Nutrition meets pharma: TopGum acquires PLD to expand US gummy manufacturing

Gummy dietary supplement provider TopGum has completed its acquisition of pharmaceuticals company P&L Developments’ (PLD) gummy manufacturing operations for US$35 million. 

The transaction was first announced in January this year and extends TopGum’s US presence and the emerging pharmaceutical gummies market.

The strategic commercial agreement entails that PLD will commercialize and distribute TopGum-manufactured products to US retailers under store-brand labels.

TopGum anticipates the transaction will reinforce its position as a leading innovator in the field. Through the acquisition, the company gains a US-based manufacturing platform, built up to US FDA pharmaceutical standards. 

The site is among the few globally to have reached operational manufacturing capability for pharmaceutical gummies, adds the company. The facility will also manufacture dietary supplements.

A strategic shift

The companies say that combining their operations taps into two structural shifts in the US consumer’s health market: the accelerating migration of vitamins, minerals, and supplements (VMS) with pharmaceutical products into “enjoyable dosage forms” such as gummies. It also taps into increasing retailer and brand demand for US-based supply chains.

Eyal Shohat, CEO of TopGum, says this is a strategic transaction that gives TopGum a unique foothold in the emerging pharmaceutical gummy market and reinforces its positioning as an innovative company in its field.

“The transaction positions TopGum as a unique player with an advanced global manufacturing platform, built to serve the largest dietary supplement brands in the US with local manufacturing. Partnering with PLD, one of the leading generic pharmaceutical companies in the US, gives us access to leading retail chains and accelerates our growth in this market.” 

“The fact that a significant portion of the consideration is contingent and share-based reflects PLD’s confidence in TopGum’s strategy, capabilities, and long-term growth trajectory. The pharmaceutical gummy category is in its earliest innings, and we believe it will follow the same arc the dietary supplement market followed over the past 15 years, when the gummy format became the dominant one,” Sholat adds. 

The companies say that combining their operations taps into two structural shifts in the US consumer’s health market.More gummies to market

The deal brings benefits to both parties. For TopGum, the facility’s infrastructure allows for a doubled production capacity, creating meaningful expansion headroom without significant incremental investment.

Meanwhile, the deal transfers PLD’s specialized manufacturing assets to TopGum while PLD maintains its ability to bring high-quality gummies to market. It also secures PLD’s access to TopGum’s portfolio and development pipeline for US partners, speeding up the delivery of gummy formats to retailers for VMS and pharmaceutical categories.

“At PLD, we see gummies as an emerging platform for delivering healthcare across VMS and pharmaceutical products, which customers and consumers are increasingly asking for. This transaction gives us the ability to serve that demand at an even more aggressive speed and scale,” says Evan Singer, president of PLD.

“The deal structure itself is creative and delivers on two priorities at once: putting a purpose-built, FDA-compliant gummy manufacturing platform into the hands of a global category leader who will scale it, while securing PLD privileged access to TopGum’s portfolio and development pipeline for our US customers. We expect to be bringing TopGum products to our retail partners in the coming months.”

Last year, TopGum acquired Island Abbey Nutritionals, a contract development and manufacturing organization specializing in supplement gummies and lozenges, located in Prince Edward Island, Canada. The acquisition expanded TopGum’s manufacturing and technological capabilities in the nutritional gummy space, creating an integrated supply chain with production, bottling, and warehousing capabilities across the US and Canada.