8 Reasons to Work with a Food and Beverage Co-Packer
- Lower Costs
- Increased Capabilities
- Standards Compliance
- Warehousing Options
- Sourcing Supplies
- Packaging Solutions
- Scaling Made Easy
- Inventory Management Systems
It’s safe to say brand owners care about their companies more than anyone. When it comes to food, ownership of every stage of the supply chain is an ideal every product brand strives to reach or, at the very least, portray to their customers. In reality, the best way to manufacture and package a food and beverage product is to work with a co-packer.
What is a Co-Packer?
A co-packer is a company that specializes in packaging, and often manufacturing and distributing, products for other brands. Co-packers typically play support roles for product entrepreneurs seeking to launch brand offerings in stores or online.
1. Lower Costs
Food production is costly. Manufacturing food and beverage products requires expensive machinery, specific materials and experienced operators. As co-packers are in the business of manufacturing and packaging products, they have already made capital investments vital to producing massive quantities of branded items. Even if you decide to bring in a few machines to manufacture or package a product, chances are you will only yield slim cost savings until you scale your brand to justify bringing production in-house.
2. Increased Capabilities
Let’s say your brand decided to buy a machine required to manufacture a product, hired an operator to run said machine and purchased all necessary packaging supplies. What would your company do if you needed to expand your product line?
Co-packers are often capable of completing a diverse array of product manufacturing projects. For instance, a hot-sauce packager may also manufacture and bottle ketchup, mustard or other condiments. When you partner with a co-packer, your possibilities for product line expansion increase.
3. Standards Compliance
Apart from all of the common logistics streamlined by working with a co-packer, certification and safety standards are also simplified in the process. Some important standards to consider are:
• Safe Quality Food (SQF) – Established in Australia in 1994, SQF is an international gold standard certification for food manufacturing. Although not necessarily a required certification for food safety, some larger retailers require SQF certification for product line consideration.
• Hazard Analysis and Risk-based Preventive Controls (HARPC) – This standard was set by the Food Safety Modernization Act (FSMA) in 2011. This sweeping food safety regulation requires large-scale food and beverage vendors to implement strategic contamination prevention steps and meticulous raw material documentation.
• Organic – This certification is only required if you plan on offering a certified organic product. With some exceptions, both your company and the co-packer are required to be organic certified. It’s recommended you contact an organic food and beverage certifier before deciding whether or not to offer an organic product.
• Kosher – Several levels of kosher certification exist. It’s vital to research these variations before contacting a kosher certifier. Sometimes, organic certifiers double as kosher certifiers.
The above are only a few important certifications to consider when identifying a partner co-packer.
4. Warehousing Options
Apart from manufacturing costs, keeping a fully stocked product entails purchasing a large space that meets industry standards. If your new brand is like most, you probably don’t have a million dollars lying around to spend on warehouse space.
That’s where co-packers can help in a big way. As co-packers require ample space for machinery and materials, they often also purchase room for storage. Most co-packers will offer to warehouse your products, often at a fee.
5. Sourcing Supplies
As previously stated, co-packers are mostly involved with the manufacturing and packaging of products. However, on occasion, co-packers also have built a helpful supplier network, and can source materials for your project.
Let’s say you need a particular milk alternative for your shelf-stable iced coffee brand. An experienced co-packer will know different supply companies from which to source this ingredient. Since co-packers typically make their money from the manufacturing of a product, they usually won’t tack on ridiculous margins to requested materials.
6. Packaging Solutions
There are two facets to packaging that can be challenging: costs and requirements. Luckily, co-packers can help with both of these issues. As co-packers purchase packaging in large quantities, they can often build in the price of packaging at a lower cost into your overall price per unit.
Additionally, experienced co-packers will understand nutritional label requirements and other standards you will need to consider. As these companies typically work with a variety of food and beverage clients, they understand common caloric and ingredient formats.
7. Scaling Made Easy
Let’s say you’ve developed a product line that keeps selling out. Your brand may be ready to scale. How do you expand your business without incurring monumental capital injections? One way to scale is to use a co-packer!
These packaging companies usually offer generous price cuts at higher order quantities. Additionally, co-packers often have the capability to distribute your product to distinct locations and clients. Scaling your product lines with a co-packer streamlines material purchasing, changing distribution requirements and accounting for new packaging demands.
8. Inventory Management Systems
One of the most important and underrated services a co-packer offers is inventory management. Inventory management is one of the most confusing and daunting processes for brands, especially for those with multiple product lines.
Co-packers keep meticulous records of your inventory to ensure you have enough stock for your clients. These manufacturing and packaging companies are invested in carefully cataloguing your inventory, since they are at least partially responsible if anything goes missing.
It’s recommended to maintain consistent communication with co-packers about inventory levels, since co-packers can sometimes experience a backlog. The last thing you want is to experience a delay due to a product shortage.
Streamline Your Product Manufacturing with a Co-Packer
From lowering costs to managing inventory, working with a co-packer can relieve a ton of stress if you’re a food or beverage brand owner. It’s vital to carefully review a co-packer’s certifications to ensure they can manufacture your product. With the right co-packer, you can quickly and effectively scale your business while keeping costs in check.
