How To Choose a Co-Packer or Private Label Manufacturer

Trying to find a co-packer who is the right fit for your company and the needs of your company in respect to where it is at in its lifecycle can be a sticky business. Darryl can help you determine whether you need a co-packer, a private label manufacturer or if you should simply build your own manufacturing plant from the get-go.

What Exactly is a Co-Packer?

A co-packer, also known as a white label manufacturer or co-pack manufacturer, is a manufacturer that will make products other than their own under a different label. The challenge is finding a co-packer that already fills in the size you require. If you are selling in pint and quart sizes and the co-packer only fills pints, then it will be necessary to find another to fill the larger size. Also, a co-packer’s typical service is to simply produce product. Asking for assistance in product or flavor development will probably be declined.

How to Find a List of Co-Packers

I would like to say that finding a co-packer is as easy as going online and looking through a directory, but sorry to say it will take more effort on your part than simply that. Over the past twenty years, with dairy facilities closing or consolidating, the amount of small to medium sized dairy plants is less and less. Discovering a co-pack dairy at a trade show is possible, but knowing if they can meet your product requirements is important and only understood by knowing the right questions to ask. As recently as last year, if your brand is accepted by a major retailer such as Sam’s Club, they now require the facility making your product to have in place a food safety program with current certification from a nationally recognized organization such as SQF or GFSI.    

What Kind of Requirements?

Know the requirements and aspects of your product and business, even if you hire a co-packer. As mentioned earlier, the co-packer’s only function is to make your product. Your responsibility and requirements prior to engaging a co-packer are product development, ingredient sourcing, suppliers, package design and labeling, distribution, warehousing, sales and insurance. Finding a co-packer is not a turn-key situation, you’re still the owner of the product and business.  

Why Use a Co-Packer?

Many clients are seeking a co-packer because they want to save money and possibly spare themselves the duty of responsibility. For the sake of this article, let’s talk about choosing an ice cream co-packer. How convenient it would be if every reply to the question was, “sure no problem there are many co-packers out there that would love to take on your business”. But alas, it’s not a simple reply and I suggest that if on the first call someone answers and says, “sure come on over we can do that no problem”, hang up the phone. It’s one thing to find a co-packer, it’s another to determine if they are a good fit to produce your product.

Know Your Business

Don’t believe that simply because you make a product on a small scale, that you have an understanding of the aspects involved in jumping to the next step of a private label manufacturer. Myth one: private label manufacturers are not a full service entity, they simply make the products a client instructs them on. Over the years, there have been fewer number co-packers or private label manufacturers, primarily because of buy-out and consolidation and the ongoing cost to operate and update a facility with continued health regulations. With ongoing pressure from a retail chain buyer, products on the shelf are required to be made in a manufacturing facility certified by a food safety program such as SQF or HACCP. To accomplish this, the manufacturer is required to enhance their facility, infrastructure, equipment, process, and procedure. For many co-packers, the investment and ongoing responsibility is not worth the effort and they simply close their doors. For the remaining that do not care to operate under a food safety program that means operating under a required state health license, which then limits the growth potential of their client. Myth two: simply because a co-packer has been in operation for years without a health or recall issue does not suggest that transitioning to a globally recognized food safety program is easy or less costly.

Am I Ready for a Co-Packer?

Before you contact a co-packer, it is necessary for you to be armed with the requirements on ingredients, packaging, and preferably have prepared a schedule ? and ??. Schedule ? includes the product name, flavor and package size, and schedule ?? contains ingredients with part numbers, authorized suppliers, packaging part numbers, supporting product specification documents and any certifications such as kosher. Which brings me to myth three: a co-packer is not going to analyze your product and find ingredients and packaging for you.

How to Choose a Co-Packer

I believe the primary reason that a co-packer disappoints a client is because they were provided a finished product and story instead of supporting documentation and product details. Additionally, the client may not have a complete understanding of the co-packer’s capability in product development or facility capabilities. When clients tell me they were duped by a private labeler, usually it was the result of the client not knowing the right questions to ask and relying on the co-packers too much. Even though you are the customer, paying the manufacturer does not relieve you of the duty to make your product as required, nor have a lack of understanding of their manufacturing facility. Going to a co-packer does not guarantee your product will be the same as what you made in small batches.

Points to Help Identify the Right Co-Pack Manufacturer

A reputable co-packer or private label manufacturer should have:

  • Posted current health license to operate, issued by the local health department or Dept. of Agriculture
  • Posted certification if operating under a food safety program
  • Insurance certificate including product liability coverage of $1mm – $5mm
  • The latest health inspection report showing a score within one year
  • Good Manufacturing Practices “GMP’s” in place and visually seen in operation e.g. hair & beard nets, gloves, uniforms, wipe while working, staff not eating, drinking or smoking during production
  • A in-house or third party lab for standard microbiology and chemical testing
  • Date code, plant identifier, batch number and manufacturing log in the event a product recall is issued
  • The ability to provide a facility tour at any time

What You Should Have:

  • A non-disclosure agreement
  • Schedule I and II
  • Product liability insurance
  • An understanding of any trade offs or compromise when using an outside manufacturer

Remember, it’s your product with your name, so even if it is produced in an outside facility, that does not make you less responsible for the finished product.  

Hire Darryl to help you find the right co-packer to make your quality product. Remember, “you can’t afford to learn from your own mistakes.”

Call Darryl at 727-851-6229 | Email Darryl