Empty Capsules
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Global Market Outlook on Empty Capsules

• The global empty capsules market was estimated at $2.1 billion in 2019 and is estimated to grow at a CAGR of 7–8% until 2022.
• Increasing health awareness across the globe, the aging population and rising consumption of capsules in clinical trials are the factors driving the market for empty capsules.
• Global market leaders 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 the 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 the 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 over 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.

Good Manufacturing Practices (GMP)

It is essential that the manufacture and filling of capsules should adhere to good manufacturing practice (GMP) guidelines.

Some of the main guidelines are:

●      Minimal degradation of the active ingredients and no change to the solid-state properties of the active ingredients (Eg. particle-size distribution and polymorphic form.

●      Homogeneous mixing of excipients.

●      Minimize microbial contamination and cross-contamination.

Global Demand by Application

• Health conditions of the 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 an aging population is a key driver for drugs being launched in capsules as it becomes easier and convenient to use the prescribed therapy. Also, pharma companies partner with capsule manufacturers to use empty capsules in clinical trials as the process requires providing a specific dosage of the 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 applications, such as moisture retention on the skin have been launched by cosmetic companies in capsules.
• The changing demands of the empty capsules market are expanding the types of capsules that are being used in drug development and manufacturing. Although the most common dry filled capsule is a hard gelatin capsule shell, the industry also manufactures hard hydroxypropyl methylcellulose or hypromellose (HPMC) capsules. Liquid-filled capsule manufacturers use a hard empty gelatin capsule.
• An empty HPMC capsule has very low moisture content and is stable in low humidity. They are better suited to moisture-sensitive contents. Empty Hydroxy Propyl Methyl capsules are also not of animal origin and hence suitable for products that are marketed as vegetarian. They are also not susceptible to contamination of organisms from bovine sources as an empty gelatin capsule would be.
• Fish gelatin capsules are one of the preferred pharma raw materials for fish oil and marine-based supplements. The industry also uses vegetable capsules that are made from potato starch for applications where the enteric coating is desirable. Capsule shells made from tapioca that have been fermented to pullulan are also used.
• Liquid filled hard capsules (LFHC) that are made of gelatin or HPMC are suitable for an oral solid dosage form capsule of a paste, suspension, non-aqueous liquid, or hot melts. LFHC capsule shells can also contain tablets or pellets. Soft gelatin capsules or SGC are thicker than a Hard Gelatin Capsule but are also more plasticized by the addition of polyol. They are also treated with preservatives to prevent fungal growth.
• Coni Snap Capsules are a type of hard gelatin capsules (HGC) that have a unique design that makes them easy to fill and reliable in sealing. They are very widely used now. The locking rings of this design make certain that there is 360-degree locking and sealing of the contents.

Feedstock Market Analysis

• The global Gelatin market was 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 remain the major raw material sources of gelatin, together contributing to approx. 70 percent of the gelatin market.
• Feedstock Contribution in Total Gelatin Market
• Aging population and increasing nutraceutical market are expected to drive the gelatin market.
• With the gelatin industry being consolidated (top 7 players hold 65-70 percent), the buyer does not have much 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 and 1 year as well.

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. The 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. Capsule 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 a regional market snapshot of Europe, North America, and Asia. It lists out the industry drivers and constraints and gives Porter's five forces analysis of the empty capsules market. It does a cost structure and pricing analysis and provides information about EGC, GMP, empty hydroxypropyl methylcellulose capsules, gelatin capsules, Coni Snap, industry trends, and best practices The report lists and gives a profile of the key empty capsules suppliers like Roxlor, Natural Capsules Limited, etc.