SOCMA releases 2024 Contract Manufacturing Outlook Survey results

The Society of Chemical Manufacturers & Affiliates (SOCMA) has released its 2024 Contract Manufacturing Outlook, which “compiles industry data specific to the specialty and fine chemicals and contract and toll manufacturing sectors to provide insight into the buyer/toller relationship,” as detailed in the report​.  

As “the only U.S.-based trade association solely dedicated to batch manufacturing in the specialty and fine chemicals industry,” SOCMA is “uniquely positioned to compile and customize industry data for the specialty and fine chemicals market” like those detailed in the report, which is “a component of the association’s robust commercial services and industry intelligence resources program, including the SOCMA Trade Show and Lead Sheet Service,” the report said.

In partnership with Vault Consulting LLC, SOCMA conducted a survey of organizational and industry network members to collect and analyze information regarding “high-demand chemistries and technologies, immediately available capacities in the industry, Geographic Location / Market Segment, and Labor & Investment Trends” to inform the report’s conclusions.

To learn more about the report’s findings and its determinations as applicable to the cosmetic and personal care product industries, we spoke to Jennifer Abril, SOCMA President and CEO for her insights.

Methodology

As detailed in the report, the SOCMA’s 2024 Contract Manufacturing Outlook survey was prepared by partner Vault Consulting LLC and “was distributed via email to 129 companies in SOCMA’s industry network and shared on social media with both member and non-member companies.”

The survey “collected information on issues such as high-demand chemistries and technologies, immediately available capacities in the industry, and labor, investment, and business trends,” and in response, “more than 40% of SOCMA’s manufacturer members and 13 non-member companies participated in the survey,” the report said.

To prepare the data for analysis, “Vault research analysts reviewed each company's survey data for obvious quality concerns, clerical errors, and missing data, then contacted participants to discuss all questionable items.” Following this process, “the agreed upon data edits were incorporated into the final database and this report,” and “responses are categorized by Market, Company Type, Geographic Location and Revenue,” explained the report.

General results analysis

In its Executive Summary, the report stipulated that overall, a positive outlook is anticipated in the coming year. For example, the report illustrated that “the data reveals a pronounced trend of capital investments among both tollers and their customers, [as] 75% of customers are planning to invest in capital expenditures in the upcoming year to facilitate the expansion of new projects and 95% of tollers are preparing to bolster business growth, including projects that are tailored to specific customer initiatives.”

Amongst the report’s key findings was the determination that “all survey respondents, regardless of classification, stated that they are projecting flat or increased sales for the business units in their company, including line products and contract manufacturing/tolling.” Further, the report stated that “no respondents projected a decrease in sales for any of their business units.”

Additionally, the report revealed that “there is alignment between the attributes customers are looking for in a toller and the value proposition tollers emphasize when selling their services,” which is also indicative of a positive outlook for 2024.

Determinations specific to cosmetics and PBC industries

Of those who responded to the survey, “60% said they participated in the Personal Care/Cosmetics markets,” shared Abril, and a further “37% of tollers responded that they are cGMP certified.” Focused analysis of the data revealed that “in the realm of cosmetics and personal care, a notable data point emerged—there exists significant untapped potential within the U.S. personal care products sector,” she explained.

Considering that “at the core of SOCMA's mission is the commitment to bridge the divide between the capabilities of U.S. specialty chemical manufacturers and the evolving needs of their customers,” Abril elucidated, it is therefore important to note that “the Outlook Survey made it clear there are underutilized capabilities” in the industry.

As evidenced by the data, she further shared, “while 37% of tollers boast cGMP certification, a noteworthy 30% of customers say they face hurdles when outsourcing products that necessitate facilities with regulatory certifications like GMP.” Therefore, she concluded, “closing this gap remains pivotal in securing the nation’s supply chain and ensuring industry capacities are meeting customer demands.”