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Industry News
Report Looks at Pharma CPO Market
The global pharmaceutical contract packaging market size was valued at $28.2 billion in 2019 and is expected to grow at a CAGR of 7.1% from 2020 to 2027, to reach $47.7 billion. That’s according to a new report from Grand View Research, Inc., which lists several drivers of this growth. Among them, the desire of pharmaceutical companies to reduce their overall cost of production and to increase speed to market; the lack of in-house packaging capabilities and expertise along with budget constraints by smaller pharma companies; the need for pharma companies to meet serialization regulations; and the overall growth and increasing competitiveness of the global pharmaceutical industry.
In 2019, North America accounted for the largest share of the pharmaceutical Contract Packaging Organization (CPO) market, at 32.7%, due to the quality offerings provided by CPOs and Contract Development and Manufacturing Organizations • U.K.-based co-packer APS has migrated improve the traceability and visibility of its materials and labor productivity across its operations. Given the constraints of the COVID-19 lockdown,
Nulogy implemented the solution entirely remotely, handling the change management process from ASP’s legacy systems through a combination of (CDMOs), the report explained. During the forecast period of 2020 to 2027, however, Grand View Research forecasts that Asia Pacific will witness the fastest growth, owing to the presence of a large number of contract service providers in the region.
When it comes to the type of packaging services requested, the report notes that primary packaging accounted for the largest share of revenue in 2019, at 40.2%, and is expected to dominate the pharmaceutical contract packaging market through the forecast period. By packaging format, bottles comprise the largest segment, owing, the report says, “to the growing requirement of pharmaceutical bottles worldwide and the increasing adoption of pharmaceutical bottles for unit-dose packaging, particularly from high-demand regions such as Asia Pacific.” However, it adds that the blisterpack segment is expected to register a higher CAGR over the forecast period due to an increase in the outsourcing of blistervideo-based conferencing and its online learning platform, Nulogy University. • Custom and private-label supplement manufacturer BL Bio Lab of Clearwater,
Fla., has expanded its initial machinery for capsules, tablets, powders, and liquids, and now offers a wider range of private-label supplements and custom formulations. • Four companies with beverage commering Microfactory—have joined together to form IncuBev to accelerate pre-commercial activities, including product development, package conceptualization, prototyping, and activation for consumer testing and concept validation.
Co-Packing Industry Watch
packing activities to emerging countries such as China, India, and Brazil.
In terms of packaging material, in 2019, glass held the largest revenue share, at 37.6%, as it is suitable for most parenteral and non-parenteral preparations in the industry. As for plastic, it is anticipated to witness an 8% CAGR over the forecast period, due to the growing demand for plastic packaging for the storage and
to Nulogy’s cloud-based software to
cialization experience—PTI, Symrise,
Califormulations, and Haney, a Packagdelivery of medicines. CP • Legacy Pharmaceutical Packaging, a contract packager serving the global pharmaceutical industry with bottling, blistering, pouching, unit-of-use, serialization compliance, and secondary packaging services, has rebranded itself as Legacy Pharma Solutions. • PLZ Aeroscience Corp., a Downers
Grove, Ill.-based manufacturer of specialty aerosol and liquid products, has acquired Mansfield-King, LLC, a contract manufacturer of specialty personal care products in Indianapolis. • Sonoco has signed an agreement to sell its Europe contract packaging business,
Sonoco Poland Packaging Services Sp. z o.o., to Prairie Industries Holdings for $120 million. CP
CBD Business Maps New Frontier
After experiencing firsthand the medicinal power of CBD, Bruce Bernstein launches UBIX Processing, a private-label manufacturer and packager of a range of CBD wellness and cosmetic products.
ANNE MARIE MOHAN, Editor
According to Bruce Bernstein, founder, President & CEO of UBIX Processing, his first experience with CBD was “like catching lightning in a bottle.” At 48, Bernstein, a telecom executive, learned the devastating news that he had prostate cancer. He was adamant though that conventional treatment was not for him. Says Bernstein, “I like to keep all my body parts in place, so I was one of those crazy guys looking for a naturopathic solution. Usually, as you know, those kinds of people wind up killing themselves. I don’t think I’m self-realized enough to understand that that was a potential. But I happened to be one of those idiots who actually pulled it off—I’m cancer free.”
