Processing
Going to Market with an Organic Co-Packer
By Ron Rash
To bring a new product to life is an exhila- rating experience…as long as it is suc- cessful. According to a study of slotting
allowances by the Food Marketing Institute,
up to 80 percent of new products introduced
will fail due to reasons including everything
from financing issues to poor advertising and
market research to product design flaws.
Aside from all these, however, one of the most
important factors that can determine the success or failure of your product has to do with
the co-packer or contract manufacturer you
choose and your working relationship with
that partner. Many common pitfalls can be
avoided through detailed research and due
diligence up front.
Advantages of Using a Co-Packer
While some companies invest in their own
privately-owned manufacturing facilities, the
cost and learning curve involved in this leads
many to partner with a co-packer instead.
The benefits of co-packing have become
more widely recognized and popular with
both large, established companies and
smaller or start-up operations. Some advan-
tages include:
• Reduction or elimination of start-up costs
as compared to building one’s own factory.
• The packer will likely be able to offer product development capability, product efficacy testing (stability, food safety, shelf-life,
etc.), computer programs that predict nutritional labeling information, and knowledge of packaging materials.
• Direct control of overhead costs associated
with production. These costs are either
identified directly by the co-packer as a
charge, or are part of their turnkey prod-
uct service. It may be that these costs need
some refinement and negotiation, but
these are agreed on ahead of time.
Possible Pitfalls of Co-Packing
Although there is a long list of benefits of
working with a contract manufacturer, there
are also very important elements to consider
that could cause issues at some point in your
partnership.
• The marketer must share confidential information. It’s your job to make sure that
your formulations and other information
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ORGANIC PROCESSING
