What to Expect after your Co-packer Search (Part 1)
This is in the format of a deep dive to help guide your discussions with a Contract Manufacturer after you have been matched from our Dedicated Co-packer Search Process.
This is in the format of a deep dive to help guide your discussions with a Contract Manufacturer after you have been matched from our Dedicated Co-packer Search Process. We are able to handle this process for you or we are also available to advise you as you go along this process. Please contact firstname.lastname@example.org or book a time to discuss here if you would like to engage us for further support on your technical review and Co-packer onboarding needs.
Technical Review Overview:
A technical review is the key process that takes place during your search for a contract manufacturer. At this point, you have sent out inquiries to contract manufacturers and gotten a response from a contract manufacturing company that is interested to hear more about your brand to determine if they are a fit to make your product.
This is a key step in your co-packer search process where you have an interested co-packer and now you need to communicate the intricacies of your product to see if your product is a fit for the manufacturing capabilities of this co-packer. This is not just for technical matchmaking; this is also a key part of the process where the co-packer is feeling out how serious of a brand you are and whether or not they want to take on your project.
Any co-packer that you speak with is subconsciously calculating how long it will take and how much of their resources it will require until this product is running successfully and at high velocity throughout their plant. Any impediment to successfully running product is a negative mark against your brand (improper formulas, not having commercially sourced ingredients, vague processing steps, unrealistically short timelines to launch, etc.), while any credibility indicator is a positive mark (PO’s with reputable retailers, working with CPG consultants, having clean formulas from a Food Scientist, Having annual forecasting numbers, Having a COG’s target in mind, etc.).
When you are speaking with a Co-packer, you need to show that you have already done your homework on how to accurately describe your product and your goals to get them to take you seriously. Remember, these co-packers are being inundated with leads everyday from brands that are not prepared or not ready for contract manufacturing and this onslaught of “bad-leads” have made most manufacturers very pessimistic and weary to spend time on new brand projects.
To cut through this, you need to be able to quickly and effectively communicate the following about your product:
1. What is it? —> Formula
2. How do you make it? → Processing Steps + Pasteurization
3. How is it packaged? → Packaging Formats
4. How much do you need? → Annual Forecasting
What is it and how do you make it Formula’s + Processing Steps
- Proper Formulas - “what is it” - The difference between your favorite home kitchen recipe and a CPG formula is scalability. Your formula needs to be structured in the correct format for a manufacturer to understand. Typically this is in a % ratio so that it can be scaled up or down easily by the manufacturer depending on the production size.
- ~Why this matters - The formula is a key indicator on whether or not you are ready for a contract manufacturing partner mainly because it shows whether or not this formula has been made before on a commercial scale. Many co-packers would rather work with a group that is leaving another co-packer rather than take on a brand that was making the product in-house. That is because it means there will be more work and adjustments that need to be made to the formula and processing steps to have it run at the co-packer which leads to more time and resources before you are successfully running with the contract manufacturer.
- Proper Processing Steps - “how do you make it” - Same as the formula, you need proper processing steps that match the needs of a manufacturing environment. Not the time it will take to bake in a home oven or the blending required with a home food processor, but the actual mixing times of 50lb quart mixers or walk-in commercial ovens. If you need help with the formula or processing steps, it is imperative that you hire a professional food scientist to take your kitchen recipe and translate that into production ready processing steps.
- ~Why this matters - Many co-packers have the technical ability to do this translation, but they would rather deal with a brand that has this figured out because it means less work before they are successfully running your product. You may still need to make processing changes in order for the product to run successfully in a specific manufacturing environment, but proper formulas at the onset signals that you have the resources and the technical understanding to make and approve process changes that will help manufacturing output without sacrificing the final product.
- Commercially Sourced Ingredients - If you are launching a food or bev CPG product in the natural food industry and you are between $0-5M in sales, then chances are you will start your co-packing relationship operating in a tolling or partial turnkey model. This means that the co-packer will have to rely on you to bring in either some or all of the raw materials to their manufacturing plant. They need to feel confident in your ability to work with ingredient suppliers that are reputable.