In doing research on naturopathic therapies, Bernstein had come across information on the Internet that claimed cannabis could cure cancer. While he found the notion “absurd,” he gave it a try and began creating his own cannabis and CBD oils at his dining room table. Through experimentation, he found that cannabis oil gave him unbearable vertigo. But upon taking CBD oil for the first time, Bernstein—who was a chronic insomniac—began sleeping better than he had in years. Even more significant, though, was how rapidly his PSA numbers began dropping.
“Once this started happening, where the numbers started reversing, my wife, Britt [Stanford], and I basically said, ‘We’ve got to do something,’” says Bernstein. “It’s almost as if we caught lightning in a bottle. I felt like running down the street yelling like Paul Revere, ‘This is something amazing.’ This is something that everyone, whether they want to take it or not, should at least know is a powerful compound for good.’”
As a result, in May 2014, Bernstein and Stanford founded UBIX, a Colorado Springs, Colo., company offering privatelabel and wholesale hemp-extracted CBD products for people and pets.
CBD market seeing impressive growth
CBD, short for cannabidiol, is one of the compounds, or phytocannabinoids, found in cannabis plants. As Bernstein explains, there are more than 120 known cannabinoids in nature. Most people are more familiar with another compound in cannabis, THC, or tetrahydrocannabinol, which is the chemical responsible for most of marijuana’s psychoactive responses. While CBD is a component of marijuana, by itself it does not cause a “high.”
According to Bernstein, one of the biggest misconceptions regarding the cannabis industry is that there is a distinct difference between industrial hemp and cannabis. “At the end of the day,” he says, “it’s all cannabis.” The difference is a legal demarcation, established by the 2018 U.S. Farm Bill. According to the bill, cannabis and related products containing 0.3% THC or greater are classified as marijuana, which remains a Schedule I drug and is regulated as such. But, cannabis plants and products containing <0.3% THC (which is considered to be merely a “trace amount”) are designated as industrial hemp, which is legal to possess and consume at a federal level. CBD is a hemp-derived product.
As Bernstein explains, CBD works with the body’s own endocannabinoid system. “The ECS is a network of receptors that spreads through our entire body and controls some of its most vital functions, including your immune system, memory, appetite, mood, and pain sensations,” he says. “When I first discovered this, it was almost like discovering a continent.”
When diseases are present in the body, the ECS system kicks into high gear, with ECS deficiency linked to a number of common illnesses, including migraines, fibromyalgia, and irritable bowel syndrome. “So what cannabinoids do is they feed your endocannabinoid system so it can help regulate all functions in your body,” Bernstein says. “In other words, our bodies need cannabinoids.”
CBD has been shown in studies to reduce anxiety, attention deficits, and depression, and can also provide pain relief and lessen the frequency and severity of seizures. It’s also being used by consumers for a variety of other conditions, including PTSD, allergies and asthma, nausea, sleep disorders, and migraines, among others.
Given its 100% natural medicinal properties, CBD products have seen a meteoric rise in both use and popularity over the last few years. In 2019, a report from Brightfield Group noted that the hemp-derived CBD market is on track to grow to $23.7 billion through 2023, with the bulk of the growth coming from large retailers like CVS, Walgreens, and Kroger.
Full-service CBD source
When UBIX launched, its services included everything from the extraction of the CBD oil from the hemp plant all
Bruce Bernstein, founder, President & CEO, UBIX Processing
the way through product formulation, manufacture, packaging, and fulfillment. Since then, however, Bernstein switched to buying the oil from farmers, who were able to offer him a better price than what it cost him to do his own extracting.
“We’re a private-label manufacturer, but we do R&D, prototyping, and copacking,” he says. “We’re also doing a lot of reverse engineering and replication. And we’ve been doing some R&D for a private-equity firm where we’re making seven products for the customer. So, some customers have a very clear, concise ingredient list, and then there are others who don’t have a clue, so we’ll develop a formulation for them.”
Most of UBIX’s business is private label, but it also manufactures its own lines, which include a selection of wellness products under the Nu Apothecary brand and Nu Remedy cosmetic products. The company’s product mix comprises roughly 85% topicals and 15% ingestibles. Topicals include balms, salves, and lotions. Its cosmetic line features hydrating oil, hyaluronic creams and serums, face creams, face washes, and much more. Ingestibles include tinctures, capsules, and gummies, among other products.
Most of UBIX’s business is private label, but it also manufactures its own lines, including its Nu Apothecary wellness products and Nu Remedy cosmetic items.
