It’s almost a cliché to state this today, but the dental industry is in the midst of a foundational transformation driven by the confluence of technological advances, corporate and venture capital investments, and global economic forces. For many dental laboratories, these changes mean previously successful business models are no longer as effective and new approaches are the best path to future success.
Over the past 5 years, the number of independent dental practices and laboratories has declined, while corporate-backed group practices and dental service organizations (DSOs) as well as multi-location laboratories have gained ground. Between 2015 and 2024, the percentage of US dentists affiliated with DSOs grew from 7.2% to 16.1%.1
For dental laboratories, these changes can be deeply personal, as many dental labs made long-standing relationships with independent dentists the foundation of business success, and ownership passed from one generation of a family to the next.
But as more practices sell to DSOs or join groups, relationships give way to procurement systems and pricing models designed to optimize practice profits. It’s clear that the status quo is no longer a sustainable plan for the future.
“In the past you could ignore new innovations because dentistry was one way. It was monolithic—no pun intended—for like 50 years,” says Joshua Polansky, founder of Niche Dental Studio, a mid-sized dental lab in New Jersey. “Today, if you don’t adapt, I do think you will die. I think that we’re in a different phase of dentistry now where the competition is so brutal. If you’re not keeping up with what’s going on out there with technology, it’s going to be very tricky to survive as a lab today. I’m sorry.”
Megan Nakanishi, owner and head of business operations at Nakanishi Dental Laboratory, Inc. in Bellevue, Washington, agrees that technology is a key part of any dental lab maintaining success as the market changes. At her third-generation lab, they have made sure to use technology not only for production, but also for business operations.
“The best investments in technology lately are not in mills or even 3D printers,” she says. “We’ve had the greatest return on technology that give us better data and analytics on our business, technology that automates routine tasks like case entry, and robust CRM technology that allows us to service our customers more effectively.
While this period of consolidation presents opportunities for labs that can operate at scale and meet the low price/high volume demands of the growing dental groups, smaller labs are finding they can still thrive by adapting to the changing marketplace, adopting innovative technologies, and mastering the core knowledge and skills dentists still need from their lab technicians.
Consistent Group Practice Growth
The rise of the DSO and similar group dental practice models has not happened overnight, but it continues to grow at a steady pace year by year. This growth is fueled by multiple economic factors, but put most simply, operating as a group allows dental practices to lower costs through economies of scale and thus increase profits. This is a model that is attractive to investment capital, providing these groups with the financial resources to support expansion, incorporate new technologies, and attract new patients with professional marketing campaigns. This has proven attractive to clinicians as the percentage of dentists affiliated with private equity-backed practices increased from 6.6% in 2015 to 12.8% in 2021.2
By centralizing administrative functions—such as billing, human resources, and procurement—DSOs make it possible for dentists to focus on seeing patients while experts handle the mechanics of operating the business. Working in such an environment has proven to be an attractive option for many younger dentists who are graduating from dental school with exorbitant levels of debt. In 2024, 26.5% of dentists were affiliated with a DSO within the first 10 years of their practice opening.1
Nakanishi says it is important for dental labs to recognize that quality production will always be valuable, but labs also need to understand what new practice DSOs are looking for.
“We have to adapt to the reality that not all dentists want or need the same relationship with their labs that they did in years past,” she says. “DSO leadership wants data and pricing, while DSO dentists are looking for education and consistent quality.”
Patients, too, are driving this change. Increasingly, they seek the convenience of practices that offer extended hours, multiple specialties under one roof, and seamless digital communication. DSOs are well positioned to meet these demands, giving them a competitive edge over many single-location practices.
Consolidation Among Dental Labs
Parallel to the rise of DSOs, laboratories are undergoing their own wave of consolidation, driven by a similar set of economic benefits. Both regional and national lab groups continue to grow, often through the acquisition of successful, smaller labs. The total number of dental labs in the US continues to drop. In 2013 there were 6,865 labs with a payroll, and by 2023 there were just 5,096, a decline of 25.8%.3
“We have seen smaller labs closing at a very alarming rate in the last 5 years,” Nakanishi says. “Large lab groups are struggling to consolidate effectively. Overall, I don’t see as much merger and acquisition activity in the lab space as I see labs closing doors and other labs picking up the work.”
Technology plays a major role in making this shift possible, she adds, noting that labs that have embraced newer technologies are doing better than those that haven’t. While dental labs used to rely on a client base of local dental practices, digital technology makes it possible for cases to come from anywhere, and the same technologies allow labs to provide these clients with individualized support and communication.
By leveraging digital production solutions including milling and 3D printing, along with artificial intelligence (AI)-driven design and case management systems, it’s possible to create efficiencies that lower unit costs while increasing productivity in a way that pairs nicely with the desires of the DSOs.
