A co-packer also known as a contract packer is a company that manufactures and packages food for other companies. An entrepreneur food company often hires a co-packer to produce for a variety of reasons. The main motivation behind companies choosing to use a co-packer is to reduce the start up costs in overhead, manufacturing, labor, equipment, insurance, research and raw ingredients. Using a copacker can reduce the lead-time in getting a product to market. Co-packers can also help in the formulation, food science, and certification of the desired food product.
What to look for in a co-packer
When selecting a co-packer, seek one that has experience in manufacturing a particular food product. Find out the co-packer’s capabilities in quality control, minimum and maximum size manufacturing runs, receiving and storing facilities, packing and shipping as well as product development services such as product stability testing, nutritional labeling, formulation assistance and ingredient substitution. Inquire if the co-packer uses similar raw ingredients to the desired food product in order to take advantage of the co-packer’s buying power with bulk ingredients pricing and other other supplies. Another important question to ask is the required lead time to manufacture.
Prepare a co-packer checklist to address special needs
Do a lot of homework before visiting a co-packer. Have a business and marketing plan in place which outlines product needs, size, container, minimum quantities and target pricing. Get technical help from a university, a consultant or a testing laboratory to determine the requirements for product stability and safety. Write preparation and process instructions as well as specifications for ingredients, packaging materials, regulatory compliance, and finished product.
- Can the co-packer provide product development assistance such as safety determinations, coloring, stabilizers and emulsifiers, or preservatives?
- Can the co-packer address special product concerns such as; acidity, thermal process, refrigerated ingredients, refrigerated product storage?
- Can the co-packer accommodate specialized ingredients in terms of variety, function, or piece size?
- Can ingredients be purchased ready-to-use?
- Are there alternative sources for specialized ingredients?
- Can the co-packer maintain an inventory of finished product?
- Will the co-packer help with shipping as well as special shipping requirements such as carton labeling, palletizing and routing instructions?
Beware of the disadvantages when using a co-packer
Using a co-packer, has its disadvantages such as the loss of control over the food product. An entrepreneur is at the mercy of the co-packer’s production schedule, their fixed costs, their vendors and their method of doing business. The entrepreneur does not have much flexibility and the product must conform to the co-packer’s equipment and facility limitations.
The food entrepreneur should research and get recommendations on the prospective co-packer. Confidentiality may be an obstacle as formulations, ingredients and product specifications must be shared with the co-packer. The co-packer will have access to sensitive information such as sales, volumes and price. This information can be protected somewhat with agreements, but confidentiality can never be assured.
Resolving disagreements between customers and co-packers are not easy. Disputes and litigation may tie up ingredients, supplies and finished product for extended periods of time. Finding an alternative co-packer who can produce the same product may be difficult.
Using a copacker can be expensive as a copacker must also make a profit. Consequently, the costs associated with co-packed product may be high.
Co-packer Resources
