pain and physical disability affecting hundreds of millions of people worldwide.
Popular supplements in this category are glucosamine and chondroitin.

IMMUNE HEALTH
According to Natural Marketing Institute, one-half 2 of U.S. consumers claim to be concerned about boosting their immunity at some
point in their lives and that concern increases as they move into their 30s. About one-fourth of the U.S. consumers are likely to purchase
products if it claims to boost immunity.
Popular supplements in this category include probiotics, turmeric, curcumin, flavonoids, antioxidants and vitamins.

HEART HEALTH
According to the CDC, heart disease is the leading cause of death in the United States, killing more than 600,000 people each year 3.
The most common type of heart condition is coronary artery disease which can cause a heart attack.
Popular supplements in this category are coenzyme Q10 (CoQ10), garlic, omega 3s.

VISION HEALTH
Vision loss is a serious public health problem4 in the United States and will get worse in the next 30 years because of the aging popula-
tion, increase in chronic diseases affecting the eye and vision, and changing demographics in the U.S. population. Approximately 14
million Americans aged 12 years and older have self-reported visual impairment defined as distance visual acuity of 20/50 or worse.
Popular supplements in this category are lutein, zeaxanthin, Vitamin A and beta-carotene, omega 3 essential fatty acids.

DIGESTIVE HEALTH
60 to 70 million5 people every day suffer from some form of digestive issues that
range from chronic constipation and reflux to liver disease and pancreatitis. According to
Natural Marketing Institutes SORD study, 81% of supplement consumers are
concerned with preventing and treating digestive issues.
Popular supplements in this category are probiotics, prebiotics, fiber and enzymes.

WEIGHT MANAGEMENT
Nearly 78 million adults and 13 million children in the United States deal with the
health and emotional effects of obesity every day. One in three U.S. adults is obese.
According to the American Heart Association, the disease is projected to cost 190
billion a year in weight-related medical bills.
Fiber, energy, stress reduction and sleep management are areas for supplementation
to address weight management.

SLEEP MANAGEMENT
According to the Center for Disease Control (CDC), insufficient sleep is a public health epidemic. The CDC also states that more than
a third of American adults are not getting enough sleep on a regular basis. The American Academy of Sleep Medicine and the Sleep
Research Society recommend that adults aged 18–60 years sleep at least 7 hours each night to promote optimal health and well-being.
Sleeping less than seven hours per day is associated with an increased risk of developing chronic conditions such as obesity, diabetes,
high blood pressure, heart disease, stroke, and frequent mental distress.6
Popular supplements used for sleep management are melatonin, valerian and theanine.

1) United States Bone and Joint Initiative: The Burden of Musculoskeletal Diseases in the
United States. Rosemont, IL; 2014. http://www.boneandjointburden.org/2014-report/ib0/
prevalence-select-medical-conditions. Accessed July 9, 2015.
2) Health and Wellness Trends Database, Natural Marketing Institute, 2012.
3) CDC, NCHS. Underlying Cause of Death 1999-2013 on CDC WONDER Online Database,
released 2015. Data are from the Multiple Cause of Death Files, 1999-2013, as compiled
from data provided by the 57 vital statistics jurisdictions through the Vital Statistics Coop-
erative Program. Accessed Feb. 3, 2015.
4) Saaddine JB, Venkat Narayan KM, Vinicor F. Vision Loss: A Public Health Problem? Ophthalmology, 2003:110(2);
253–254
5) National Institutes of Health, U.S. Department of Health and Human Services. Opportunities and Challenges in
Digestive Diseases Research: Recommendations of the National Commission on Digestive Diseases. Bethesda,
MD: National Institutes of Health; 2009. NIH Publication 08–6514.
6) Telephone Survey, 2014 Behavioral Risk Factor Surveillance System (BRFSS). Last reviewed February 16, 2016.
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 4. Determine your competitive advantage/position.
What other choices do my target consumers have? It’d be great if we were the only ones trying to sell to our targets. But,
unfortunately we’re not. So, knowing what other choices our target consumers have will help us better differentiate our
brands and make our marketing efforts that much more successful. Key questions to ask:

• Am I competing with a few dominant brands or a variety of

nondominant brands?

• Am I competing in a young, fast-growing market or a mature,

stable market?

• Do I know who my competitors are and what they are saying

to my target consumers?

• Do I already have an existing competitive point of difference?

Once you know your consumers, your Or do I need to create one?
brand strengths and your competitive
environment, you can then find that • Can I position and differentiate my product using key clean label claims?
“sweet spot” where all three come (i.e., sugar-free, caffeine-free, preservative-free, etc.)
together in the best possible alignment • Can I position and differentiate my product using key consumer
for your brand. Then you will find your benefits? (kosher, vegetarian, preservative-free, easy-to-swallow, etc.)
brand more easily connecting with your
consumers, and all your sales and
marketing activities will work harder for you.

2.4. Which products should I offer?

The products you offer (and the ways in which you promote, price and distribute those products) should now be based
on the brand and differentiation strategy just described. Having done the branding front-end work makes product
decisions so much easier.