Polansky says that while he’s been approached by buyers and groups in the past, his focus has been to invest in the technologies that allow his lab to meet the needs of a variety of clients. Still, he understands why many labs see joining a group as their best option, and he believes group labs will continue to grow.
“It’s gotten a lot harder to pass your lab down to a family member,” he says. “It used to be that you learned how to make teeth with your dad and then when they retired, they passed it down and it was now your lab. Today, with all the technology, it’s brought on more team members, more human resources, more capital, more troubleshooting. It’s more of a business now than an art, I think.”
Finding a Place in the Changing Landscape
For lab owners and technicians, this dual consolidation creates a mix of challenges and opportunities.
On the challenge side, price compression is perhaps the most pressing concern. DSOs, with their large volumes, expect economies of scale and negotiate aggressively on fees. This leaves little room for independent labs to compete solely on price. In addition, many labs find themselves under pressure to adopt digital workflows more quickly than planned, as DSOs increasingly demand digital compatibility. Long-standing clients may also be lost as independent dentists join DSOs and are directed to use preferred labs. And of course, staying competitive requires ongoing investment—not only in technology but also in technician training and skill development.
At the same time, the evolving market creates new possibilities. DSOs represent larger and more predictable case volumes, which can stabilize revenue for labs that can retain profitability while meeting the lower per-unit prices the DSOs demand. Polansky notes that it doesn’t take a giant lab to meet the demands of these group practices. A small operation that understands technology, optimizes digital workflows, and finds the right outsource partners can create a profitable production model that meets the price demands of any DSO.
“The beauty of it is if you’re a pretty savvy businessperson, you can have a lab that does it all today,” he says. “You could do 100 units in a day just by uploading them to an AI software and they come back and then in the morning you’re milling them.”
Although working with DSOs and large groups is an option, only 8% US dental lab annual sales come from those practices, while 24% of sales come from small group practices, and 65% come from solo practices, according to data from the National Association of Dental Laboratories’ Spring 2025 member survey.
Opportunities exist for partnerships—whether with DSOs directly or with other laboratories—to share resources and broaden service offerings. But smaller labs that choose not to compete on scale may succeed by carving out niche specialties—such as high-end esthetic work, complex implant cases, or other large-scale cases that require a level of partnership and customization that is harder for large-scale production labs to offer.
Nakanishi cautions small and mid-sized labs that selling to a larger group lab might not be the viable exit strategy it seems. If the lab owner is integral to the business, the operation might not be as attractive to potential buyers or partners because the value diminishes if that owner steps away.
Staying Mid-sized and Staying Busy
As has long been the case, there is no single way for a dental lab to find success. Labs can certainly look into creating a partnership with a small or mid-sized practice group and hope to become an indispensable partner that grows along with them. Merging or partnering with other labs is also a strategy. Still, remaining independent will always be an option for labs that remain flexible enough to take advantage of new opportunities as they emerge.
That is the approach that is keeping Polansky and Niche Dental Studio busy. His lab has invested in digital technologies including several mills and 3D printers, but they also still offer prosthetics made with old-school techniques and materials, such as feldspathic porcelain. This allows them to cater to a wide range of clients with specialized needs as well as those who submit more routine cases. The lab provides a variety of services at different price points, so they can be competitive with a single posterior crown, while also providing the expertise and skill required to deliver complex surgical cases, and All-on-X full mouth reconstructions.
“I would say that our client base is everyone from a freshly graduated dentist all the way to some of the best dentists in the country,” he says. “Labs still have the power to choose what type of products they want to be producing. There’s clients out there for different sort of products. There’s a client for everyone.”
Regardless of the approach a lab takes when planning for the future, investment in technology is no longer optional. Laboratories that embrace CAD/CAM systems, 3D printing, and AI-driven workflows are not only positioned to integrate seamlessly with the growing number of digital practices, but they also become more attractive as potential acquisitions for growing dental lab groups.
Digital technologies also expand the reach of any dental lab. When a lab is equipped to accept digital impression scans and provide practices with digital case previews, physical location is no longer as important to success. Cases can come from anywhere, and the lab can still offer a level of service and partnership on par with being located next door to the practice.
“Technology has completely uprooted every aspect of our industry,” Nakanishi says. “The challenge for lab owners is knowing how and when to integrate these solutions. Straddling the ‘digital/analog line’ greatly affects our profitability, too, so making these transitions quickly and confidently is paramount.”
For Polanksy, digital technology opens new doors for the practice as he’s now able to share digital previews of his work with his clients, and the adoption of technologies such as photogrammetry and facial scanning continue to add to the precision and detail he can provide. While he admits that new technologies are often large investments for the lab, he makes sure to adopt things that fit the way his lab already operates and expands on exisiting technology platforms so they add efficiencies and expand the lab’s capabilities right away.