- ~Why this matters - A manufacturer wants to make sure you can reliably bring in raw materials on time, in good condition, and with enough adequate paperwork that it will not jeopardize their third party food safety certifications.
- ~~They will want to see that you are working with ingredient suppliers that have third party audits and letters of continuing guarantee. They will want to see the specifications sheets to ensure that there are no allergen restrictions to bringing in the ingredients.
- ~~Most importantly and especially in a post-pandemic supply chain, they will also want to make sure that you can get ingredients delivered to their facility with certificate of analysis paperwork on time before scheduled productions.
- Pasteurization - if you have a shelf stable product you will most likely need to go through a “kill-step” pasteurization process to make the food safe for consumption even when it is held at ambient temperature for long periods of time. Most high volume food manufacturing equipment is built with pasteurization methods built right into their food production flow, so they need to know whether or not the pasteurization methods that they offer will fit with your food product needs.
- ~Why this matters - First and foremost we need a safe product for general consumption. If you are a first time food entrepreneur, you might not realize that there are a ton of ways to pasteurize a product depending on its chemical make-up and they are not all created equally. It is crucial that you understand the proper pasteurization needs before reaching out to co-packers so that you can understand which co-packers are and are not a good fit.
- ~~A good way to describe this is with beverages because of the sheer amount of pasteurization methods available to different types of beverages. If you have an acidic beverage, you may need to do a variety of different pasteurization methods including tunnel pasteurization, retort/batch pasteurization, Flash HTST pasteurization, Hot-Fill, or Chemical preservative cold-fill pasteurization. These are all different ways to process a beverage based on the ingredients, the pH, and the packaging format.
Packaging Format - “how is it packaged”
- Direct Food unit packaging - Similar to pasteurization methods, packaging formats are built into most high volume food manufacturing plants. Using the same beverage metaphor, some manufacturers can fill bottles, some fill cans, some fill tetra pak containers. It all depends on the manufacturer.
- Retail Carton Saleable unit packaging - This is the retail carton that will sit on shelf and hold the direct food unit. For instance, most nutrition bars are sold on the shelf in 12-pack retail cartons. We need to see if that co-packer can fill those types of retail cartons or if there needs to be an adjustment made. Some co-packers will prefer cartons that are manually erected and hand-packed by human labor, other larger manufacturers will prefer retail cartons that can be automatically erected by Adco machines.
- Master Case Packaging + Pallet Specifications - Many food manufacturers talk about volumes and send out invoices in CASES instead of in EACH’S. One of their first questions will be how much of your product goes to a case.
- ~The industry is moving towards smaller cases to get away with giving away less product during requests for “free-fills” from retailers. On the manufacturing side, manufacturers prefer larger case sizes because they will be more efficient packing products off the line if they don’t need to keep changing to a new box. On the palletization side, they need to know how you plan to stack the pallets and in what format so that it’s ready to be shrink wrapped and put on a dock for a truck to pick up the final product. This of course needs to be done so it is important you speak to a professional that can help you to determine how to stack the pallet so that the product will survive the rigors of freight and transportation.
- Volumes - “how much do you need?”
- ~Manufacturers speak about volume in two different ways - Production run MOQ’s and Annual MOQ’s (minimum order quantity). Many manufacturers will let you know what their MOQ’s are and it's good to have an understanding of how much product you will need
- ~A production run MOQ is usually how much a manufacturer can make when producing at full capacity for an 8 hour production shift so that they are fully utilizing all of their labor costs and manufacturing output for that day. An annual MOQ is their determination if you will be producing regularly enough that it will be worth their time for the account management upkeep associated with taking a client on. This is usually once a quarter or twice a year depending on the product format.
This technical review process will enable most contract manufacturers to determine if it is a fit or not to move forward and will also give them the information necessary to provide a quote. Now you can take their pricing, their daily MOQ’s, and any other applicable information to make the decision whether or not the co-packer is the right fit for your business.
The key to a buttoned up technical review process is to put you in the driver’s seat of whether or not you want to move forward with that manufacturer. A clean technical review process will eliminate common roadblocks or “deal-fatigue” that would lead a co-packer to stop responding to you and instead replace that with more manufacturers who have expressed interest to make your food product.
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