Private LabelManufacturingOTC

From Stove to 1,500-Gallon Tanks: What Boutique Brands Teach Pharmacies About Scaling Private-Label OTCs

ddrugstore

2026-01-31

9 min read

How pharmacies can responsibly scale private-label OTCs—lessons from Liber & Co.'s stove-to-1,500-gallon journey for safe, compliant growth.

From a Stove to 1,500-Gallon Tanks — and What Pharmacies Can Learn

Hook: Pharmacies want more margin, stronger customer loyalty, and control over product quality — but they also worry about regulatory risk, sourcing headaches, and inconsistent dosing. Liber & Co.’s journey from a single pot on a stove to 1,500-gallon production tanks shows a repeatable path: start small, insist on traceability, and build quality systems before you scale. That playbook translates directly to pharmacies launching private-label OTCs and wellness formulations in 2026.

The short version for busy pharmacy leaders

The fastest route to a compliant, profitable private-label OTC or wellness line is to: classify the product correctly (OTC drug vs dietary supplement vs compounded Rx), pilot production with documented recipes and third-party testing, choose the right manufacturing partner (or invest in a verified in-house line), and lock down label compliance and post-market surveillance. Do each step deliberately — the cost of skipping documentation or misclassifying a product is far higher than the cost of a sound plan.

Case study: Liber & Co. — DIY culture that scales

Liber & Co. began with friends and a single test batch on a stove in Austin. By 2026, that willingness to learn-by-doing remained core even as production scaled to 1,500-gallon tanks and global distribution. Two practical lessons stand out:

Hands-on R&D: The founders learned flavors, process variability, and supplier quality by making, tasting, and recording. That discipline translated to repeatable recipes when they scaled.
Operational humility: They handled manufacturing, warehousing, and ecommerce in-house early, which forced them to formalize SOPs and quality checks — the same controls pharmacies need for safe OTC or wellness production. See our operations playbook for practical frameworks: operational playbook.

“You can’t outsource being a foodie or understanding flavor. If something needed to be done, we learned to do it ourselves.” — Chris Harrison, Liber & Co. (paraphrased)

Why private-label OTCs and wellness products matter for pharmacies in 2026

Private-label gives pharmacies control over margins, brand positioning, and supply chain resilience. In 2026 consumers expect traceable, clean-label wellness items (syrups, tinctures, topicals) with clear sourcing stories — the kind of authenticity Liber & Co. built. At the same time, regulators and consumers demand robust testing and accurate labeling. That combination creates opportunity for pharmacies that do the work early.

Key 2026 trends to factor in

Demand for traceability: Shoppers want COAs and origin stories; blockchain-enabled traceability and QR-code batch info are mainstream.
Regulatory scrutiny: FDA attention to OTC monograph compliance and supplement cGMP enforcement increased through 2024–2025. Pharmacies should expect continued inspections and public enforcement in 2026. For security-minded product teams, see case studies on supply-chain defenses: red teaming supervised pipelines.
Digital manufacturing tools: Cloud batch records, AI-assisted formulation optimization, and predictive shelf-life modeling speed R&D cycles.
Sustainability: Recycled packaging and supplier environmental reporting affect buyer choices and contracting — the packaging and delivery lessons in adjacent food and delivery sectors are instructive: sustainability in food delivery.

Before you start: classify your product correctly

The single biggest strategic decision is how the product will be regulated. That choice determines labeling, manufacturing standards, testing requirements, and the pathway to market.

Common classifications and what they mean

OTC drug: If the product makes claims to treat or prevent disease (e.g., cough suppressant), it may fall under an OTC monograph or require an NDA. OTC drugs must meet drug cGMP (21 CFR Parts 210/211) and use an approved Drug Facts label.
Dietary supplement: If marketed for structure/function (e.g., "supports throat comfort") and not to treat disease, it's often regulated as a supplement and must follow dietary supplement cGMPs (21 CFR Part 111) and use a Supplement Facts panel.
Compounded prescription: If a product is prepared pursuant to a valid prescription for an identified patient, compounding rules (503A/State boards) apply — not suitable for retail OTC sales.
Cosmetic/topical wellness: Products focusing on appearance or topical comfort may fall under cosmetics rules, but claims must be carefully worded to avoid drug classification.

Actionable step: Engage regulatory counsel early. A short regulatory classification memo (1–2 pages) will save months of rework.

Roadmap: from concept to compliant scale

Here’s a practical, step-by-step playbook based on Liber & Co.’s scaling logic and best practices in 2026.

1. Market & formulation research (0–2 months)

Define target customer, margin goals, and price point.
Decide product classification (OTC, supplement, cosmetic).
Prototype 3–5 formulations at benchtop scale. Document every parameter (time, temperature, pH, ingredient lot).

2. Sourcing and supplier qualification (1–3 months)

Prequalify ingredient suppliers: require Certificate of Analysis (COA), supplier audits or completed supplier questionnaires, and sustainability credentials if required by your buyers.
Ask for stability and microbial data for botanicals and extracts.

3. Pilot production and stability (2–6 months)

Run pilot batches at 10–100L to validate scale-up behavior. Viscosity and heat transfer scale non-linearly — test not guess.
Start accelerated stability testing (40°C/75% RH) and real-time shelf-life studies. Define expected shelf-life and storage conditions.

4. Manufacturing decision: in-house vs white-label CMO (3–9 months)

Make this decision based on volume, capital availability, and control needs.

In-house: Higher initial cost, more control, faster iteration. Requires certified facility, SOPs, QC lab capacity, and QA staff.
White-label / CMO: Lower capex and faster time to market. Vet partners for cGMP compliance, audit history, and capacity. Ask for recent inspection reports and batch records.

