Empty Capsules
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global Market Outlook on Empty Capsules

• Global empty capsules market was estimated at $1.63 billion in 2017 and is estimated to grow at a CAGR of 7-8 percent till 2020.
• Increasing health awareness across the globe, aging population and rising consumption of capsules in clinical trials are the factors driving the market for empty capsules.
• Global market leaders such Capsugel and Qualicaps are expanding manufacturing capacity as well as trying to become backward integrated by acquiring gelatin manufacturing companies

• Key End-use Industries for empty capsules: Pharmaceutical - 45 percent (2018), Nutraceuticals - 40 percent (2018) and Cosmetics - 15 Percent (2018).
• Top global empty capsules suppliers: Lonza, ACG, Qualicaps, Roxlor, Caps Canada, Suheung.
•  KPIs for the empty capsules market: Price, usage of approved raw material, regulatory certifications, product portfolio.
• High Market Maturity Locations: U.S. and Europe
• Medium Market Maturity Locations: India, China, and Brazil
• Low empty capsules Market Maturity Locations: Africa and Middle East.
• Capsule manufacturers engage in multiple sourcing for Gelatin and Cellulose from empty capsule suppliers

Industry Practice

• Big pharma generally prefers a dual sourcing strategy so as to minimize the risk of any supply disruptions. Global capsule manufacturers, such as Capsugel and Qualicaps have quite high manufacturing capacities compared to annual purchase volume of Big pharma companies (2 billion capsules)
• Also, capsule manufacturers are attempting to become backward integrated so as to gain more control on the gelatin pricing
• Big pharma and domestic pharma companies manufacture drugs for the domestic market thus they prefer to buy empty capsules locally as it helps in reducing cost. E.g.,. GSK sources empty capsules from Natural Capsules Ltd. and Cipla sources empty capsules from multiple local suppliers

Global Demand by Application

• Health conditions of aging population, clinical trial testing of formulations, changing consumer lifestyles and edible beauty products with specific applications are the major factors for the consumption of empty capsules in pharma, nutraceutical and cosmetic industries

Drivers of Demand by Application

• Pharma: Health conditions associated with aging population is a key driver for drugs being launched in capsules as it becomes more easier and convinient to use the prescribed therapy. Also, pharma companies partner with capsule manufacturers to use empty capsules in clinical trials as the process requires to provide specific dosage of drug molecule to subjects
• Nutraceuticals: Soft gelatin and HPMC capsules are widely used in dietary supplements. Soft gelatin capsules are used to deliver health friendly molecules of Omega 3 fatty acid and fish oil
• Cosmetics: Edible beauty products with specific appilcations, such as moisture retention on the skin have been launched by cosmetic companies in capsules

Feedstock Market Analysis

• Global Gelatin market is expected to grow at a CAGR of 2-3 percent from 2015-2020, with Europe contributing around 35 percent of the global market. Pork and hide remains the major raw material sources of gelatin, together contributing to approx. 70 percent of the gelatin market.

Feedstock Contribution in Total Gelatin Market (2017)

• Aging population and increasing nutraceutical market are expected to drive the gelatin market
• The gelatin industry being consolidated (top 7 players hold 65-70 percent), the buyer does not have much of a bargaining power. However, global food and pharma buyers buy large volumes of gelatin allowing them a slight negotiating bandwidth
• Many of the gelatin players are operating at about 85-90 percent of their installed capacities
• Due to fluctuating prices of raw materials, gelatin buyers engage in half yearly contracts. However, depending upon the volume purchased, contract period span between 3 months to 1 year also

Market Overview

The capsule industry is highly consolidated (the top three players held 65–70 percent in 2018). Hence, buyers do not have much bargaining power Regional manufacturers in Asia are able to offer cost competitive quality products to big pharma companies. Global empty capsule market is quite consolidated as few players account for 70 percent of the market. The buyers have less negotiation leverage due to lower purchase volume and competition from other industries. Capsules industry is capital and technology-intensive, this acts as a barrier for the entry of new players. The empty capsules suppliers across the globe rely majorly on gelatin as a raw material, which is derived out of pig and cow skin and bones, the animal nature of the raw material continues to be a controversial aspect for the capsules.

Why You Should Buy This Report

The report provides information about the global and regional empty capsules market including regional market snapshot of Europe, North America, and Asia. It lists out the industry drivers and constraints and gives the Porter’s five force analysis of the empty capsules market. It does a cost structure and pricing analysis and provides information about industry trends and best practices The report lists and gives profile of the key empty capsules suppliers like Roxlor, Natural Capsules Limited, etc.