Episode 81 – Gummy Central: Capacity, Innovation



Joe: On this episode of the "CPG & CBD University Podcast", investment, innovation, increased capacity, producing millions of gummies a day for our in-house brands and private label partners, how does it all come together? And why are the leading brands in the country partnering with us? This is the "CPG & CBD University Podcast" and it starts right now.

I'm Joe Agostinelli, host of the "CPG & CBD University Podcast". If you are a returning listener, welcome back to our podcast. If you are a new listener, we are glad you found us on your podcast platform of choice. Full video episodes of our podcast available on the Global Widget YouTube channel. Be sure to hit that Subscribe button wherever you get your podcasts to receive notifications when new episodes are published.

Alluded to it in the intro, investment, innovation, increased capacity, millions of gummies everyday being manufactured right here, not here on the podcast studio, but here in our in-house manufacturing and distribution facilities. It doesn't all come together overnight though. Here to discuss this with me on this episode, welcome back to our podcast, the Vice President of our contract manufacturing division, Chad. Love it, Chad. Welcome back.

Chad: Thanks, Joe. Good to be back.

Joe: Yeah, so when the word investment is used, we're talking dollars, but we're also talking investing in people, processes to manufacture CBD health and wellness products. Tell us a little bit about all that comes together.

Chad: Yeah, over the past few months, obviously, and really in through 2021, the teams really kind of made a significant investment, the team being executive leadership team, made significant investments in all kinds of areas of our company, for manufacturing, formulations, obviously, the physical equipment that we have in the building, our sales team. Everywhere has grown. Every department in this entire company has grown. So, you know, we've even done it as much as our facilities. We've got three facilities. I mean, we have fourth on the way, actually in the process of moving into that fourth one as well. So all these facilities in the greater Tampa area, you know, everything's within just a few miles of each other.

So, with that too, we've also made significant investments with in-house formulations, our R&D, our manufacturing, shipping, marketing, sales, compliance, you know, kind of really laying all those things in there, is really kind of, you know, this growth and expansive growth, is really coming along with all the expectations, too. So we're seeing a lot of influx of requests from new customers, existing customers. We're seeing expansion in that. It's been really great.

You know, the biggest thing, the biggest area, and we've talked about this in previous podcast too, is our gummy manufacturing, you know. We're really close, really, really close to hitting that 10-million-a-day mark in gummies produced, which is the exciting part of this whole thing for us. And that's just one part of what we do as a business. So, I mean, that piece itself is exciting.

Joe: You know, we just talked about gummies on our previous episode, in last week's episode, if you're following along with our podcast, we talked about expanding the brand. So I invite you to listen in on that. And speaking of expanding the brands, obviously working with our private label partners both on the CBD and now non-CBD side, as we've alluded to, what's it been like over the past year with innovation in products and offerings?

Chad: Yeah, it's been expansive, I guess. That's really the only word I can think of when you ask that question. And that's because of all the different kinds of functional ingredients that are out there now that we're really being, you know, putting in gummies, you know. Gummies' a vehicle, right, you know, and it's a way to take, you know, a product, if you will, and that, what you put in that vehicle, whether it be a vitamin or a mineral or CBD, which is obviously historical, you know, of who we are, those things are all really what's happening, what we're seeing transition.

So you see this like large amount of functionals. We have ingredient, you know, gummies, if you will, that are made right now, products that are made with a single ingredient like apple cider vinegar. But you have ones and others that we also manufacture to have like 18, 19 vitamins and minerals and blends and stuff in there in the same size gummy but in a different gummy all itself. So, this, you know...and this is really credit to, you know, the formulations and compliance teams, and really looking at what's happening. You know, sales, we focus on what's in marketing spokes, what's trending in the marketplace, and we pay attention to those things. We work with our partners that are all in the market, too, and our suppliers.

And we do translate that into actual gummies as, "Hey, this is the product that we either...it's happening now, it's coming in the future, coming in the next few years, not just next few months." So, you know, on top of those trends. But that formulations team that we have back there, that's really gone from just a couple people to, you know, more than 10 now. It's really helped us. It's really helped accelerate that, and right behind is the compliance team, you know. We've got to navigate these waters as we kind of move into these areas with these functionals, and these things that are coming online, these new ingredients. And by ingredients, I mean, different vitamins and products in the market that will be like, "Hey, this really works in this way for me and this works in this way." Well, we've got to research these things, and make sure that these are products that we can put safely into finished goods.

