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by Gayle Gardner
Contract packaging, also known as co-packing, is the increasingly popular option of having someone else produce and package your product. This method of manufacturing is a growing segment of the Fiery Foods Industry as more cooking stores, gourmet and hot shops and even supermarkets carry a wider variety of unique and small house brands. Even restaurants are taking their homemade salsas, sauces and spices, having them co-packed, then retailing them. What were once "family secrets," are now becoming available to many households across the United States.
Some co-packers start out as general manufacturers, while others begin with a recipe that they decide to manufacture themselves. Some co-packers will let you put your private label on their products and market them as your own; if you are entering a market where your best chance at success is to go in with multiple products, then this might be a good idea. Also, if you are interested in retailing, but have not yet developed your own product, this might be the way to make a name for your company.
The best ingredient for a successful partnership between a co-packer and an entrepreneur is trust. Both of you are interested in a profitable venture, and achieving this goal means working together to do the best job possible.
A properly chosen co-packer will provide the bridge between your basement or commercial kitchen and the mass manufacturers. Given the pace with which the hot and spicy market is growing, using a co-packer gives you a good chance to cross that bridge successfully.
FINDING THE RIGHT CO-PACKER
They might be housed in a small building or have multiple warehouses and plants. Their equipment might be as simple as manual machinery or as sophisticated as automated lines. Whatever their mode of operation, these people can help you expand your business by providing the labor, equipment, facility and know-how to customize, formulate or completely assemble the best packaging and recipe for your product. Here are some sources and suggestions for finding a co-packer who will best suit your needs:
Editor's Note:
It is one of the most commonly asked questions: do you know of a contract packer in my area? We now have some resources to help answer that question.
The Contract Packaging Association has 116 members and a searchable database. They are located at www.contractpackaging.org
The Packaging Services Expo is a show featuring contract packers and others that is held in May. Information at www.packservicesexpo.com
Contract Packaging Magazine is a quarterly publication for that industry. Information at www.packworld.com
Gather Names
Go to a grocery store or a gourmet shop and locate a product similar to yours. Identify the manufacturer and contact them.
Consult the Thomas Food Industry Register, which lists co-packers by state, and can be found in many libraries. Greg Deneen, of Deneen and Company, a co-packer and processor in Santa Fe, New Mexico, advises that it is important to find a co-packer near you because in the beginning you will be working closely together.
Contact the Department of Agriculture
Contact specialty food associations. Joe Brent, owner of Jo B's in Waterbury, Vermont says that he belongs to the Vermont Specialty Foods Association and has found that people who consult this association for information often become his customers.
Check for Quality
Visit the companies and make sure they have sanitation and quality controls on site. Look for things such as:
-- A pH meter;
--A sugar brix scale;
--Record-keeping of ingredients and nutritional values;
--Charts of date and batch coding data for all products.
Insist on certification. According to Dr. Al Wagner, a Food Processing Specialist with Texas A&M University, co-packers need to be certified in the processing of acidified foods, and should have a certification from the Better Process Control School.
Investigate more than one company.
Check for reputation. Mad Coyote Joe of the Mad Coyote Spice Company in Cave Creek, Arizona, says, "The number one thing to look for when choosing a co-packer is the longevity and track record of the business. Find out who else they package for and call them for details."
Compatibility
Level of Involvement. Co-packers work at various levels of product development--going in with a finished product is not always necessary. In fact, some co-packers will work with individuals who have nothing more than an idea, and help develop a product from the ground up. It is also possible to bring in a finished product that just needs to be heated and/or packed.
Supplies. Some co-packers request that you purchase and supply all the recipe ingredients, glass or bottles and labels. Once delivered, the co-packer assembles the product. However, the most common type of co-packing is when the co-packer makes the product with their own ingredients and does the complete packaging.
Ingredients. You want a co-packer that manufactures the same type of food as your product because they have certain stock ingredients in-house that will make manufacturing your product easier.