The rule of thumb for long-term market success is this: Be true to your brand. Protect your brand’s unique benefit and
brand differentiation with all diligence. Your consumers are using your brand to help them make decisions. If your brand
doesn’t maintain a solid differentiation
• Will I be using natural or organic ingredients? from your competition, then you risk
your brand becoming irrelevant.
• Do I have restrictions on the size or quantity of the dosage?
In addition to branding considerations,
• Will my product be targeted toward the vegetarian consumer? practical product questions must
• Does my product require any special handling or storage? also be asked:

• Will this be a single- or multi-ingredient product?

In combination with solid branding
• What amount of the ingredient does the consumer need to
strategies, having a solution with
achieve recommended intake or reach the percentage of daily value?
multiple tools to create high-value,

• Do I need multirelease product formulations, like a combination differentiated products like Capsugel

of fast-acting and time-release? Licaps® liquid-filled capsules, you will
be ready to make a solid entry into
12 • Are there any specific claims I want to make on the label?
the supplements market.
WHAT DO I NEED TO KNOW ABOUT
REGULATORY COMPLIANCE?
Because supplements are products that people actually put into their bodies, you must comply with critical regulatory
guidelines established by governments all over the world. Regulatory compliance is a core part of our business.
It must be understood, mastered and strictly adhered to if you plan on staying in business and making money.

It’s a good thing regulation exists in this industry. Imagine how difficult it would be to sell a product in which consumers
had no confidence. In fact, regulation helps you, and the entire industry, address three core expectations consumers
have about any product in this category:

Expectation of Purity Expectation of Safety/Security Expectation of Efficacy

This is critical because it addresses the
consumer’s need to be assured that the
product being purchased is what it says
it is and not something entirely different.
Brands cannot claim that their products
contain a certain ingredient and then
not have it or contain an ingredient that
is not claimed.
Consumers expect products they
purchase to “do no harm.” The
regulation prevents them from having
to worry if the products available on
the market are safe.
Legitimizing claims about what a
product can do (effectiveness) is
difficult in any category of consumer
products, but especially so in the
supplement market. Regulatory
compliance can help give credence
to your marketing claims.

Regulatory compliance allows us as an industry to achieve a high level of trust with the consumer.
Regulation creates hurdles to prevent poorly manufactured products with false claims from
entering the marketplace in order to help preserve the reputation of the entire industry.

Navigating the Regulatory Maze

There are several core regulatory agencies and organizations that you need to know
about (see the next section). For brands new to the supplement business, the
requirements for compliance can be a bit overwhelming. To have a partner
who is familiar with regulatory compliance issues is extremely valuable and
will help reduce your costs of development and streamline your time to market.
That’s where Capsugel’s Licaps® products can be strategic for you. We handle many aspects
of the manufacturing process for you and can help your regulatory decision-makers with
additional information they may need to help keep your brand on track.

Risks of Noncompliance
Taking regulatory compliance lightly exposes your brand to exceptional
levels of risk. Not only are you at risk of losing consumer confidence, but
you are also at risk of falling under heavy scrutiny by governments who
can cripple your brand with excessive intervention. Because we work in
an industry that makes products for human consumption, government
regulation will always be present, significant and necessary.

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 Regulation and Sourcing Abroad
Since the 1990s, sourcing from China has been an explosive trend in manufactured goods. Business Week warned in
its special report on China in December 2004 about the “futility of trying to match the China price.” The “China price”
has become a strategic weapon and has allowed American businesses and brands to squeeze costs out of its product
offerings, giving the American consumer heightened purchasing power.

But, whether you are looking into sourcing from China, Indonesia, India or
Eastern Europe, regulatory compliance becomes increasingly complicated.
Many brands have managed these complexities of sourcing by aligning with a
trusted specialist who has navigated these regulatory waters many times over.
It’s a level of experience that’s hard to quantify in value—but the value
is significant.

Turning Regulatory Compliance into Marketing Strength

Think of regulatory compliance as third-party endorsements. It’s another way
consumers can have confidence that the claims we make about our products
are legitimate and trustworthy. Your mastery of regulatory compliance and
your ability to communicate it will do wonders for your product’s acceptance.

3.1. Where can I go for help?

The resources for regulatory compliance are vast and can border on overwhelming and confusing. Many companies
pursuing regulatory compliance see partnering with experienced companies as a sure, quick and cost-effective path to
market. To assist in decision-making, the following are some of the more respected sources for regulatory compliance:

FDA’s Current Good Manufacturing Practices (cGMP)

Manufacturing regulations vary by country. In the United
States, the Food and Drug Administration (FDA) has issued
what constitutes current good manufacturing practices
in 21 CFR Part 111. It is a lengthy set of requirements that
cover a variety of manufacturing activities to help ensure
the identity and quality of dietary supplements. The ruling
covers topics such as: production processes, record-
keeping, equipment usage, quality control operations,
contaminant control, shipping and receiving procedures
and product labeling.
It is necessary to understand these processes, which are
available on the FDA website. The implementation and
maintenance of these practices can require a significant
amount of organizational energy and resources that will
factor into the overall costs of manufacturing.
One thing to note about GMP compliance: It’s a
manufacturing-specific set of regulations. This means that
it is not directly associated with any one product, but
applies to your manufacturing process as a whole.

If you are looking to enter or expand in the

dietary supplement market, partnering with

Capsugel’s Licaps® solution, you will already

14 have cGMP certification in place for you.