Joe: We'll have more on functional ingredients in an upcoming episode of our podcast, and we've talked to our formulations team back on episode 75. So I'd like you to listen to that episode for more on our in-house formulation team. So let's talk about capacity. You alluded to it. We're approaching that 10 million gummies per day capacity. And you could see those firsthand when showing prospective partners. How has the increase in capacity affected what we're able to offer for our private label partners?

Chad: Yeah, it's fun. You know, I can tell you, just being here since last year, what I've seen in the growth too, myself, I get to share that. And that part, when you get to walk somebody back into the facility and you show them, you know, "Hey, look at this growth, look at this piece of equipment," they get to see the growth of the company, too. So it's exciting for us. When you see this and somebody walks in, we're talking about big box stores, major, you know, major retailers that are coming through our facility to look at, "Hey, what capabilities and capacities do they have?" You know, we're on calls regularly showing these facilities and these opportunities that we can work with these partners, not just short term for small projects but long term for large projects and at scale.

And so, you know, doing $10 million...excuse me, 10 million gummies a day, it's nothing to bat an eye at. That's a lot of gummies, when you start thinking about that on a, you know...an average bottle is about 60 pieces per bottle. So whether it be a CBD product, which is obviously still in that up and coming kind of category of market products, it's the stuff that you and I have been taken for the last 20, 30 years in our vitamin C. And we were taking vitamins as kids, you know. But what's great is like, now you have this great opportunity in terms of working with a company like us and really going, "Hey, I can work with this company."

And a lot of times, like we haven't heard from you or heard of you, but we just kind of showed up on the scene one day, you know. And it's really because we made, you know...the company made the significant investment specifically in this equipment. I mean, look, it's taken over a whole facility. The reason why we need more facilities is because we've got more equipment to put in the, you know, in the existing facilities. And that's really been beneficial for us as growth and exciting of where we're going.

Joe: And what are you hearing from private label brands? And we talked about functional ingredients, but what are you hearing from the private label brands about innovative products and taking advantage of functional ingredients for gummy manufacturing?

Chad: Yeah, it's always like, I want it now, but let's do a temperate approach. Doing it right, you know. And this is where, when I talked about this briefly before about compliance and quality, it's about making sure that we have those right pieces in place, so as we start to look into these ingredients, a lot of times they see and hear it themselves. What are the trends? What are we seeing? Well, everybody wants to be, you know, not necessarily the first in, but they wanna kinda be on the front end of that wave, if you will. And we have partners that wanna do that, and in...but it also requires a lot of, "Hey, let's do some research. Let's spend a lot of time, you know, with compliance, with formulations to make sure that what we're doing and how these things interact with each other, make sure we're giving them a quality product on the end, ultimately." But in addition to that, what I was gonna say too, is what they really want, and I can say from the largest ones, is like it's about quality.

It really is about what are we getting out every single day. We need to make sure we have something that we can put on the shelf we feel comfortable with, and allows us to focus on our business. When we're working with a quality supplier like yourself, we don't have to worry about that. So they don't have to worry about the quality. They don't have to worry about the compliance. They don't have to worry about the supply chain. Those are the biggest challenges we see in the marketplace, and that's a void that we are filling right now for a lot of customers.

Joe: And something I wanted to talk about a little bit more, you know, obviously it was just about a year ago that we introduced you on our podcast and the division, and back then it was CBD, CBD, CBD, CBD. Now we're talking really CBD, and we even just talked about this with the founder of MJBiz on last week's episode, episode 80, but really, CBD is an ingredient, you know. What have you seen in the private label space as the shift from CBD to just overall health and wellness now from some of these private label brands?

Chad: Well, first of all, let me congratulate you. I didn't realize you're already on show 81 now. So that's fantastic, first and foremost. But, with regards to like what we're seeing from the market, you're asking, is really is you've got to stay on top of these consumer trends, you know, really in working with the private label customers really to craft really what's the most effective and quality products that they can find, if you will. There's many different varieties of gummies. There's other products as edibles, topicals, you know, and it's really working with the partners, so really on these unique formulations to kind of find out what's important to them, what they're looking for on the back of all their customers. That's really the most important thing for them.

