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To Co-Pack or Not to Co-Pack?

When staying in-house makes sense

Author

CPG MBA
May 23, 2023

You’ve got a great product and your start-up is ready to roll. Or, maybe you’ve been going at it for quite some time now and your operation is ready to expand. Either way, you may be thinking that it’s time to bring in a co-packer.

And for many, co-packing is the solution. It can save you and your team valuable time and resources, helping you scale your business faster than you ever could on your own. But the truth is, for many companies, it just doesn’t make sense.

So, why shouldn’t you use a co-packer?

  • You don’t need to. Your company isn’t operating on a scale large enough to warrant the high minimum order quantities (MOQs) required by co-packing.

  • Added fees = high costs. In addition to their rate structure (flat day, per unit, or per hour), co-packers tack on a number of additional charges based on factors like processing and equipment needs.

  • You value direct involvement in production. We get it. This product is your baby, and you want to hold its hand as it takes its first steps. Using a co-packer means letting go of one part of its life, entrusting its care to someone else. For many people, this can be impossible to do, especially at an early stage in a product’s life.

  • Your product is too unique. Being one-of-a-kind makes your product stand out in the market, but it also can make it hard to pack. If you’re looking for a company to build an entirely new manufacturing process from the ground up just to facilitate your product, co-packing probably isn’t for you.

THE INSIDE SCOOP

Blades Creative Design Studio

Kaleena Goldsworthy-Warnock, founder of The Bitter Bottle, chose not to use a co-packer when developing her business. Here’s why:

We manufacture in-house currently. The thought of using a co-packer at first seemed disingenuous to the brand I was creating. I will admit, that thought is a bit ignorant and naive, as production demands a massive amount of time. At the same time, when you handle your own production, you are in control of the quality of your products in the sense that you see, can taste, and test them every step of the way. The initial decision to manufacture in house was based off of monetary restraints (a one-woman business has limited resources) and these concerns for quality and authenticity. Knowing what I know now, we will continue handling production in house until demand increases beyond what we can comfortably create. I think that is a logical and realistic expectation for those who choose to produce in-house. Knowing the next step and beginning research early on is key—we know now where we want to be, so we have plans to outsource eventually.

YES, BUT…

If you’ve weighed all these considerations and still want to find a co-packer, consider choosing from reputable sources like The Association for Contract Packagers and Manufacturers (CPA). They have a detailed Membership Directory full of co-packing companies who oblige by their strict Standards of Conduct.

Databases such as Maker’s Row can also serve as good sources for finding domestic manufacturers and co-packers for your product.

Until next time,

Prof. Goods

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