NATURAL PRODUCTS ASSOCIATION (NPA)
The Natural Products Association has been around since 1936 and
represents over 10,000 retailers, manufacturers and distributors
of natural products. It is a great resource to tap into with their
GMP Certification Program. As a member, the NPA will come
alongside your organization and audit for GMP compliance for
you. The NPA website, www.npainfo.org, is full of helpful informa-
tion about their resources and services.
FOOD AND DRUG ADMINISTRATION (FDA)
As part of the U.S. Department of Health and Human Services, the
FDA is an extremely valuable source of information about regula-
tions and their associated requirements. The FDA is responsible
for dietary supplements, other food products, drugs, medical
devices, vaccines, animal/veterinary, cosmetics and radiation-
emitting products, among others. The FDA website, www.fda.gov,
is filled with all kinds of valuable information, including a section
dedicated to dietary supplements.
FEDERAL TRADE COMMISSION (FTC)
The Federal Trade Commission is tasked with protecting consumers
against “unfair and deceptive acts or practices.” This includes
oversight of the marketing and advertising efforts of a variety of
industries, including dietary supplements. The FTC covers a wide
swath of American business practices, making it a huge and
unwieldy source of regulatory requirements as can be reviewed
on its website: www.ftc.gov.
NSF
NSF has interests in a variety of dietary supplement concerns:
certification of good manufacturing practices, advancement
of nutraceuticals, and the promotion of safety and efficacy of
individual products.
NSF serves as a strong source of information and guidance for
the industry. The NSF offers a cGMP program for manufacturers
as well as an Athletic Banned Substances Certification Program.
The NSF Certified for Sport logo can be used on products as a
marketing tool. It has received worldwide acceptance in a variety
of key world markets. The NSF website, www.nsf.org, is a great
resource for information and requirements for certification.
If your product offering falls into the sports nutrition category, the
NSF certification is a good place to research and add credibility to
your product.
WORLD ANTI-DOPING AGENCY (WADA)
Headquartered in Montreal, WADA is an independent organization
created in 1999 to promote, coordinate and monitor the fight
against doping in sports in all its forms. Manufacturers and brands
in and around the sports nutrition world may find many of the
efforts expended and resources gathered by WADA to be a
benefit in their business strategies. Visit the WADA website at
www.wada-ama.org for more information.
THERAPEUTIC GOODS ADMINISTRATION (TGA)
As part of the Australian Government Department of Health and
Ageing, the TGA is tasked to guard the public health and safety in
Australia. TGA enforces regulations regarding the manufacturing
of therapeutic goods (of which dietary supplements are part).
TGA certification is required for any dietary supplement sold in
Australia. Their website, www.tga.gov.au, has a wide assortment
of guides and resources to properly prepare products for sale in
Australia. As an added benefit, TGA certification standards are
known to be highly regarded by other Asian countries as well, al-
though each country may still require their own official certification.
UNITED NATURAL PRODUCTS ALLIANCE (UNPA)
The United Natural Products Alliance (UNPA) has expanded its
scope and mission to be an international alliance of dietary
supplement and functional food companies that share a
commitment to providing consumers with natural health products
of superior quality, benefit and reliability. Motivated to counteract
aggressive and inappropriate FDA actions against supplement
companies, the UNPA championed the Dietary Supplement
Health and Education Act (DSHEA) of 1994.
The UNPA’s mission is to ensure the implementation and enforce-
ment of the DSHEA, thereby making it a rich source of information
and ideas for GMP regulations, adverse event reporting systems,
analytical method development, control of steroids masquerading
as supplements and international quality management protocols.
The UNPA’s website, www.unpa.com, is an important source for
news, resources and ideas for supplement manufacturers.
Each one of these resources helps get your brand closer to full
regulatory compliance. Experienced in this regulatory environment,
Capsugel has the resources in place for Licaps® capsule custom-
ers to more easily meet regulatory requirements.
15
 3.2. What are common product certifications?
In today’s diverse marketplace, consumers look for symbols to validate and help them differentiate products on the
market. Consumers need clear indications that the products they buy meet certain standards before they are willing to
purchase. Below is a list of common certifications for supplements:

Kosher Certification Halal Certification

Kosher describes foods that are prepared in accordance
with special Jewish dietary laws. Ingredients, equipment
and production processes must be approved by a qualified
Rabbi or Rabbinic organization in order for a finished product
to bear a Kosher Certification Symbol. Kosher status is
generally recognized in the food market today, serving
both religious and healthy-lifestyle consumers. The market
for Kosher products is of significant size and strength for
most dietary supplement manufacturers to consider
having their products carry Kosher certification.
Ko Kosher Service supervises hundreds of companies and
is globally recognized, supervising firms on six continents.
The largest, oldest and strictest of Kosher-certification
organizations is the Orthodox Union (OU; New York City).
Halal is an Arabic term meaning “lawful or permissible”
and describes foods that are allowed under Islamic dietary
guidelines and appeal to Muslim consumers. All ingredients
and the production process must be certified by an
independent organization in order to be considered Halal.
Two of the most recognized groups are the Islamic Services
of America and the Islamic Food and Nutrition Council
in America.
Non-Genetically Modified Organism
(non-GMO)
In recent years, there has been substantial growth in the
use of modified genetics in agriculture where the plant’s
genetic structure is reengineered for a variety of improved
outcomes. Through GMO, plants can become more resistant
to disease, increase yields and even produce different
physical traits.