UBIX offers a large stock of ready-to-ship CBD products, or, as mentioned, it can customize products and packaging to meet customer needs.
At presstime, Bernstein shared that UBIX is in the process of launching five different websites: two upscale sites— one called Baxter for pet products, and one called Golden, which will feature products for the 50-and-up demographic; two featuring products in the medium price range, for its Nu Apothecary and Nu Remedy lines; and a liquidation site, called Big Bad Bear. “So we can be more daring with trying new things,” he says, “because if they don’t sell, we have the high end we can move to the medium, and if it doesn’t sell there, we can liquidate it.”
According to Bernstein, what differentiates UBIX is its creativity, its agility, and its analytics. “There are a lot of me-too products out there, and we do a really good job of customizing products and creating ensembles. For example, we just put together a beauty cream, an eye cream, a hyaluronic acid, and a hydrating product ensemble,” he says. “We can also quickly make modifications to products to meet customer requirements. We try to operate somewhat just-in-time, so we’re not overburdened by product on shelf.”
Because the CBD industry is not currently regulated, third-party testing resulting in a Certificate of Analysis (COA) for a product ensures its quality and purity. According to Bernstein, UBIX’s analytics are on-par with those of some of the larger CBD players. “I think maybe only 25% of the market is doing all the right things and being compliant,” he says. “So from a level of compliance, we’re there.”
Automated filling keeps product flowing
While many co-packers keep their packaging processes highly manual to remain flexible enough to produce different product sizes and configurations, UBIX is up and running with a number of automated filling systems. Among them is an automatic in-line liquid filling machine from REB, Inc., for its topicals. The REBIVS has six filling heads and can produce about 75,000 units/day. Containers are capped using a semi-automated unit from SureKap.
Because UBIX changes its topical product formulations and packaging quite often, it was important when selecting the machine that changeover was a quick and easy. Pre-engineering, including cutting a channel in the floor at the plant and some piping within the machines, means that the REB-IVS can be sanitized and flushed out in approximately 30 to 40 minutes. Universal pressure adjustment for the filling heads allows UBIX to quickly change product viscosities with the turn of a switch. In terms of changeover for different package sizes, Bernstein explains that there are different piston sizes for packages above eight ounces. “But I would say that right now, one hundred percent of the product we’re filling is 1.7 to 2 ounce, or 3.4 to 4 ounce, and once in a while, we’ll get an eight ounce. So very rarely do we have to change the pistons.”
For its tinctures, UBIX has two Flexicon FlexFeed 20 fillers from Watson-Marlow, each of which can produce around 3,500 units/day. Secondary packaging operations are currently manual.
As for the packaging itself, UBIX provides an array of package types and sizes, depending on the product, and offers an in-house graphic design team to help customers create their own labels. Says Bernstein, whereas the biggest packaging concern for cannabis
companies is the requirement for a childproof container, the biggest packaging challenge for CBD producers is a lack of sophistication. “I’m encouraging my customers to pick up their packaging game and use better bottles that are more aesthetically pleasing,” he says. “I’ve been trying to make our cosmetic products look more like a Lancôme, by doing silk-screen printing and having a really sleek white on black or white on grey appearance. I just think there’s so much more ahead of us when it comes to presentation.”
UBIX is also working to add recycledcontent and recyclable packaging to its offerings to meet consumer requests for these types of materials.
Co-pack partnership opportunities
The potential for CBD products is massive, and it’s only just begun. “The market is going to be so huge,” relates Bernstein. “We talk about the cannabis space. I say that’s a micro market where it’s
A UBIX operator uses a semi-automated machine to cap bottles.
almost like a liquor store type of setup. In Colorado, it’s pretty much normalized where there’s a cannabis dispensary, and people or businesses make enough for their store. And it’s small batches. You’re not going to see cannabis in Target or Walmart—you’re going to see CBD. I’m already seeing it at King Soopers and Kroger.”
Because of this, he adds, he envisions much opportunity for cooperation among co-packers, such as regional outsourcing of items such as food or beverages that are expensive to ship. He adds, “And working with known entities in the industry will limit unpleasant surprises, especially when co-packers have relationships with CPGs and big box stores. I think that’s going to make this whole transition to retail and big-box stores much easier.”
In conclusion, Bernstein says, “I have a tremendous reverence for this compound because it really saved me. So we don’t make products just to make money; we make products because we really believe this is a powerful medicine. And, if it’s done properly, we will have a profound impact on the people who use our products.” CP
UBIX operates a 20,000-sq-ft facility in Colorado Springs, Colo.