5. Quality systems & testing (ongoing)

Develop SOPs, batch records, deviation logs, and change control.
Establish release testing: identity, potency, microbial limits, heavy metals, pesticide residues (if botanicals used), and stability.
Use accredited third-party labs for complex assays; build a small in-house QC bench for incoming materials and finished-product verification.

6. Labeling, claims, and packaging (2–4 months)

Create compliant labels: Drug Facts for OTC drugs; Supplement Facts for supplements. Include lot number, expiration date, and storage instructions.
Design child-resistant closures if product contains substances requiring them (e.g., certain OTC medicines).
Plan barcodes, SKU management, and packaging for distribution (retail shelving vs direct-to-consumer shipping). For packaging and micro-merch tactics, review packaging & merch playbooks.

7. Distribution, insurance & post-market surveillance (ongoing)

Ensure product liability insurance covers expected sales channels and geographies.
Implement adverse-event reporting: MedWatch for drugs; for supplements, maintain records and report serious adverse events per FDA guidance.
Create recall and communication plans with traceability to lots and customers. Lessons on scaling shipping and fulfillment from beverage brands are useful: how small beverage brands scale shipping.

Sourcing and supplier due diligence — key checks

Not all ingredient suppliers are equal. Use these minimum checks before accepting a vendor for private-label products.

Current COA for each lot and a certificate of origin.
Third-party audit reports (GMP, ISO) or a completed supplier questionnaire.
Microbial and heavy metal testing for botanical ingredients.
Supply continuity plan and alternative sources for critical ingredients. For resilience strategies consider nearshoring and regional sourcing guidance: nearshoring examples.

Quality control: tests you can’t skip

Whether in-house or via CMO, these are minimum QC tests for syrups, tinctures, and many wellness products:

Identity testing (HPLC, GC, or validated rapid method)
Potency/assay to confirm active ingredient concentration
Microbial limits and preservative efficacy for aqueous syrups
Heavy metals and pesticide residues for botanical inputs
Accelerated and real-time stability to support expiration dating

Scaling manufacturing: practical engineering tips

Scaling up is not just increasing quantities. Liber & Co. found that process discipline and equipment choices matter. Practical suggestions:

Run intermediate scale runs. If your pilot is 20L, don’t jump to 1,500-gallon tanks without 200–500L intermediary runs.
Control temperature and mixing shear. Viscous syrups and tinctures can change properties at different tank geometries.
Invest in clean-in-place (CIP) and validated sanitation cycles for food-contact and pharma-contact equipment.
Document yield loss, filtration times, and critical control points during each scale-up run.

White-label vs in-house: decision matrix

Use this short checklist to decide which path fits your pharmacy.

Choose in-house when: you need fast iteration, full supply transparency, or intend large volumes that justify capital investment.
Choose white-label/CMO when: you want low capex, access to established QC, and a faster launch.

Risk management — recalls, adverse events, and legal exposure

Set up these safety nets before you launch:

A documented recall plan with supplier contact info and defined communication templates.
Clear adverse-event capture for both online sales and in-store returns. For OTC drugs, ensure MedWatch obligations are assigned and understood.
Product liability insurance sized for your revenue and geographic exposure.

KPIs, budgets, and timelines (real-world numbers)

Sample timeline to market: 6–12 months with a CMO; 12–24 months in-house depending on permits and build-out.

Ballpark initial investment:

White-label launch (first run + labeling + testing): $25k–$100k
Small in-house line (mixing, bottling, QC bench): $250k–$1M
Enterprise line with large tanks (1,000+ gallons): $1M–$5M+

Key KPIs to track:

Batch pass rate (%)
Cost-of-goods per unit
Time-to-market from prototype
Customer return and complaint rate

Advanced strategies & 2026 predictions

Pharmacies going beyond the basics can use these advanced approaches to differentiate their private-label programs:

Batch transparency: Publish QR-code linked COAs and production notes per lot — a differentiator in 2026. Serialization and token strategies are emerging in adjacent content & supply domains: serialization renaissance.
Subscription models: Integrate private-label wellness products into refill and Rx-transfer workflows for recurring revenue.
AI-assisted formulation: Use AI to reduce time to optimized stability and sensory profile, but always validate with empirical lab data — see real-world AI benchmarking for edge devices: AI HAT+ benchmarking.
Nearshoring and resilient sourcing: Diversify suppliers regionally to reduce disruption risk and meet sustainability goals.

Practical checklist — launch-ready actions

Write a 1-page regulatory classification memo.
Run three pilot batches and document SOPs.
Obtain COAs for each ingredient lot and perform incoming QC.
Order third-party stability and microbial testing for one initial SKU.
Create label drafts and get legal/regulatory review for claims.
Choose manufacturing model and sign a supplier agreement with audit rights.
Buy product liability insurance and draft a recall playbook.

Final takeaways — learning from Liber & Co. for pharmacy success

Liber & Co.’s growth shows that a small-batch ethos can scale when it meets disciplined process control. Pharmacies can leverage that same spirit: start with small, well-documented pilots; insist on supplier transparency and testing; choose manufacturing partners strategically; and never skip label and regulatory review. In 2026, consumers reward transparency and reliability — and regulators are paying attention. Combining craft-level product development with industrial-grade quality systems is the winning formula.

Ready to start?

If your pharmacy is considering private-label OTCs or wellness lines, take the next practical step: produce a 90-day feasibility plan that includes product classification, prototype budget, and a shortlist of vetted CMOs. Need a template? Sign up for our private-label checklist and supplier audit worksheet — or contact our team to review your feasibility plan and supplier contracts.

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