There has been a backlash of concern about genetically

modified foods. Some have espoused it enthusiastically; others
are against the practice and are lobbying for GMO products to
be labeled for consumer identification. If you think your target
market would appreciate and support a non-GMO product,
16 then this could be a marketing opportunity for you.
Vegetarian
The awareness of vegetarianism is rising in many cultures
around the world. Its acceptance and popularity is becom-
ing more pronounced. According to a 2015 study, 44% of
supplement users say that vegetarian is important when
choosing a supplement. That’s up from 26% in 2006.
So the availability of vegetarian options can be a smart
marketing tool.
Also consider having your product Vegetarian Society
Approved. The Vegetarian Society of the United Kingdom is
the oldest vegetarian organization in the world dedicated to
promoting and understanding vegetarian lifestyles.
Organic
Due to the increased use of chemical pesticides and
herbicides, along with the use of antibiotics and hormones
among livestock, there has been growing concern that the
introduction of these chemicals may have adverse health
effects. A growing number of consumers prefer “organi-
cally grown and raised” food sources.
Organic food production is highly regulated, and producers
need to secure special certifications in order to market
their products as organic. Accounting for 1–2% of all food
production worldwide, offering organic supplement products
under your brand may be an attractive strategy for you.

3.3. Capsugel’s Regulatory Compliance Support

The question remains, “Should I pursue regulatory compliance through a partnership? Or can I go it alone?”

In an ideal world where time and money are unlimited, going it alone may make the most sense. But many supplement
companies looking to extend their brands will conclude that the easiest and most profitable path to market is best traveled
with an experienced partner to guide them.

Many of the cGMP requirements extend deep into its supply chain, affecting the raw materials, equipment and supplier
processes. Ensuring proper sourcing and vendor compliance can be complicated since regulation requires identity
testing of all ingredients to ensure accuracy of the finished product.

Capsugel has been forging relationships for years

with supply chain partners in order to meet the
ever-increasing demands of regulatory compliance.
Capsugel’s Licaps® product program makes it easy
for emerging brands to get up and running with
minimal effort, time and cost.

17
4
HOW DO I DEVELOP A WINNING
FORMULATION IN LIQUIDS?
4.1. Do I already have a product formulation?
Whether you already have a product formulation or need one developed,
this section can help you determine some of the considerations that will
help entice the consumer into buying from you.

If you don’t have a formulation yet, that is not a problem. Capsugel’s Product
Development team will work with you to have a formulation built around your
new supplement idea. If you already have a proprietary formula for your
Licaps® capsule product, we can work to make your formula most effective.

4.2. What should I consider when choosing a dosage form?

What kind of product are you formulating? Is it a vitamin, mineral, herbal or specialty product? Is it single or multiple
ingredients? Does it require timed or phased release? These variables can affect the type of dosage form available to
best meet your needs.

What are your key ingredients? Some ingredients dictate their own formulation strategy. For example: recent studies have
shown that maximum bioavailability, or the ability of the body to absorb, can be best achieved by keeping ingredients in a
solubilized state. If the ingredients you want to use do not dissolve easily, Capsugel’s formulators can improve solubility in
your product formulation to maximize bioavailability. Improved bioavailability is one of the main reasons consumers have
started to prefer the liquid dosage form.

How much ingredient do you need per dose? Some ingredients/formulations

require a minimum amount per serving to be effective. Consider the recommended
Not
all ingredients are easy for daily allowance and the number of capsules required to reach that amount. Then
body to absorb; some do
the consider what size and how many capsules your target user would be willing to
take in a single dose.
not even dissolve in water and

require
a liquid base. Because Does your formulation require specific production strategies? If the production
body must break down
the process for your formulation compromises the efficacy of your active ingredients
then that can determine your formulation strategy. A common production issue
ingredients into a liquid state
is the exposure of your formulation to heat. If you have an ingredient with a low
before
they can be absorbed, melting point or one that needs protection from exposure to oxygen, then you are
formulators have discov-
liquid likely to find a solution with Licaps® liquid-filled capsules to improve your
formulation and stability.
ered that presolubility is the

way
to improve bioavailability,
the ability of the body to
or
absorb the optimum dose.
Does your formulation require any special handling or storage? The stability of
many formulations may be affected by extreme heat or light exposure; some
ingredients can even require refrigeration. Consider your shipping and storage
capabilities and your distribution channel. Capsugel’s formulators will recommend
the conditions for you to best maintain stability in Licaps® liquid-filled capsules.

These are complex issues that need to be addressed in order to offer a viable product in today’s supplement market.
And Capsugel’s Product Development team is there to offer solutions with its Licaps® capsule program.
18
 4.3. How do I know if Licaps® liquid-filled capsules are right for my product?
It’s smart to try your formulation in Licaps® liquid capsules as research has shown that
consumers prefer Licaps liquid capsules over other popular forms of supplement solutions.
The following questions will help guide you in confirming or changing that decision.

