Burgeoning new market for company
The new plant, which will enclose almost 120,000 square feet (11,000 m2), is located about a 1.5 hour drive south of Tel Aviv. The facility will join the company’s existing plant and is expected to be up and running in mid-2023. TopGum only entered the gummy supplement space in 2019, and had previously concentrated on manufacturing confectionary products since its founding in 2004.
The new facility will feature robotic systems and other automation. The company said it will be compliant with FDA and TGA standards.
“The deployment of such state-of-the-art systems will not only triple our production capacity, but also will raise the quality of the gummy supplements a level higher,” said Amichai Bar-Nir, CEO for TopGum. “We will continue to channel investment in manufacturing and packaging infrastructure together with automation systems to constantly improve production efficiency and technological superiority.”
In early 2021 the company formed a US subsidiary called TopGum Inc. with a base in New Jersey. At that time the company had secured additional investment from an Israeli private equity group called AP Partners Fund.
TopGum was entering the US market on the heels of the launch of its Gummiceuticals line which is a patent-pending formulation is based on a dietary prebiotic fiber. The company said the resulting gummies use no f no added sugars or sugar alcohols and can be labeled as “sugar free” in the US. The Gummiceuticals line is billed as clean-label, vegan, and gluten free, without compromising on the sweet flavor and enjoyable experience of consuming gummies.
Revolution expected to continue
TopGum cites research that indicates the gummy delivery revolution is fare from over. Innova Market Insights reports that group 18-25 age prefers gummy supplements over all other supplements format (including functional food and beverages) while 26-35 group prefer functional food & beverages and gummy supplements to classic supplement formats. Over the first eight months of 2021, one quarter of vitamin and mineral launches were gummies. Gummy supplements have experienced double-digit growth (CAGR 16%) from 2016 through 2020. Vcaps (vegetarian caps) were 21% of launches (2021 YTD), up 5% in launch count CAGR.
Other brands are scrambling to compete with TopGum in the lucrative North American market. In December UK-based Vegums announced it was bringing its vegan gummy supplement products to US shores.
The move toward solid delivery formats has affected the supplier outlook, too. In 2019, pea protein supplier Puris stated advertising a pea starch ingredient that could be used as a vegan gummy binder.