What is Co-packing and How Does it Work?
- What is Co-Packing?
- What Services Do Co-Packers Offer?
- Why Should You Partner with a Co-Packer?
- How Do You Choose a Co-Packer?
If you’re a foodie, chances are you have dreamed up numerous products you believe should be offered in grocery stores. Perhaps you’ve thought of a hot sauce with the perfect spice level or a carefully balanced salad dressing. Have you ever pondered how to take that idea further? By working with a co-packer, you can bring your product vision to life.
What is Co-Packing?
If you’ve been to a grocery store and purchased a generic brand of your favorite cereal, then you have definitely purchased a co-packed product. Co-packing is the manufacturing, packaging and labeling of products for other brands.
A company that co-packs is referred to as a ‘co-packer’. When it comes to food, co-packers often provide both raw materials for manufacture and product creation. That being said, each co-packer has different capabilities.
What Services do Co-Packers Offer?
Let’s say your brand has decided to partner with a co-packer. Before deciding which co-packer to choose, it’s vital to understand the distinct services co-packers offer:
• Product Design – Co-packers often have internal teams assigned with designing packaging while considering machine and product size requirements.
• Warehousing – Space is expensive. Co-packers will usually accommodate client requests to warehouse their products. Some companies offer this service for free whereas others charge a small monthly fee.
• Distributing Products – Will you need to ship your products to multiple locations? Most co-packers offer distribution options. This aspect makes preparing your items and shipping them easy.
• Label Printing – If you’re a startup, you probably don’t have access to high quality label printers. Some co-packers have in-house design teams and commercial equipment to ensure your product looks professional.
• Fulfillment – No more packing orders by hand. By partnering with a co-packer, you may be able to wrap fulfillment into the unit cost.
• Manufacturing – In addition to packaging products, many co-packers also provide food manufacturing services. This way, brand owners can “one-stop-shop” to develop their brands. Even if a co-packer doesn’t delve into product creation, chances are they will still know a few contacts who do.
It’s recommended to copy the above list and ask your potential co-packer if they implement all of these pieces of the product manufacturing timeline. If the co-packer does not perform some of these tasks, it’s worthwhile asking them for a referral to a trusted company to execute any of these aspects.
Why Should You Partner with a Co-Packer?
If you already established a food or beverage brand, you know how much hard work goes into making the wheels turn. Pitching to store chains, ensuring quality control, applying for certifications and harassing freight companies to make sure products are delivered on time are just a few demanding tasks required to run a food or beverage brand.
There are various ways a co-packer can help:
• Strict Standards – Although hand-packaging a food or beverage product may do the trick when pitching to small boutiques, larger stores and chains will require up-to-date certifications. For instance, big box stores like Walmart and ShopRite may want your manufacturing to be Safe Quality Food (SQF) certified. Many co-packers maintain this stringent food safety standard.
• Storage – As your business grows, you’ll need more space. If your company is just starting out or isn’t ready to scale, purchasing or renting a warehouse might be off the table. Co-packers need large spaces to operate bulky machines and store materials, so they typically have enough space to store your product.
• Pricing – Smaller margins are justifiable when brands are just starting. However, as your company scales, you will doubtlessly need to cut costs. Retail stores might want to charge your brand a percentage of sales in exchange for putting your product on their shelves. You may need to take a profit cut in cases of emergency shipping. Co-packers offer relatively lower prices on supplies, packaging materials and manufacturing, adding more padding to your bottom line.
• Efficiency – Operating your business and manufacturing your product on your own simply isn’t efficient. Stressing your company systems can lead to costly errors and delayed shipments. Partnering with a co-packer delegates the anxiety-inducing aspects of product manufacturing to a trusted company, yielding fewer mistakes and improving your throughput.
How Do You Choose a Co-Packer?
Although co-packing is incredibly helpful for entrepreneurs starting a product line, it can be difficult finding a co-packer. To properly identify the right co-packer, it’s vital to consider:
• Capabilities – This point is pretty obvious, but it needs to be stated. If you’d like to develop a hot sauce brand, it’s important to ask a potential co-packer about bottling options, recipe offerings and custom selections in advance. Whatever product you’d like to create, it’s vital to make sure they are ready to take on our project.
• Reputation – Verifying a co-packer’s reputation can be tricky. Checking Google reviews is a good starting point to get a general idea. To best verify a co-packer, it’s recommended to sign up for a service like GhostLabel that validates co-packers and ensures your product is manufactured to your desired quality and specifications.
• Certifications – It can be easy to get excited about a co-packer’s offerings. However, before pulling the trigger, make sure to ask for a copy of their current certifications if you require them. For example, if you’re developing an organic potato chip brand, it’s recommended you review their organic certification before purchase.
• Turn-Around Time – Project timeline will vary from co-packer to co-packer. Make sure to ask co-packers for their projected turn-around times in advance. You don’t want to miss an important deadline with a valued client.
Build Your Brand with Co-pack Manufacturing
As a co-packer can streamline most of the processes involved in product development, it’s well-worth your time to research partnering with a co-packer. You can potentially cut costs, warehouse products, distribute lines and easily ensure quality.
Interested in working with a co-packer? Reach out to us here.