THE LICAPS® LIQUID-FILLED CAPSULE DECISION TREE

1. Is your product innovative?

Licaps liquid capsules have several If you want to offer a product that will compete head-on with
YES NO
innovative ways to customize the existing supplements, you can take one of three general paths:
delivery of your product for maximum
efficacy, including cap-in-cap and Offer a lower-cost/price-leadership solution.
beads-in-cap options. If you have the ability to source, manufacture and market with the
highest levels of cost control and operational efficiency, then this
Go to the next question.
strategy may be appropriate for you. If you choose this solution,
then your choice of delivery systems should be to find the lowest-cost
DUOCAP®
system that still maintains required levels of product performance.
Since the use of Licaps liquid capsules is a high-value, high-
performance delivery choice, a low-cost strategy may require
you to choose a different delivery option. In certain production
circumstances, it is possible that Licaps capsules may offer you
a cost benefit at lower volume production runs. So, you still may
consider Licaps capsules before making your final decision.
Beadlet If so, go to the next question.

Find a consumer segment being underserved by other supplement

providers and better meet their needs.
Especially if you have a true, well-defined and unique segment, you
may find Licaps liquid capsules an ideal solution for short production
runs, test marketing or highly variable production environments.

Licaps® If so, go to the next question.

Differentiate your product in ways other than innovation.

Innovation is a very attractive and successful strategy for many
new, emerging supplement providers. But innovation doesn’t have
to be limited to only product formulation. Innovation in packaging,
marketing and/or delivery systems like Licaps liquid capsules can
also be effective.

If this is possible for your brand, go to the next question.

19
 2. Does your product’s total dosage requirement allow you to deliver in capsule form?
If the total dosage of your product exceeds the volume that can be ingested in capsule form, or exceeds the number of
capsules your consumers are willing to take per dose, then Licaps® liquid capsules may not be your best choice.
Consumers may only be willing to take a limited number of capsules per dose.

Then Licaps liquid capsules are an If your ingredient volume exceeds two capsules per single dose,
YES NO
option for you. then you may want to evaluate other options to determine if there
is a better form for your dosage quantity. However, some sports
Go to the next question.
nutrition and wellness products are the exception here—the maxi-
mum acceptable number of capsules per dose is dependent on
your target user.

Capsules come in a variety of sizes to meet your needs.

Max Amount of Oil Fill (ex. Corn Oil 80cP)

Size 2- 280 MG

Size 1- 380 MG

Size 0- 505 MG/400 MG for HPMC

Size 00- 720 MG/600 MG for HPMC

Size 000- 1150 MG

Capsules pictured are actual size.

20
 3. Do you need to go to market quickly?

If speed-to-market is a significant
YES
advantage for your product,
Capsugel’s Licaps® solution can
help you get to market quickly.
Go to the next question.
There are several supplement delivery choices that require longer
NO
lead times. Since you do not have a time-sensitive need in your
product development process, all options are available to you.
Go to the next question.

4. Would your product benefit from a multiphased delivery system?

An example would be if you require delayed release or you need to deliver incompatible ingredients at once.

Licaps liquid capsules are Even if you simply need a single-dose delivery solution, Licaps
YES NO
available in several innovative liquid capsules are still an attractive option for you.
ways to customize the delivery of Go to the next question.
your product for maximum efficacy,
including cap-in-cap and
beads-in-cap options.

Go to the next question.

5. Is your product vegetarian?

Licaps liquid capsules can be formulated in a plant-based option

YES NO to meet your needs.

STILL WORKING DOWN THE DECISION TREE?

If you have made it this far in the Licaps liquid capsule decision tree, then

Licaps liquid capsules are still an attractive option for your product line. Your next

step in the process is to make contact with Capsugel to establish a confidentiality

agreement and discuss the specifics of your product and branding needs.

21
5
CAN I IMPROVE MY ROI
THROUGH PRODUCT DESIGN?
5.1. Why is product differentiation so important?
The entire consumer experience with a product goes well beyond the
simple, functional benefit of the product. A quick look around most
stores and you see rows upon rows of highly attractive, professionally
designed products and packaging, all sporting appealing images.

Why? Simple. Product design works. Appealing products sell

better and at higher prices than lesser appealing products.
Therefore, it makes sense to make sure your product development
strategy incorporates innovative and differentiated product design.

Differentiated design works on the same principle as differentiated branding we discussed in “Section 2: What Products
Can (and Should) I Offer?” Your ability to create a novel, differentiated look to your product and brand creates a new
way for your consumer to notice and interact with your brand. If your product looks like everyone else’s, you will find
your product’s overall potential being hurt. So, look for ways of making your product stand out from the competition. Use
color, design and even formulation strategies to create a point of differentiation. Capsugel’s Licaps® liquid-filled cap-
sules offer a wide variety of differentiation options.

5.2. How can I best integrate my brand and my product?

Beyond the functional or therapeutic benefits, your product is also an opportunity to express your brand appeal to your
target market. Today’s market is competitive and consumers have many choices. Take advantage of options to differentiate
your product appeal, reinforce your brand image and help your product stand out on the store shelf.

The variables you have available include the choice of the capsule
polymer, capsule color and transparency, custom printing and

WHEN CONSIDERING BRANDING multiphase liquid options. How you combine them is the creative

OPTIONS, SOME THINGS YOU part of product design.
SHOULD THINK ABOUT ARE:

• Who are my target customers?

• What features appeal to them?

• What is my overall brand image?

• How can I extend the look to my

new product?

• What is my distribution?

• What characteristics do brands

in these outlets typically feature?

