Experts forecast the global contract packaging industry to register a compound annual growth of 15.33% between 2021 and 2026. The main factor influencing this growth rate is the changing preferences of business owners. For instance, contracting the right co-packaging company can reduce operating costs by up to 9%.
A growing industry means more players joining because of the lucrative niche. Thus, finding and working with a co-packer source that is reliable can be pretty daunting.
So, what are your options? Don’t fret. Here is an in-depth guide on how to find a co-packer.
Running a specialty food business can be a very challenging process in the modern market. You have to source ingredients from food producers and test them. You also need to ensure that your commercial kitchen runs at full capacity to meet the growing demand for your product.
Fulfilling all these, primarily if you rely on manual processes, can be very tiresome. On the flip side, co-packers can help you with the production process and help you with industrial mass production. This relieves you to focus on other high-value tasks that complement a successful small food business, such as enhancing customer experience and allowing you to produce a volume of hundreds per product.
However, you don’t just wake up and walk to a facility to contract them as your co-packer. It will help if you’re strategic about the whole process. Remember, your business strategy, goals, and vision must align to have a good experience. Here is how you can go about it.
Are you working with specialty food producers? You would want to begin your research with these people. In most cases, if not frequently, food producers usually work with a reputable co-packer during line extensions. This can either be when scaling production or introducing a new finished product to the market.
Approach your best producer and ask them how they go about hiring co-packaging companies. You’ll learn a few insider tips to form the basis of your research. Even better, a producer can give you a shortlist of viable co-packing companies to narrow down your research.
There are roughly 197,653 food businesses in the US. There is a high likelihood that one of them inspired you to launch a food and beverage startup. Or, you might have a circle of close friends who run a business similar to yours.
Reach out to these food companies and ask for direct references. Some may be even willing to share this with you, all you need to do is approach them and ask. Moreover, direct references from other business owners are better than spending endless hours researching the internet, especially if you’re an amateur.
Food industry websites are an excellent resource center for both consumers and business owners. For instance, you can get an in-depth breakdown of the processing and preparation of food while maintaining its nutritional value and product formulation. Some sites will also recommend viable food co-packaging companies for small businesses.
Even better, you’ll get insights into the changing consumer trends on food packaging products. This information will help you narrow down to a specific co-packaging company that matches the given consumer’s needs.
Your state Department of Agriculture probably knows all food co-packing facilities in your area. This is where they get licenses for their products and operations. The Agriculture Department will be more than ready to share with you industry information. Also, they’ll recommend suitable companies to work with.
The good thing about direct recommendations from the state department is that you can trust them. Fortunately, the department only recommends duly licensed and certified facility companies.
University Food Departments do a lot of research on local food production. They usually interview businesses, producers, food scientists, and even consumers. You can ask the department to share their research with you so that you can study it further.
You’ll understand why small food businesses rely on a specific company to manufacture and package their products. You’ll also get an in-depth insight into why consumers prefer a particular type of packaging. That way, you’ll know what to look for when shortlisting potential contractors.
Did you know that 81% of business managers and consumers search for products and services online? A simple Google search using keywords like “packing companies” or “co-packing services in North Carolina” will give you a myriad of options. More interestingly, Google algorithms understand relevancy. You’ll only see results optimized to your location or business needs, depending on your internet activity.
Also, Google is faster than other search engines such as Bing when researching. On top of that, you can access reviews on different contractors. These reviews will help you determine if a company and its production capabilities are worth your time in the first place.
Alternatively, you can leverage online directories to connect with co-packaging companies faster. Online directories publish materials that explain the whole process of hiring a contract packer. You can even schedule a call with the directory to get the information in detail.
The resourcefulness of online directories doesn’t stop there. You’ll access content that explains how to build a strong relationship with packing companies. Most importantly, you’ll understand the common mistakes to avoid when contracting a co-packing facility company.
Knowing how to find a co-packer is one thing, but shortlisting them is different altogether. Remember, you need to have a list of up to four food co-packers to make a comparison with the wide variety of services they offer to see how they stack up to each other. Consider these tips when shortlisting your options:
Which foods does your small business deal in? Some co-packers specialize in beverages and others in specialty food. Some also specialize in fast food processing, while others focus their services on specific drinks, like milk gallons, cold brew coffee, protein smoothies, almond milk, cashew milk, apple juice blends, and more.
