Food businesses can be highly profitable, especially if you have a unique proposition that customers can’t find elsewhere. But as promising as the opportunities are, managing the business requires lots of work. To ensure good quality food, you must stay on top of your operations, from sourcing to production to packaging and delivery.
However, juggling so many tasks in the kitchen makes it hard to find time to grow your business. If you’re stuck in this dilemma but want to start scaling your operations, hiring a co-packer may be the solution. This guide will cover key points like what a co-packer is, the benefits of hiring one, and the signs that your business is ready for this step.
A co-packer, also called a contract packager, is a company that manufactures and packages products for clients. While some co-packers only handle packaging, most in the food industry also cover the manufacturing side, such as a frozen food co-packer, specialty co-packer, or beverage co-packer. Given this, you may sometimes hear the terms co-packer vs. co-manufacturer used interchangeably.
That said, it’s important not to confuse co-packers with a private label manufacturer. With private label manufacturing, you’re placing your brand name on products made by another company. This differs from co-packing, where you outsource production but retain your products and branding.
Hiring a co-packer may seem unnecessary when you’re just starting your business. But as you scale your operations, managing production becomes more difficult and expensive. So if you don’t have enough resources to support the expansion, it’ll be beneficial to work with a co-packer for the following reasons:
You might be intimidated by co-packer costs as a small food business owner. However, the reality is that you’ll spend less with outsourcing since you won’t need to lease a place, buy equipment, or hire staff anymore. Co-packers already invested in these, so you won’t need to shell out a considerable amount to ramp up production.
Production is time-consuming, from procuring ingredients to manufacturing food products to packaging. Thus, assigning this step to a reliable co-packer saves you a ton of time, allowing you and your team to focus on critical tasks.
Co-packers are experts in their field. They understand how to operate advanced equipment and know different packaging techniques, which ensures your product’s quality. High-volume production, packaging, and fulfillment can be tricky to navigate without the proper experience, so this is where a co-packer becomes extremely helpful.
Outsourcing to a co-packer also gives you access to certifications like HACCP and AIB in their facility. This is especially beneficial in the food industry, where businesses must follow strict regulations to pack and distribute products. Reputable co-packers already have the necessary certifications secured, saving you the time and effort of getting them yourself.
So, how do you know if your business is ready for a food co-packer? Before rushing into any decision, you should assess your business—where it stands, what your plans are, and what resources you have in place. If you notice the following things, it’s high time you start looking for a co-packer.
To start production, many co-packers require a minimum volume of units, so you should check if your demand projections meet the requirement. If not, consider looking for a small-batch co-packer. Businesses usually hire them to accommodate excess demand during peak seasons, but you can also consider this route if your demand isn’t as high yet.
Once you’ve determined that you have enough demand, it’s time to look at your finances. Hiring a co-packer is no small investment, so you must have enough capital to fund the expansion. While manufacturing in bulk helps you lower your unit cost, you’ll still need to incur other expenses like:
Depending on your agreement, your co-packer can cover some of the items above. For example, some co-packers can source ingredients for you or store your finished goods in their warehouse. Of course, these will entail extra costs, so check which arrangement best fits your needs and budget.
Before you sign production over to a co-packer, you should take some time to understand how co-packing works. Get to know the different types of co-packers and what they offer so you have a better idea of what to look for in your search. If possible, you can also reach out to friends, family, or fellow food business owners who have experience working with co-packers to gain more insight into the process.
Hiring a co-packer involves entrusting a big part of your workload to another company, making it crucial to choose the right partner. But with so many manufacturing companies, the question of how to find a co-packer is tough to answer.
To start, you can look for possible candidates by searching “co-packer near me,” browsing a co-packer directory or asking for referrals. Once you have some companies laid out, you’ll need to research them thoroughly. While doing this, here are some key considerations to think about in your decision:
Hiring a co-packer has enormous benefits, provided you partner with the right one. So if you’re interested in taking your business to the next level, Sunleaf Foods will help you find the right fit. We work with an extensive network of co-packers, so you can rest assured that we’ll do our due diligence to vet the perfect candidate. Call us today at 949-899-6285 to get started.