Volume. Decide what kind of volume you wish to sell and if the co-packer has the facilities available to handle that amount. Often large companies cannot service the small entrepreneur, so find someone that is compatible with your expectations. To begin on a smaller scale, check the company's minimum batch size.
Case Amount. Many co-packing companies have a set mandatory case run. Most co-packers are looking to produce at least 100+ cases. Anything less, and you might have to consider continuing on yourself.
PRODUCT DEVELOPMENT
Once you have found a co-packer, it is important to establish a working relationship. When you hand over your treasured recipe, most co-packers will have you sign a confidentiality or non-disclosure trade agreement. This ensures you, the customer, that they will not give out your recipe or reproduce your product under a different label. Some argue that these agreements wouldn't stand up in court if needed, and that recipes are not copyright protected. While this may be true, an agreement like this shows good faith.
Perfection of the mass-produced recipe is a crucial step in the entire process. As is often the case, simply multiplying the recipe out across the board doesn't work, so special attention must be adhered to in the formulation process. This may take multiple test batches at your expense. "You must sit down with a technician and go over your recipe step by step," says Dave Schy, owner/chef of Hubbard Street Grill in Chicago, and manufacturer of a line of products. "You should be there by their side during the production of the batches until the recipe achieves the exact taste you desire."
If you have done your homework, you should already have
had your product food engineered so that you know all the
processing levels, nutritional content and food labeling
requirements. These provide a benchmark from which to start,
because in larger batches, these numbers will change.
PACKAGING YOUR PRODUCT
The bottle and/or package, as well as the label, are critical in terms of marketing, and there are many different types of containers, seals and caps from which to choose. Some co-packers request that you provide the glassware in which to house your secret concoction, but many others have the bottles on hand or are able to order them, and they will help you select the right one for your product.
Labels on the other hand, are in your court. Co-packers will put you in touch with label companies or certain designers they have worked with before. Since your label is the eye-catcher that draws attention to your product, co-packers leave the decisions to you and your personal taste. Remember that the bottle and label must go together.
While Deneen doesn't advise people on labels, he tells
his customers to order conservatively. "The cost of the
labels depends on the quantity ordered, but at first it may
be wise to order fewer labels at a higher cost, than to have
labels left over because the product didn't sell well," he
says.
COST
The cost of using a co-packer runs the gamut, depending on the size of your order, materials used and each co-packer's policy. Some co-packers have a per-case charge, while others charge a total price on the finished product. There are co-packers who request large deposits before the work begins and then take back a certain percentage in credit against future products. For new accounts some co-packers ask for half of the money up front and the other half C.O.D. Some of the better co-packers, according to Wagner, have gotten to the point where they charge a pretty hefty fee up front in order to weed out the serious people from those who decide to go into business on a whim.
There are also circumstances beyond your control that can affect the price of your product. "Weather or the price of oregano can be a major factor," says Mad Coyote Joe. Because of this, it is important to maintain good communications with your co-packer.
In most cases, after the co-packer's work is done and the finished product is waiting for you on the dock, you are responsible for the warehousing, distribution, marketing and selling of your product, although there are some co-packers who will warehouse your inventory.
Gayle M. Gardner lives in New Mexico and has been a
freelance writer for the past four years. Her articles have
appeared in numerous publications, including Good
Housekeeping, Family Circle and Bon Appetit.
RESOURCES
Deneen and Company
Greg Deneen
1590 San Mateo Lane
Santa Fe, NM 87505
PH: (505) 988-1515
Food Processors of New Mexico
5330 Williams SE
Albuquerque, NM 87105
PH: (505) 873-7262
Jo B's
Joe Brent
42 Foundry Street
Waterbury, VT 05676
PH: (802) 244-1552
FAX: (802) 244-7896
Mad Coyote Spice Company
Mad Coyote Joe
P.O. Box 1647
Cave Creek, AZ 85331
PH: (602) 488-1985
Dave Schy
Chef/Owner
Hubbard Street Grill
351 W. Hubbard St.
Chicago, IL 60610
PH: (312) 222-0770
