How and When to Find a Co-Packer
Posted on March 25, 2014 by Lev
We recently wrote about food scientist Rachel Zemser, who did a short post on finding a specialty food co-manufacturer (co-man or co-packer, for short).
Although finding a list of co-packers is surprisingly challenging, it's a very small piece of that process.
Am I Ready For Co-Packing?
First, you have to decide that you're ready to move from making your own product to working with a co-packer:
- Are you comfortable having someone else make your product?
- Do you have the capital to fund co-packing? It may be cheaper per unit, but runs are larger and tie up capital.
- Have you outgrown your current kitchen?
- Do need more time to focus on marketing and selling your product?
These are remarkably difficult questions that require you to really think about your food business. And that's before you even start looking for a co-packer.
How to Decide on a Co-Packer
If you are ready for co-packing, you have to start looking for the right one. Ask food business friends, scour the internet, talk to your local university food science department, and compile a list of potential co-packers.
Then comes the hardest part, which is actually evaluating each one:
- Relationship quality - are they good people? Do you get along? What do other customers say? DON'T discount this factor.
- Size - can they handle your production? Is your business big enough for them to care?
- Scalability - if your business quadruples in size, can they handle it? Keep in mind that as your business grows substantially, you'll need to eventually switch co-packers.
- Proximity - are they near you physically? You'll want to visit, check in, and sometimes help, so this is important.
- Cost - is it economical? What are the hidden fees? How does it change as you grow?
- Compatibility - do they have the right equipment and certifications for your product?
Resources for Helping You Through The Process
As you can tell, this is a long and challenging process that can take months. You really don't want to skimp here because it is the foundation of arguably your most important business relationship and investment. We have a couple other useful resources for you.
Our friend Michael Adams of Green Mountain Mustard recently published a great e-book that will help you through this whole process as well as running a smooth operation once you've chosen your co-packer. The Ultimate Guide to Co-Packing will guide you through each of the above steps in great detail, something Michael's done himself several times.
It will explain how to understand the costs associated with co-packing, how to manage your co-packer relationship, how to know that your co-packer is "the real deal", common mistakes to avoid, and much, much more. We highly recommend checking it out if you're thinking about co-packing, and at $19 it's a steal.
Our friends at Right Brain Consulting have been helping food companies find and negotiate with co-packers for dozens of years and have negotiated billions of dollars of co-packing deals for everyone from start-ups to Fortune 500 companies. They're the real pros. They do this every day, know more co-packers and how to find them, and have more leverage with them because of potential future business (so co-packers should treat their clients better), and are simply better at it than someone doing it for the first, second, or third time. They have also published a book on sourcing a contract manufacturer if you're curious to learn more from them without going all out and hiring them.
You can also try a matching service like PartnerSlate.
If you're considering moving your production to a co-packer, definitely take a look at these resources and invest the time to make the right decision.
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