You know, it's not necessarily like, "Hey, kinda give us what you do. We're just trying to do like everybody else is doing." Everyone wants something a bit unique, if you will, and it's about working with them, and that's what we are. We're a customization company when it comes to private label. That's what we do. I mean, we're seeing a significant increase in that, and people need to know they can come to us. And it's like, we can handle anything. It's a yes game for us. Yes, here's how we make this work.

Joe: And we talk a lot about gummies, but, you know, it's also important to mention on top of the almost 10 million gummies a day, there are obviously other products that, you know, across our in-house brands, but also the private label brands and partners will come to us with, "Hey, can you make this?" Talk about a little bit about the capacity for additional products outside of gummies.

Chad: Yeah, that's a great point, you know. We know and talk about gummies, right. We make so many of them it's easy. Like when you make 10 million or something a day, almost 10 million, you get excited about talking about that, and that's what people want to talk about. And it's easy for the sales team to focus on. But what people need to understand too is that our capabilities in other areas from, you know, an adjustable perspective, there's also capsules, you know. There's great capsule opportunities now too, and those are quick turning products, easy to make such as tinctures, and oil-based products or water-based products that go in like a little tincture bottle, a little 1-ounce Boston Round.

In addition to that, too, we have topical, tons of topical capabilities. But one of our people in R&D has worked for, you know, another facility for 20 plus years. And their job was literally to reverse engineer existing products that are on the marketplace. So someone says, "I want something like this," great news, we have people that fit that, too.

Again, 20,25 years of experience on one person. Forget about the other individuals that work on that team, too. They have tons of experience in the same area. But it's great opportunity for innovation. Again, the topical market, ingestible market, the pet market. So a lot of expertise from the science side. So really, we can really offer really anything. And that's what makes it great too, is that we don't just...we're not a one trick pony. You don't come to us for gummies. Like we do gummies, and oh by the way, we can expand in these other things. Let's start with what your biggest pain point is and we work into these other areas.

Joe: And talk about other areas real quick, we'll wrap up on this and allude to our next episode that's coming up, but are there cannabinoids that we're hearing about when it comes to products?

Chad: Yeah, I want to leave it at this, you know. What's great about CBD and, you know, you mentioned the word ingredient, and CBD itself is an ingredient. It's an important ingredient. And, you know, it is the core of who we are and where we came from as a company. And, you know, we do see a lot of trends and what's great about CBD is it's not just CBD anymore. It is other things. It's CBD plus even vitamins now.

We're getting a lot of that. Or CBD, first with sleep, you know, melatonin and things like that. But there's a lot of training ingredients out there and a lot of popularity, and there's some that are even kind of like, you know, a lot of legality and questions around like delta-8, that's a great product. And, you know, that product itself, I can say, we get a lot of requests for, a lot of interest in, a lot of people asking about that. Then, you know, in the great part is is like there's a lot of interpretation on that. And, I mean, we were close and we stay very close to that, try to determine, you know, with in-house counsel, outside counsel, and obviously truly understand the legality of that, and making sure that we can produce products that are safe, effective, and obviously compliant.

Joe: And we're gonna leave you with a cliffhanger around that, because on our next episode we'll have industry advocate and attorney, Rod Kight as we get all the buzz surrounding delta-8. We'll continue on the next episode of our "CPG & CBD University Podcast", so stay tuned for episode number 82. But Chad, thanks for taking time to come out on the podcast. It's always great to have you, a lot of great information.

Chad: Thanks, Joe.

Joe: And thank you for tuning in to this episode of the "CPG & CBD University Podcast". Don't forget to hit that Subscribe button wherever you get your podcasts for notifications when new episodes are published each week. And plus watch full video episodes on the Global Widget YouTube channel. I'm Joe Agostinelli, host of the "CPG & CBD University Podcast". Thanks for tuning in.

These statements have not been evaluated by the Food and Drug Administration. CBD products are not intended to treat, cure, or prevent any disease or condition. Always consult with your personal physician about CBD and using CBD products. CBD should never be used by anyone under the age of 18. This podcast is not intended to provide legal advice regarding the legal status of CBD and CBD products.