“Digital technology has been a huge,” he says. “I can say it’s the reason we are where we are today.”
More than just adopting new tools, forward-looking labs are offering services like digital case planning, guided surgery solutions, and even chairside support for dentists. By becoming a digital partner rather than just a product manufacturer, labs can deepen their value proposition.
“Technology is leveling the playing field, so to speak, on the quality of our products, so we need to differentiate ourselves by providing better training, education, or resources for our customers,” Nakanishi says. “This is a 180° shift from the way labs have traditionally operated, but there’s lots of opportunities in this new model.”
Another pathway to success lies in differentiation. Although high-volume labs can often deliver the lowest unit costs, they may not be able to match the personalized service, technical expertise, or premium esthetic outcomes that boutique or mid-sized labs can provide. Positioning the lab as a consultative partner—someone who can help troubleshoot cases, provide continuing education, or advise on materials—creates loyalty that is hard to displace.
Dentists are faced with a growing number of options when it comes to restorative treatments, and they are not always able to stay up to date on new techniques and materials. When a lab can offer expertise in these areas, they become a partner the practice needs to rely on regularly.
“If you’re not going to communicate and consult with your doctors, I think you’re not going to stay with the times.,” Polansky notes. “Back in the day when we were considered artists, it was almost a given that we weren’t going to talk to you because we needed to be in our little lab creating. It’s not that way anymore. Now we’re more of a technology partner, and in the tech world, it’s all about communication and talking.”
Despite the corporate nature of consolidation, relationships remain at the heart of dentistry. Whether working with independent dentists or those within DSOs, laboratories that stay connected to clinicians will be better positioned to succeed. Offering training programs, hosting continuing education, and providing technical support are all ways labs can make themselves indispensable. In many cases, the lab that goes the extra mile to help clinicians succeed will be the one that retains their business.
Regardless of business and technological strategies, laboratories must adopt a mindset of continuous improvement in order to stay competitive. This includes investing in ongoing training for technicians, so they not only become proficient using the latest digital technologies, but so they also master the foundational concepts that underpin the work done by dental technicians. This way they are ready to produce restorations that meet the same standards of form and function regardless of the tools and techniques being used in the lab.
Polansky regularly does training sessions for his team to not only learn how to use new digital tools and materials, but also to ensure they understand fundamental concepts like principles of occlusion. With those concepts he and his team can make the most of any technology, material, or technique they choose to employ.
“Be 100% dialed in on the foundational concepts of dentistry and understand how to adapt them to whatever tomorrow’s technology brings,” he says. “As long as you understand the complete fundamentals of dentistry, you’re good. Now your goal is fitting that into whatever CAD/CAM system comes out tomorrow.”
Looking Ahead
The next decade will likely bring further consolidation on both sides of the industry. DSOs are expected to expand their market share, while corporate labs may become the default partners for high-volume production. While that market might leave out labs in the middle, Polansky believes there will still be a path to success for both large-scale production operations, and smaller, specialized dental laboratories.
Still, there will be space for all types of labs—regional, boutique, or corporate—if they can articulate and deliver a clear value proposition. The labs that thrive will be those that remain flexible, innovative, and closely aligned with both clinicians and patients. Those that embrace technology, adapt their business models, and position themselves as trusted partners will remain indispensable. Those that cling to old models risk being left behind.
“I would say truly embrace technology, truly understand what’s going on out there and understand what’s going on in the pipeline,” Polansky says. “Be very involved with your clients. Understand their wants and needs and try to cater to them digitally however you can.”
“Dentistry is changing for sure, but we all know the demand for our products and services is not going anywhere anytime soon,” Nakanishi adds. “Doing what we’ve always done won’t suffice in solving the problems of tomorrow. Listen to your customers…to a point. Of course, your current customers are not going to want you to change anything about your lab—they use you now because they like you now—but unless you are planning to retire when your existing customers retire, you better also keep one eye on the future. Stay plugged in to the industry and be open to tech-driven workflows.”
The takeaway is clear: the future of dental labs is not about resisting change, but about finding your place within it. With foresight and adaptability, dental laboratories can not only survive this period of disruption—they can thrive.
“I think labs will come back even stronger in the future,” Polansky says.
References
1. American Dental Association. The U.S. Dentist Workforce. Health Policy Institute. August 2025. Available from: https://www.ada.org/-/media/project/ada-organization/ada/adaorg/files/resources/research/hpi/US_dentist_workforce_2025.pdf.
2. Nasseh K, LoSasso AT, Vujicic M. Percentage Of Dentists And Dental Practices Affiliated With Private Equity Nearly Doubled, 2015-21. Health Aff (Millwood). 2024;43(8):1082-1089. doi:10.1377/hlthaff.2023.00574
3. Statistically Speaking. Journal of Dental Technology. 2025;42(5):6.