Coffee Pod Co-Packer Benefits from ERP Perks
Between limiting downtime, speeding up throughput, and a host of soon-to-be realized improvements via ERP data harvesting, Pod Pack is making the most of its new enterprise resource planning system.
MATT REYNOLDS, Editor, Packaging World magazine
From humble beginnings nearly 25 years ago in a 400-sq-ft New Orleans facility, with a single SKU of single-serve espresso, Pod Pack has grown to be considered “the Switzerland of coffee pod packaging,” as the company does business with just about every coffee brand, these days, on some level. That includes many major national, regional, and privatelabel store brands as a value-added co-manufacturing partner. The company also serves the institutional and hospitality segments where its products can be found in hotels, hospitals, offices, college campuses, QSRs, convenience stores, and foodservice locations, plus a host of local, high-growth boutique brands.
“We offer a wide array of turnkey singleserve solutions,” says Marion Gray, CFO, Pod Pack. “Whether using the customer’s coffee or one of our in-house blend selections, we can manufacture virtually any single-serve format the customer prefers. We have 14 different packaging lines—all primarily custom-designed, highly specified equipment.”
There are many tight-tolerance, multipoint processes and ensuing packaging operations that occur dependent on the specific format desired. For instance, coffee beans that are designated for K-cup compatible products are ground precisely 24 hours prior to primary packaging to allow for optimal degassing to occur, a necessary step for this format. But other single-serve formats go from whole bean to ground coffee to packaging in less than 180 seconds, ensuring maximum freshness for the end consumer. For soft filter pod offerings, coffee beans are ground
Pod Pack now operates 14 packaging lines producing more than a dozen formats with contract packaging customers, including all the big national brands, local regional brands, hospitals, schools, foodservice, and anywhere else you can imagine.
to exacting specifications per a predetermined amount that is automatically metered out by volume or bulk density onto the bottom layer of a single-serve filter paper pod, and the top layer is heat sealed to enclose the pod. Secondary packaging involves a number of individual pods being placed into a film pouch, which is then nitrogen flushed and sealed, again ensuring maximum freshness.
Dealing with SKU proliferation
Far from its original digs, Pod Pack now operates a 75,000-sq-ft facility in Baton Rouge, La., and in 2018, the family-owned business took on private equity partner to accelerate growth. And grow it has. Like other contract manufacturers and packagers that are growing and dealing with major brands and private label, as well as growing its own brand, Pod Pack has recently been dealing with a rising number of SKUs.
“We currently support over a dozen convenience-portioned formats, and certain lines are tailored to certain applications,” Gray explains. “On a given day we are likely to be running all formats across our 14 different production lines. Each product that we develop or manufacture for a customer will have its own product specifications sheet. That product specifications sheet details all the materials that are used, including the precise grind, weight, flavor profile, and packaging format. Anything you can imagine that’s specific to that product is on that sheet— we think of it as a unique, custom recipe for each product.”
Until recently, this meant operators starting a new production run had to consult a Microsoft Excel-based database—a clunky but familiar and functional workaround for so many manufacturers for so long—to find the right recipe. Then, they would have to manually gather the
correct packaging materials and components, such as film and filter paper or machine changeparts and the tools needed to changeover. Often, Gray says, this could mean operators physically checking for stock parts, a time-consuming process.
“It was a fairly manual process that involved a combination of paper, binders, Excel files, and access databases,” Gray says.
It was also a static process with little runway for scale. Such a process would suffice for a limited number of SKUs, but in a dynamic growth environment, the process no longer worked. The facility was growing, and with outside investment, the prospects for the future were growing. It became clear that a better solution was in order.
In recent years, Pod Pack implemented the DELMIAWORKS (formerly IQMS) manufacturing ERP system to drive the real-time insights and automated processes required to handle SKU proliferation, ensure quality and compliance, maximize productivity, and provide a superior customer experience. Though, as the name implies, the ERP system is enterprise-wide, advantages are felt right down to the packaging line operations.
Each production cell now has its own workstation with an HMI. From that workstation, operators are running a shop data interface out of DELMIAWORKS that’s giving them continual information on the production. Operators have spec sheets available to them, and they can monitor materials and inventories. They’re also using that interface to load real-time production data on quality checks, downtime, or maintenance issues specific to the equipment they’re running. Everything’s right there, digitized, and at their fingertips.
