As the term co-pack implies, two parties are involved â€” two entities who must cooperate with one another.
“Sometimes this marriage between marketer and manufacturer works seamlessly, and other times it can be a downright catastrophe,” says Christine M. Homsey, a food scientist with Food Perspectives Inc., a consulting firm in Plymouth, Minn. Inventors and marketers of food products turn to co-packers for a variety of reasons. Limited production capacity; the expense of purchasing equipment; lack of efficiencies or competencies in a particular area; or wanting to manufacture a product that does not fit into dedicated production lines are oft-cited reasons for outsourcing production, says Homsey. “Many factors need to be considered when signing a contract with a co-packer,” she says. “For example, projected product volumes will influence how good a match a marketer and manufacturer will be. If a marketer has very low volumes or a single product to sell, many manufacturers will not want to bother. On rare occasions, co-packers turn away large volumes that would cause them to exceed their capacity or make them too dependent on one customer.”
Manufacturers offer varying levels of assistance to those who want to put a formula into production, says Homsey. “Some co-packers simply blend and package products, and have no technical department at all, which requires the marketer to stay abreast of all technical matters,” she says. “In other cases, co-packers can offer the gamut of QA and R&D services, and may even help formulate or refine the products.”
While co-packing offers many benefits to marketers, caution should be exercised when negotiating with a manufacturer, says Homsey. One of the biggest challenges for a manufacturer is taking the marketer’s existing formula and adapting it for in-house equipment. In true co-packing arrangements, the marketer will almost always set product and ingredient specifications. The same generally holds true for quality-control testing procedures; most manufacturers will test and monitor products as directed by their customers. If the customer has not already developed quality checks, the co-packer will sometimes help design appropriate tests.
A working collaboration
With customers that include Subway and Costco, West Liberty, Iowa-based West Liberty Foods LLC, is a producer of IQF products such as chicken strips, as well as sliced deli turkey, chicken and red-meat products.
“When customers approach us with co-packing opportunities, they are interested in a manufacturer with the ability to deliver a high-quality product that meets or exceeds all food-safety requirements,” says Janelle Plantz, marketing manager for West Liberty. “Also important to the customer is access to state-of-the-art equipment that allows them to develop their products without a substantial capital investment.”
Communication between both parties is vital, says Plantz. “Analyzing what needs must be met is key,” she says. “This includes focus on food safety and other manufacturing practices.”
La Farge, Wis.-based Organic Prairie also supplies organic meat as ingredients to other parts of the organic food industry.
“We don’t invest heavily in bricks and mortar,” says TeddHeilmann, general manager of Organic Prairie. “We invest in relationships, that is our business strategy.”
The company does not own any of its processing facilities on the meat side of the business. But, Heilmann says the company has been able to find good co-packers that have learned how to implement organic processing. “We look for those niche-type processors who can run smaller batches compared to the rest of the industry,” he says. “This poses a certain process because we have implemented a pretty unique food-safety and testing program.
“A lot of meat plants think we are a little overkill in the amount of testing we do. They all follow USDA guidelines, but we ask them to go above and beyond that.”
There are a few priorities that are on top of the company’s list when choosing a partner, says Heilmann. “We must be able to make strong claims to our customers about the food safety of our products, which is a priority among organic buyers,” he says. “And we have to find a plant receptive to the idea of doing new things.”
The ability to experiment with new methods has to be a quality with Organic Prairie’s co-packers, says Heilmann, because the company is trying to do things with organic meat that haven’t been done before.
As far as other types of qualities â€” beyond having the mentality and recordkeeping â€” Heilmann says Organic Prairie absolutely has to invest in the relationships.
“All of the plants that we’ve brought on board over the past five years are still with us because as a company we have worked hard at choosing the right co-packer â€” at what at who makes a good one. It has been a real learning experience on our part.”
The company is current utilizing nine different co-packers, and projects up to a dozen in the next few years.
Note: Comments supplied by Christine M. Homsey originally appeared in an article she composed for Food Product Design, an online magazine for the food and beverage industry.