MARKETING FOOD ONLINE



Food Co Packers and Food Co Packing

Posted by Damian Roberti on

A contract packer, contract packaging, co-packer, co-manufacturer, and contract -manufacturer are all terms used to describe a company that manufactures and packages foods or similar products for their customers.

 

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Secondary packaging is the next layer of packaging, or the packaging that is used to group together a variety of pre-packaged products in a single container.

A contract manufacturer (also known as a "Co-Man") is a manufacturer who has been contracted to produce a product line for your company. It is a form of contracting out work. Co-packer is the term used to describe a contract manufacturer in the food industry.

 

The ability to increase operational efficiencies through co-packing has become a significant competitive advantage for manufacturers in a variety of industries, particularly in the bakery, food, and beverage industries. Co-packing has become increasingly popular in the present economic climate as a technique of completing major projects without having to hire additional personnel or purchase additional equipment.

 

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Briefly stated, a co-packer is an established food or pastry manufacturing company that produces your current company's product lines according to your requirements in exchange for a fee (usually a percentage of the sales). Even the term "outsourcing" is becoming increasingly associated with Co-Packing.

It is implied that the terms above refer to a facility that either makes your product line or accepts your finished good in bulk and packages it for you. This is an efficient, cost-effective way to bring your product to market rather than creating your own production facility.

 

Unfortunately, co-mans are not easy to come by in this day and age. Their websites are typically designed for people who are already familiar with the subject matter. Frequently, unusual terminology like "flexible pouch retort," "extrusion facility," and "form and fill sealers" are used in the descriptions of their procedures.

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Manufacturing food and bakery items is a costly endeavor, and co-manufacturers are well aware that many start-up enterprises and food entrepreneurs lack the financial resources to conduct all of the necessary test-runs and experiments to validate their manufacturing product. Experimental test runs and line time can cost thousands of dollars, and manufacturers would like to engage with established food companies rather than with smaller start-up enterprises. As a result, manufacturers are reluctant to invest money in marketing their facilities and are unwilling to bend over backwards to engage with you unless you work through a broker to accomplish your goals. Co-Manufacturers can save a large amount of money on labor, materials, and other expenses associated with the manufacturing process. If a firm maintains sufficient oversight, contract manufacturing can enable it to reduce production costs while maintaining the quality of its product and increasing its profit margins. However, contract manufacturing is not for everyone.



A variety of factors are being discovered by businesses as to why they should outsource their manufacturing to other businesses. Priority is given to cost savings. Companies save money on their cost of capital because they do not have to invest in a manufacturing plant or the equipment required for production. Labor expenditures such as pay, training, and benefits can also be reduced by using a streamlined approach. Some businesses turn to contract manufacturing in order to reduce their overhead costs and increase their profit margins, allowing them to devote more resources to marketing and sales. The establishment of a contract between the manufacturer and the company for which it is producing, which may last several years, is a mutual benefit of co-packing. The firm will be confident that it will continue to have a steady flow of business until that time comes. What are the advantages and disadvantages of co-packing / co-manufacturing for bakeries and food businesses in general?



Greater product visibility, improved cost management, increased flexibility, and environmental benefits are just a few of the advantages that food manufacturers can reap from implementing this method of production. Because third-party operators already have the necessary experience, resources, and personnel in place, cost management is the major motivator. According to a recent Contract Packaging survey, which was featured in Supply Chain Matters, 68 percent of respondents who had invested in co-packing stated that it had increased their business' flexibility, while 85 percent stated that it had assisted them in cutting costs and increasing their margins significantly, respectively.



Co-packing allows businesses to take advantage of expertise that they may not have, but which the contract manufacturer possesses in plenty. The contract manufacturer is likely to have established ties with raw material suppliers as well as with methods of increasing the efficiency of their manufacturing process. Contract manufacturers are likely to have their own quality control procedures in place, which will assist them in identifying counterfeit or damaged goods as soon as possible. With the help of co-packing companies, businesses can better concentrate on their core competencies if they can delegate base production to an outside company.



Contract manufacturers have a large number of customers for whom they manufacture. Given the fact that they are serving several customers, they can offer lower raw material costs due to economies of scale that are realized through volume purchasing. The price per unit will be less expensive the greater the number of pieces that are shipped in a single shipment.



Following the selection of a co-packer by you and your broker, the following step is to negotiate the terms of a contract with the co-packer to which you are interested in working. Never start co-packing without first signing a contract! There is no way around the need for competent legal assistance and advice throughout this stage of the procedure. A good contract will protect both you and the co-packer in a mutually beneficial manner. Your broker will guarantee that you have the protections and solutions in place to ensure that your product is manufactured according to your specifications and that you have the ability to seek legal action if something goes wrong during the manufacturing process.



This contract negotiating procedure will begin with you and your broker, together with the co-packer, discussing specifics such as quality indicators and other specifications. It is critical to supply your co-packer with clear direction and expectations for your finished product, as well as specifics on how that product will be evaluated and evaluated. Your broker will collaborate with you to ensure that everything is in working order. Your contract should prevent you from being obligated to pay for a product that does not meet your specifications. The importance of communication with your co-packer cannot be overstated in order to ensure that you are both on the same page and that you both understand every aspect of the product you plan to manufacture. Having the right broker will save your organization a great deal of money and time, as well as open the door to a whole new world of opportunities.

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