By now, most large, international brand owners are well-versed in ERP; they wouldn’t be able to successfully compete on that stage if they weren’t. And there are a lot of options for companies seeking ERP solutions. But after thorough
From an HMI in each pack cell, operators interface with shop data that relates real-time metrics and parts and material inventories.
research, Gray and Pod Pack saw the DELMIAWORKS system was the right fit for them since it had all the capacity to grow, but still was a manageable stack for its unique set of needs. As a contract manufacturer and packager with a large and growing SKU base and a need for flexibility and variability, Pod Pack needed an ERP system that would grow with them.
“The size is right for our company,” Gray says. “It can handle a lot of transactions and multiple locations as needed. From an install perspective, it has been much easier to digest and operationalize than some of its competitors’ offerings.
“At the same time, you benefit from having a fully integrated system across finance, HR, manufacturing, and purchasing,” he adds. “We are able to leverage cutting-edge technology solutions without the headache and cost of a larger, less tailored option.”
ERP data harvest drives continuous improvement
One common refrain heard during ERP implementation is that it suddenly introduces a whole lot of data that weren’t previously available on existing systems, and that can be overwhelming at first. But being able to manipulate these data to its advantage has been a boon to Pod Pack.
“We’ve seen immediate benefit to having access to real-time shop data on the floor,” Gray says. “We have mandatory quality checks based on the size of the run and the type of product. Operators are flagged and required to do certain quality checks, and the quality data are logged into the ERP system. No paper means providing enhanced visibility into our endto-end quality program.
“As important, we use real-time monitoring for all of the equipment, and we know every time a machine deviates from its production schedule,” he adds. “If unexpected downtime elapses for greater than 120 seconds, the operator is required to code and document the situation. We’ve utilized that data to empower our production supervisors, who have real-time insights that were not available before automating our manufacturing processes with the DELMIAWORKS solution.”
Closing the loop, Gray and Pod Pack are able to use this information with their maintenance team not only to address issues, but proactively optimize preventative maintenance schedules. Enhanced data usage for continuous improvement doesn’t simply reduce downtime; it actively increases speed.
“Real-time data allows us to monitor the actual production speed when the machine is running. So, if the machine’s running below our targeted units per minute, we can go to the floor and correct immediately. Targeted adjustments can be made to ensure each cell is hitting its production spec before the shift or run is over. Again, it’s all real-time data that allows us to preemptively manage potential risk and maximize overall productivity.”
Case in point
Coffee packaging equipment is famously precise and complex. “If you take care of it and keep it running right, it will last forever, at least longer than I will,” Gray says of this well-known packaging
machinery dynamic. “As an example, we have two pieces of highly technical equipment that we run for a customer, equipment that is not readily accessible in today’s market. We jumped at the opportunity to collaboratively solve the challenge. We brought it in, refurbished it, and customized it. By using downtime tracking and data collection, operators and engineers have been continually enhancing and fine-tuning the equipment. We successfully engineered a piece of legacy customer equipment and improved uptime from 35% to 70% on a regular basis. And these are very high-speed machines, so that was a dramatic improvement in productivity and reliability. And then there are knockon effects downstream, as more uptime in primary packaging then pushed the whole line to go faster, and secondary and end-of-line machine usage goes up.
“As a finance guy, I love it. Because by increasing my uptime and my reliability, I’m essentially increasing capacity without spending capital dollars. And that’s huge for a high-growth company like us—being able to support additional volume running through the facility as our business continues to accelerate.”
What’s next
Many brands and packagers that implement ERP systems, with all their attendant data manipulation, take some time to realize all of the benefits. You connect all the cords and begin syphoning off so much data that it can’t all be immediately actionable on day one. Pod Pack’s experience has reflected this, but it intends, over time, to make the most out of the DELMIAWORKS ERP. After those initial wins in speed and downtime reduction, Gray and Pod Pack are moving on to new uses.
“We’re rolling out dashboards to display on the production floor to provide the entire production team with a quick overview of production runs and performance. We continue to add projects, and this system can scale with our growth,” Gray says. “The system captures such an immense amount of data. We meet regularly with our system reporting lead to roll out additional enhancements. We’re continually adding new inputs to the system to allow it to do more for us and become more valuable to the organization. We’re going to use it to drill down into our manufacturing costs and continue to enhance customer success. We’ve got a lot of data, and now we’re realizing the full potential of that data to drive the best value and experience for our partners and customers.” CP
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