Empty Capsules Market 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

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 source 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