• What options may aid the

functional benefits of my product?
22
5.3. What features appeal to my target audience?
It’s important to look at the demographics and psychographics of consumers in your target market to understand the
features and benefits that may appeal more to them. Some characteristics to consider are:□

• Is your product something they would use regularly? If so, capsules may be a good option because they are easy
to swallow and would prevent “taste burnout.”
• Are they vegetarian? An animal-based product may not be successful with this group. Consider plant-based
alternative polymers that have a healthy-lifestyle appeal.
• Does your target consumer tend to shop at higher end stores or buy premium products?
If so, you may want to avoid a generic appearance and instead give your product
a more sophisticated look that reflects your brand.
• Do they tend to seek clean label or organic products? Fewer additives and
synthetic ingredients could be positive selling points for these consumers.
• Is speed of action a competitive benefit of this product?
• How about combination ingredients?

5.4. How can I extend my brand image to my product?

Whether tough and hardcore or pretty and sleek, reinforce your brand every time your customers see your product with
unique color combinations and printing options. Capsules allow you to print your brand name or logo on your product to
help promote your name. You can even differentiate your brand while maintaining your commitment to natural ingredients
with beautiful all-natural colorants. Custom options provide endless possibilities to make your product distinct.

• Vegetarian capsules provide an ideal solution for vegan and vegetarian customers.

• Mix and match colors that extend your company colors and logo.

• Print your name or logo directly on the product (Capsugel can print up to
two colors).

• Select colors that match the look and tone of your packaging and advertising.

• Select transparent capsules where liquid contents are visible and reinforce
the message that liquids act fast and offer better absorption.

• Use natural ingredients for color to promote your healthy-lifestyle appeal.

• Add pearlescent colors for a striking metallic look.

• Promote liquid capsule advantages on your

product packaging.

23










5.5. What is my distribution?
While this may or may not have a direct
influence on how you design your product,
be sure to review other products sold in
those outlets. Some outlets, for example,
focus primarily on natural products or
cater to vegetarians. In this case, you
may want to consider using plant-based
polymers in transparent or natural colors.
Others may sell products primarily in
6
markets with more dominant branding
and imagery, such as sports nutrition.
Make sure your product design makes
an impact.

5.6.
What options may enhance the functional benefit of my product?

While this section focuses on image and market appeal, product design can also complement
the functional or technical benefits of your product as well.
Some advantages could be:

Still not sure?

Why not test market your
• Liquid-filled capsules may offer better bioavailability and absorption product?
over tablets.

• Easy-to-swallow capsules may aid in compliance, since the consumer Licaps® liquid-filled capsules
may be more apt to take the capsule over other dosage forms. have relatively small minimum
• Some capsule polymers dissolve more quickly or more slowly, which order quantity requirements.
can enhance the effect of your formulation.

• Use of multiphase dosage forms can give your product controlled and
delayed-release properties; multiphase dosage forms can also make
your product unique and innovative.

• Different colors can create different psychological and emotional

responses.

24
6
WHAT ARE MY PACKAGING OPTIONS?
Selecting your product packaging is an important decision. There are two major factors to consider in product packaging
decision-making: (1) the functional aspects of packaging; and (2) the aesthetic aspects of packaging. Your contract manu-
facturer, or CM, will offer a variety of options and can recommend a solution that fits your product and marketing needs.

6.1. What FUNCTIONAL ASPECTS should I consider when selecting packaging?

• Safety • Sensitivity of product ingredients • Storage conditions
(to light, heat, moisture, etc.)
• Size and count • Color and design
• Shipping and distribution
• Ease of use for the consumer • Sustainability/renewability

The most common and economical type of package for dietary

supplements is the standard High Density Polyethylene (HDPE) bottle.
It is available in a variety of sizes to accommodate various bottle counts
and allow ample space for your product label. The bottle can be sold
stand-alone or placed inside a box to allow for more marketing space.
While HDPE bottles are most frequently used, you may wish to consider
other package options to enhance your brand message, including new
bottling alternatives made with compostable materials.

Also consult with your manufacturer about the use of desiccants, cotton
and various safety-sealing options.

6.2. What AESTHETIC ASPECTS should I consider when selecting packaging?

OVERALL LOOK AND FEEL OF THE PACKAGING

Does it look like the level of quality I am hoping to achieve with my product and brand?

PACKAGING AS BRAND DIFFERENTIATOR

Can I show differentiation by packaging my product in such a way that it highlights my
product/brand as being essentially different?

PACKAGING AS SALESPERSON
Does it carry the message and benefits you want to convey about your product and
your brand?

6.3.
What do I have to provide?
Capsugel will provide your finished product. There are contract manufacturers who will handle producing or acquiring the
packaging, label placement, filling and sealing the bottles. You will need to develop and provide copy for the finished
product label.

25
7 7
WHAT MUST I DO ABOUT LABELING?
An important part of your finished product will be your product label. Your label is an opportunity to convey your brand
image, product features and nutritional data. Your label presents the last chance to communicate with your customer, at
the point-of-purchase, to help them decide on buying your product.

7.1. Where do I get my label?

Creating your label includes designing, writing, legal review and production of the finished label—including any package
inserts. Label content and design is your company’s responsibility. Whether you use an in-house art function or work with
an outside agency to design your label, make sure it fits the packaging specifications you select and appeals to your target
audience. You will also need to select a printer to print the physical package labels or work with your contract manufacturer
to have your print-ready labels produced. Your contract manufacturer can readily offer referrals if you need design or print
services to help create your new product label.

