It’s a fact in all modern businesses—packaging is essential. If you’re a small business owner with an enterprise in the food and beverage industry, you’d want only the best packaging. But the production process is more complex than you think. It’s impractical to keep dedicating your time and resources to packaging.
The good news is that a small batch co-packer can aid in the process. By partnering with them, you don’t have to go through the procedure by yourself or your team. A co-packing company can handle most of your operations, from manufacturing to quality control.
To maximize your investment, you need to find a co-packer that’s best suited for your needs. Here are a few things to note as you consider working with a co-packer.
A small batch co-packer, sometimes called contract packagers or contract manufacturers, are in charge of mass producing items. Their responsibilities vary, but they generally take care of production, manufacturing, assembling, and quality control. They can also provide storage solutions for the long term.
Small batch co-packers often partner with food companies, including those who sell beverages and baked goods. Aside from packaging, co-packers will also be responsible for product runs. If you need assistance with large-scale production, these companies will lend a hand.
Additionally, since they handle manufacturing, you can entrust them with business-confidential formulas and practices. This is no issue at all, as long as you have properly sorted out your legal terms and conditions with them.
Finding the right partners is key to scaling your business. You need to make the right investments to ensure that you’re optimizing your resources. Of course, a small batch co-packer falls on the list. They do it all for you, so you don’t need to spend separately on ingredient costs and an expensive production facility.
But hiring a contract manufacturer requires evaluation on your end. You need to think about the services you need to avail when choosing a co-packer. These can range from sourcing ingredients to warehousing and logistics. Once you’ve finalized your scope, start your search and consider the steps below.
In choosing any business partner, it pays to be meticulous. Remember that co-packers are directly responsible for your products. Assess your choices by looking for nearby companies in your area and make sure that you have easy access to their resources.
Consider the costs, location of the production facility, quality of materials, and other criteria. Sometimes, a co-packer may look like a good match, but the logistics may not fit your business. Avoid potential trouble in the future by listing “what works.” As early as you can, take note of locations, budgets, quantity limitations, and the like.
You might also want to ask around, especially if you know trusted entrepreneurs with a food business. Find out their choices for reliable contract packagers, then check their portfolios if you can find them. Take the time to review their expertise by seeing if they have certifications, such as HACCP, Kosher, and more.
You don’t have to limit your choices to just one—some food companies partner with several co-packers. It might even benefit you to have more than one contract manufacturer so that your assets don’t just fall under a single entity.
You also need consider the possibility of needing more contract manufacturers in the future if you plan to expand your business. Just make sure you have allotted enough budget for several companies.
Once you’ve reviewed your choices, narrow down your list of small batch co-packers. If you have the time, meet with them, ask them about their services, and see if they match your needs. You can also try to ask for quotations so you can compare your choices.
Different kinds of food production businesses have different requirements. What may work for your fellow entrepreneurs may not work for you. Still, there are a few general factors to watch out for. Here’s a quick and simple checklist to start while reviewing your contract manufacturing partners.
Preserving the quality of your products is critical to your enterprise, and an efficient co-packer should know this. That’s why it’s essential to have a reliable co-packing partner when you’re in the process of growing your business. Inspect how they handle goods and make sure they do it with utmost care. Above all, ensure that their operations adhere to your own business guidelines.
It’s also wise to remain involved in operations. Checking and auditing goods, for instance, should fall under your line of responsibilities. Finalize your level of involvement as early as the negotiation stage so that you can clearly decide on each party’s duties.
Confidentiality always poses some level of risk, but it’s a requirement if you’re partnering with a co-packer. Naturally, your contract manufacturer needs sufficient information on how your products are made. You have no choice but to entrust them with your unique and confidential processes. This doesn’t mean you’re at a disadvantage—it’s simply a part of the package.
To avoid any setbacks, have your formal agreement address the scope and limitations of your co-packing partner. Have them sign a non-disclosure agreement (NDA) so that they are bound by legality to protect your products and business proceedings. Be explicit in reminding them that no other party, themselves included, can share or benefit from your business secrets.
Even if the contract manufacturer participated in the creation, production, and storage of products, they don’t own your company’s intellectual property. So as per conventional arrangements, your business should still claim full ownership.
You need to be prepared for unique cases that come with a growing business. Aside from issues on confidentiality and ownership, your formal agreement needs to tackle terms and conditions. It’s important to be crystal-clear on acquisition, disputes, operations, and other miscellaneous matters.
For instance, you might find a need to partner with more co-packers in the future. Ensure that your arrangement can give you the liberty of looking for other prospects. You’ll also need to review conditions on termination so that, should the need arise, the agreement can be severed without complications.
A good partnership is key to scaling your business. Maintaining order in an arrangement can extend your organic reach and lead to helpful referrals. Of course, this business relationship starts with a formal agreement. Consult further with your legal team so that your contract benefits both parties fairly and reasonably.
The role of a small batch co-packer is to aid you in successfully scaling your food company. Whether you need help in supply or larger production, partnering with the right contract manufacturer will be essential in meeting your business goals.
If you’re looking for trusted co-packers in California, do reach out to us. SunLeaf Foods offers a variety of services and solutions to help you meet success. We can help you with sourcing quality ingredients, manufacturing, warehousing, distributing, and whatever else you may need in the production process.