Lots of companies have become wealthy in the dietary supplements business by producing piles of powder. Feedstocks arrived in the form of pallets of herbal materials, carloads of grain or what have you. They left as power-packed ingredients in bags, boxes and barrels.
Pharmachem Labs was such a company, having built a reputation on ingredients such as Phase 2, its patented white bean extract marketed as a hunger controller.
When Pharmachem, a company already strong in dry ingredients, looked around for opportunities to invest for growth, it looked toward the liquid sector. And it looked far to the west of its New Jersey headquarters; in 2009, Pharmachem acquired Alix Technologies of Salt Lake City.
Utah's history as a hotbed of the natural products industry was a key element in the acquisition.
"That's why it's strategically important for us to be in this market," said Peter Hafermann, president of Alix. "It all began here, and because of that, that's where the customers really are. In addition to Alix, Pharmachem has a sales representative that lives here in Utah and helps manage the Pharmachem sales efforts here. So there's quite a significant commitment of assets by Pharmachem to this market."
Hafermann was named to head Alix at the time of the acquisition. He brings a broad range of experience to the position, including stints as CEO of BI Nutraceuticals and Aloecorp.
Alix Technologies offers a similarly broad capability to its customers. The Salt Lake City facility is certified to produce OTC drugs, thereby meeting the standards for nutraceutical manufacture. Alix conducts contract manufacturing and also offers turnkey formulation services for customers.
"We make topical and pharmaceutical products, creams, shampoos, ointments and sunscreens," Hafermann said. "We can make products that would have a drug facts panel, a supplement facts panel and a nutrition facts panel. This facility allows us to play in all of these categories."
Alix is capable of processing 5,000 to 15,000 gallons daily, and packaging in multiple configurations from 2oz. shots to 64oz. bottles, including hot-filled beverages.
Latching on to the growth of liquid products was a key part of Pharmachem's plan when it acquired Alix Technologies.
"If you think about where things have been – tablets, capsules and powders – over the last numbers of years we're really pretty flat. Recently what we've seen is that liquids have just been taking off like crazy. If you look at the number of liquids launches, it's just astronomical. Billions of dollars. You've got so many playing in the market just here in Utah," Hafermann said.
But why are liquids so popular? One answer is the changing nature of the supplements market. Back in the day, one-a-day multivitamins were a huge seller, and purported to deliver on that promise. One small pill a day. Now, supplements are marketed for every health condition under the sun, and dosage requirements for some products require swallowing multiple large capsules a day.
"A lot of these products, the dosages are so high it would take three or four capsules. There's a compliance problem; people just won't do it. But in one ounce of liquid material, you can have many grams (of an active substance)," Hafermann said.
Alix manufactures multi-serving liquid vitamin supplements as well as fortified juice products to address this market. "A lot of people don't want to take tablets and capsules or they can't swallow them," he said.