No More Powder For New Supplements?

LOL, long responses seem to be the norm for me!

Sorry if I wasn't clear. The labor for the final step, putting the capsules in the bottles or the powder in the jars, is double for powders. That's only part of the cost that goes into capsules. The labor to put the powder into the capsules is another piece for that side of things, plus the cost of the capsules themselves. We've had to use much more expensive veggies capsules, as every time we have tried to change suppliers to cut costs, we regret it. They either break in the encapsulation process, or crack easier later in the bottles. We just stick with our main trusted capsule supplier now, and they are more expensive. We'd save a lot of money going bovine gelatin, but most customers have said they want us to stick with veggie caps. Our production process is split into two parts: formulation and manufacturing on one side, then final packaging on the other. Powders obviously don't need to go through formulation and manufacturing, as they are not going into capsules/tablets. This means they don't have that side of the labor cost. Once capsules/tablets are made and tested, they go into raw material storage with the powders. Then final production takes those and puts them into finished bottles/jars. Our bottleneck is in that final production process of making the finished bottles.

Also, frankly we were pricing our powders using an incorrect calculation for labor costs. We factored in the labor cost for what it would take to run a job on our filling line. Well, unbeknownst to me, the amount of time it takes to set up and clean that machine line only makes sense if you are doing larger runs of powders. That's generally 1,000 jars or more of the same product at a time. Since powders are not selling super well, my production team was switching over to mostly manual filling, as the sales volume wouldn't justify having 1,000 units of the powders on the shelf. They just wanted to get jobs done and and keep things in stock, so they shifted to make it work with what they had, not thinking about the efficiency aspect of it. This means literally manually filling jars with scoops one after the other. The larger the jar, the longer it took them to scoop it in and check weigh it. Since I am not over in production everyday watching the process, I was not aware that this is what was happening. I bought us one of the coolest auto-filling powder lines years ago. It's actually one of two in the entire world like it. It was custom made for us by All-Fill, and can accurately weight 0.5 gram all the way up to 1kg amounts within a 2% tolerance. I didn't know it at the time when I told them that's what I wanted, but that's a crazy requirement! A German company had to custom make a $10,000 load cell for it to be able to handle that range within the accuracy I wanted. The issue is that it is a very large machine that needs to be setup and cleaned in a specific way. We also have to have stronger techs run it, as it requires lifting to load the hopper. This means it doesn't make sense to run for small runs of powder jars. So while the machine is really cool and efficient, it is only useful for larger jobs. This left their only other option as manual filling. Now that I understand the situation, we are working to get some smaller table top auger filling machines to bridge the gap.

The other reason powders can cost less is the amount you are getting. Larger amounts of powder allow us to amortize the fixed costs over a larger number of doses. This helps get the per dose cost down. Well the main problem with that, now that you know about the manual fill situation, is that larger powder sizes just take us even more labor time. So what we thought was a way to amortize the fixed costs better actually turned out to be a huge inefficiency in the production process. This meant we did not fully understand our actual costs that went into these units. Amortizing the fixed costs over a larger amount of doses is also why we have started offering 365ct capsules and tablets, too. Well, that sounds like a big brain idea from me, right? LOL, well reality is always more difficult. On the surface, doing larger bottles to amortize the fixed costs better makes a ton of sense. However, the capsule bottling lines we have are made to operate in a specific range for efficiency. They are fast at filling 30-90ct bottles. When you start to push the capsules/tablets per bottle higher, it slows down that line a lot. It's just the design of the machine, which is a rotating disk type counting machine. Here is an example of what I am talking about. You can see it rotates and sends a single line of capsules/tablets down to a dual switch nozzle to fill the bottles. To fill a 365ct, it has to sit for the time it takes for that line of capsules/tablets to push 365 of them. The limitation is the rotation speed of the disk. The faster you go, the less accurate the machine is, so you have to balance the speed with the accuracy you want. This means running that disk slower. My team raised that issue a little earlier at least, so I was aware of the machine efficiency issue. The solution to that is to move to a vibrating channel counter instead. This has a bunch of channels that the capsules/tablets scoot down using vibration, which allows for faster filling of larger bottles. This is what I am talking about. So you can see you have 8 channels of capsules/tablets moving with vibration instead of one line of them using rotation. To increase the speed even more, you can move to a 16 channel two station one, like this. The drawback of these machines are they are more complex, so they take longer to setup and clean, along with how much maintenance they need. So you can see how seemingly little changes we make to offerings have a big effect on the efficiency of the process that goes into making the products. We are always improving, but it's a moving target. I make these higher level decisions with the information I have available at the time, thinking it will improve things for my team and our customers. However, I don't see the ripple effects through our process till months after we implement them. Fun stuff!

As to your other question, yes. We might add powder versions of things we previously released in capsules later. If we can see the product is popular, and the demand for powders might justify it, we can absolutely add in the powder option later. That can be hard to predict, as sometimes things I think will be popular are not, and other times things I think will be slow sellers surprise me. There is no replacement for releasing something and seeing how the community responds first.