Classify your potential contractors by industry and the type of food they handle. That way, you can quickly do away with companies that don’t serve your niche. This saves you time and resources, especially if you’re a business owner who makes frequent trips to the physical offices before hiring a contractor.
Location is critical when choosing a contractor to manufacture and package your food products. Working with a co-packer within your proximity means the ability to meet the growing demand for your product while saving time and money on shipping.
You can find local co-packaging companies by using local phrases or keywords when searching on Google. For instance, searching “food co-packers in Los Angeles, CA” will give you the results of companies around the region. Alternatively, you can ask for direct references from other local businesses.
When growing your food startup, ingredients and recipes are not scalable. You still have to ensure quality consistency in the whole production process. That said, ensure the co-packer’s ingredients match your detailed recipe and are ideal for production-grade kitchens.
Most importantly, check the sources of the ingredients and packaging. Make sure the quality of the food they produce meets your standards. Verifying this information helps you feel confident when shortlisting prospective commercial facilities.
It will help if you have a general idea of how different co-packaging companies operate before interviewing them. You could be working with this company for a long time, so you can’t afford mistakes in the hiring stage.
Consider these factors to understand how the company operates:
Having insight into these factors will give you a preview of what to expect when you start doing business.
A reputable co-packaging company has many happy clients. The company will even go ahead to feature these clients on its official website. Do in-depth research on individual clients to have a point of reference.
For instance, look for a client who deals in the same food products or product specialties as your business. If they come within your area, that’s even better. You can now approach their co-packaging company for further interviewing.
You’ve already created a shortlist of co-packaging companies to help produce your batch products. Now you want to narrow down your list to the best option that matches your specific business needs. It will help if you dig into specific details on individual packing companies to ensure your interests align. In other words, working with a co-packer should save you time and resources. Have these factors in mind.
The best way to understand how a co-packaging business relates to its customers is by checking online reviews. Customers don’t have anything to lose when reviewing businesses. They’ll paint everything in black and white to show whether they are happy or disappointed with the services. More positive reviews signal a good customer relationship. On the other side, negative reviews show that the business needs to work on its customer experience.
Alternatively, you can gauge the level of customer experience by engaging the company directly. Call their number and see if someone will pick up. If they do, listen to how they engage you in conversations. A customer-centric conversation signals a good experience ahead.
Every business owner starts with the dream of eventually growing big. Ensure that the packing company can keep up with the increasing demand for your product. For example, they should have the resources and labor force to scale the production process as they grow.
However, it’s worth noting that scaling comes with shifting business needs. If you open multiple locations, you may eventually need to hire another contract packaging company.
Cost should be among your first considerations even before you engage the packaging company further. If you’re running a small business, the company should consider that cutting expenses is your priority. However, that doesn’t mean settling for less. The amount you part with should match the quality of the service you’re getting.
Don’t be afraid to bargain or inquire about discounts when discussing costs. Most importantly, the co-packaging company should disclose any hidden costs. Also, understand if the costs will likely change in the future.
Compatibility means the ability of your chosen co-packing partner to meet all the legal requirements of food processing. For instance, they should have the FSSC 22000 certification to guarantee safe packaging materials. Another certification to watch out for is the SQF. This ensures a production run that meets global safety standards.
Other food facility certifications include:
You’ll need to check in with your packing company from time to time. This ensures that they produce your product within the agreed specifications. Sometimes, you also want to visit the offices and discuss critical issues face to face.
That said, consider a company within your proximity. It can be within the city, or a few miles away. Just ensure that you can reach their physical offices without much hassle or expenses if needed.
The size of the co-packaging business matters a lot when it comes to handling your production. A bigger company has the equipment and resources to handle production at any scale. They can also give you bigger discounts because they enjoy the economy of scale.
Similarly, a smaller packaging company can give you a personalized experience. They want to grow with you and use your business as a reference for attracting other customers. Whatever business size you opt for, ensure it doesn’t conflict with your expectations.
Do you still have challenges on how to find a co-packer for your small food business? Sunleaf is your trusted partner for connecting your business with reliable packing companies.
We prioritize specific business needs to ensure that your products reach the consumer in the highest quality packaging.
Moreover, we have access to multiple contractors with scalable efficiency and cost-effective solutions. Check out our co-packer page to get started!