7.2. What do I have to put on my label?

Your contract manufacturer will likely provide the Supplement Facts that state the contents of the supplement; beyond that,
they cannot be held liable for statements you choose to put on your label. We recommend you consult with the appropri-
ate regulatory agencies and your legal advisor to ensure you meet the appropriate Food and Drug Administration (FDA) and
Federal Trade Commission (FTC) guidelines.

OTHER ITEMS TO CONSIDER FOR YOUR LABEL:

ACCORDING TO THE FDA,
SUPPLEMENT LABELS MUST • Structure-function claim • Use-by date
INCLUDE INFORMATION SUCH AS: and the FDA disclaimer
• Product imagery
“This statement has not
• Statement of identity been evaluated by the Food • Bar code
and Drug Administration.
• Quantity of contents • Copyrights and trademarks
This product is not intended
• Suggested serving size and to diagnose, treat, cure or • Promotion of
usage instruction prevent any disease.” complementary products

• Supplement facts (ingredients in

descending order of predominance)

• Percentage of recommended daily

allowance when available
VISIT THESE SITES FOR MORE INFORMATION ON
• A term identifying the product as SUPPLEMENT LABEL REQUIREMENTS OR CONTACT
a “supplement” YOUR CONTRACT MANUFACTURER:

• Country of origin • Food & Drug Administration: www.FDA.gov

• Manufacturer/distributor contact • Federal Trade Commission: www.FTC.gov

information per FTC guidelines
• Dietary Supplements: An Advertising Guide for Industry
http://www.ftc.gov/bcp/edu/pubs/business/adv/bus09.shtm

26
 Suggested Use: Take 1 to 3 capsules with each
meal.

Not intended for use by pregnant woman or

chldren 18 years or younger.

Manufactured in a third-party certified facility.

101.9(b), 101.12 Serving size for a dietary supplement is the maxium
amount consumed per eating occassion

Identify your intended target population to consume the supplement

Herbal and Probiotic Blend

Supplement
7 Use common name in
Herbs of Commerce, 1992
Edition (exception for
siberian ginseng, always
list as Eleutherococcus
Senticosus).

101.4 (h) list the part of the

plant. If there is no
Storage: Store at or below room temperature. common name in Herbs of
The product should not be exposed to direct Now with Pepperine ™ Black Pepper Extract
sunlight or high humidity. No trademark ingredients or Commerce 1992 edition,
acronymns in supplement facts box use the latin binomial
name
* These statements have not been evaluated by the Formualted to replace the losses of
Food & Drug Administration. This product is not
coq10 that occurs from taking statins
intended to diagnose, treat, cure, or prevent any
disease No intervening material,
designed to replace the magnesium losses
that occurs freom taking proton pump
only list common or usual
Natural Products Association 101.5 Requires the name and place of inhibitors name and quantitative
440 1st St. NW Declare all amount by weight per
Washington, DC 20001 business (city, state, zip) but 403(y) Third party certified allergens after serving
requires full domestic street address the ingredient
1(202) 223-0101
OR domestic telephone number listing
Vanilla Flavor Other Ingredients: gelatin capsules, sucrose, sodium ascorbate,
Do not use FDA Medwatch phone number nicinamide, ascorbic acid, tricalcium phosphate, magnesium stearate,
101.3 Dietary beta-carotene, vanilla flavor, ferrous sulfate, calcium phosphate, List in descending order of
Dietary Supplement phyridoxine hydrochloride, ergocalciferol, potassium iodide,
supplements cyanocobalaminthiamin mononitrate, citric acid, dextrin, starch, Vitamin predominance by weight
A acetate, dl-alpha tocopheryl acetate, dl-beta tocopheryl acetate, and
must list their Net Quantity 90 capsules FD&C Blue

statement of Contains whey (milk allergen)

identity 101.4(g) List all ingredients including source
ingredients, flavors and those for technical
effect and capsule ingredients
101.17 (e) Always list iron
Warning: accidental overdose of iron-containing products is a leading cause warning if product
of fatal poisoning in children under 6. Keep this product out of reach of
children. In case of accidental overdose, call a doctor or poison control contains iron and it is a
center immediately.
capsule or tablet

27
8 9
WHAT IS THE BEST WAY TO TAKE MY
PRODUCT TO MARKET?
This is a very specialized area of strategic development, whether you already have your distribution in place or you are still
exploring certain distribution possibilities. There are a few main principles you need to consider:

1. How would my target consumers prefer to buy my product?

2. Are there distribution constraints that limit how my product should be taken
to market? (Example: lettuce. It’s not well-suited for Internet sales or direct mail.)

3. Which distribution method offers my best return on investment (by either lowering my total
cost of sale or expanding/enhancing my market potential)?

4. Which distribution method gives me an opportunity for creating a competitive advantage?

The following discussion will serve as an idea generator.

It may also influence product packaging and product design decisions, as well.

8.1. What are my choices?

Selling through the channel/trade
Brick-and-Mortar Retail The retail sector can be divided
into a variety of classes. For the supplement business, the
two largest divisions are food and drug retailers (such as
Walmart, Costco, Walgreen’s, etc.) and specialty retailers
(who can either specialize in a product category like GNC
or in a geographical market). You may also consider selling
through service outlets such as gyms or spas depending on
your target market and objectives. Each type of retail outlet
has advantages and challenges.
The Internet The Internet is a growing distribution channel
for supplement brands. It’s a low-cost distribution strategy
that allows you to protect product margins. You can sell
through Internet sites (like Amazon.com, for example).
Direct Marketing Firms There are many direct marketing
firms looking for products to sell through their personal
sales forces or catalogs (network marketing, home
shopping network, for example).

Direct-to-Consumer (DTC) This option will require more

investment, but if you already have your own DTC
distribution established, then you are another step
ahead. With DTC, you would set up your own retail
store, website for your brand or a personal selling team
to promote and sell your new product line.

8.2. How can I choose which path to market is best for my brand?
The decision on which channel (or channels) in which to sell is complex and something you will have to determine in
order to get your product in front of your target consumers. However, your distribution selection, as mentioned earlier,
can also affect how you choose to establish your supplement product line and brand. Talking with Capsugel can give
you added insight into the effects of distribution on your product strategy.

28
9
HOW SOON CAN I GO TO
MARKET WITH MY NEW PRODUCT?
9.1. What do I need to understand before going forward?
You know you want to do a supplement product in liquids. Getting a product from a simple idea into the consumer’s
hands requires commitment. There are many details and challenges that need to be considered before moving forward as
discussed in the previous sections. This includes understanding your target consumer, market environment, manufacturing
strategy and distribution strategy. Once you are ready, Capsugel is available to help you take your product from
conception to completion.

BENEFITS OF USING CAPSUGEL TO CONTRACT MANUFACTURE YOUR

PRODUCT IN LICAPS® CAPSULES INCLUDE:

• You cannot afford a capital investment in manufacturing equipment or

you prefer to work with someone more experienced in manufacturing.
• You need a new approach for your new supplement.
• You are not prepared, do not have time or cannot afford to establish
manufacturing, sourcing and testing processes and procedures to
meet regulatory requirements.
• You wish to focus on marketing and building your brand.
• You do not have internal resources to source and test your raw ingredients.
• You need help creating your product formulation.
• You need a complete, finished, packaged product.
• You need the flexibility of doing smaller production batches.

9.2. What can I expect for new product development time?

Because the dietary supplement business is notorious for being fast-paced and continuously
morphing and changing, speed-to-market is key. The development process can take from weeks up
to a year depending on experience, complexities of the formulation and manufacturing capabilities.
Capsugel’s Licaps® liquid capsule program is ideal because product development, ingredient sourcing
and manufacturing processes are already in place in order to improve your speed-to-market.

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 9.3. What are my next steps in the process?
The most important next step you can make is to consult with a trusted contract manufacturing partner. Capsugel has
developed a great path to market for supplement brands just like yours and can educate and assist you in finding the
best possible solutions. The Licaps® liquid capsule program combines product innovation and custom manufacturing
to give you an edge. Even if you are an experienced supplement manufacturer, you may find that using Capsugel’s
Licaps liquid capsule program gives you the optimum new product launch platform without risking costly internal
production retooling, interruptions and ramp-ups.

Additionally, it’s your idea, your product and your brand. When working with
Capsugel, we’ll sign a Confidential Disclosure Agreement to protect your
sensitive product information and marketing strategies. Capsugel is a
trusted business partner and will keep your business information confidential.

9.4. Are you ready to get started?

HERE IS A LIST OF QUESTIONS

YOUR CAPSUGEL REPRESENTATIVE WILL ASK YOU:

• Is this a new or existing product(s)? Do you already have

supplement items on the market?

• Who is your target market and have you assessed the

competitive environment?

• In which countries do you intend to sell this product(s)?

Is it for dietary supplements?
Now that you have reviewed all
• Do you already have a formulation or do you need assistance?

If so, what do you want your product(s) to do? the steps and considerations

• Do you have raw material sources or any ingredient restrictions? for creating your new supplement

• How much is required per dose? Does capsule size matter? product, it’s time to give Capsugel

• How will your product(s) be distributed? a call. Creating your supplement in

• What is your anticipated volume? Licaps liquid capsules for improved

• What is your target pricing and profit margin for the product(s)?
bioavailability will help your product

• Do you require packaging?
stand out and put you alongside a

• What is your timeline (turnaround time)?
trusted manufacturing partner that

• Do you require any special market certifications or qualities?
will help you take your product
(i.e., vegetarian, kosher, TGA, etc.)
from conception to completion.
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 NOTES

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ABOUT CAPSUGEL
Capsugel, the world’s leading capsule manufacturer, offers a full range of

products and services to deliver innovative, quality dosage forms. With 10

global manufacturing locations and unsurpassed service and support, Capsugel

is a trusted partner to dietary supplement manufacturers and marketers.

Companies look to our leadership to help them formulate new products,

enhance existing product lines and bring new products to market faster. From

formulation to packaging, Capsugel offers full turnkey solutions to help take

your product idea from concept to consumer.

Contact us for alternative capsule polymers, sizes, print and color.

For more information, call 1.888.783.6361, visit www.capsugel.com

or contact your local Capsugel Representative.
GMNC201001001

Capsugel has made every reasonable effort to include accurate and up-to-date information on this brochure but makes no
warranties or representations of any kind as to its accuracy or completeness. The entire contents of this brochure are subject to
copyright protection. Copyright © 2017 Capsugel Belgium NV. All rights reserved.

www.capsugel.com LIT201504005
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