A contract packer, contract packaging, co-packer, co-man, and contract -manufacturer is a company that manufactures and packages foods or similar products for their clients. Secondary packaging refers to the next layer of packaging or the packaging used to group various pre-packaged products together. A contract manufacturer (“Co-Man”) is a manufacturer that is contracted to produce your company’s product line. It is a form of outsourcing. In the food business, a contract manufacturer is called co-packer. Co-packing has become an important competitive advantage for manufacturers, particularly in the bakery, food and beverage markets, as it is a rich area for operational efficiencies. In the current economic climate, co-packing has become increasingly popular as a means of fulfilling large projects without taking on extra staff and equipment. In short, a co-packer is an established food or bakery manufacturing company that produces your existing company’s product lines to your specifications for a fee. Even the word outsourcing is now connected even more with Co-Packing.
The terms above refer to a facility that either manufactures your product line or receives 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 building your own manufacturing facility. Unfortunately, co-mans are not easy to find. Their websites are usually designed for people already in-the-know. Descriptions of their processes often use strange terms like “flexible pouch retort”, “extrusion facility”, or “form and fill sealers
Manufacturing food & bakery products is very expensive and co-manufacturers know that many start up companies and food entrepreneurs don’t have the funds for all the test-runs and experimentation needed to validate the manufacturing product. Experimental test-runs and line time can cost thousands of dollars and manufacturers would prefer to work with established food companies. Because of this, manufacturers don’t invest money into marketing their facilities and they don’t bend over backwards to work with you unless you work through a broker. Co-Manufacturers can save significant money on labor, materials and other expenses related to production. So long as the company maintains appropriate oversight, contract manufacturing can permit a company to lower its production costs, maintain the quality of its production, and increase its profit margins.
Companies are finding many reasons why they should outsource their production to other companies. Cost savings being priority. Companies save on their cost of capital because they do not have to pay for a facility and the equipment needed for production. They can also save on labor costs such as wages, training and benefits. Some companies look to contract manufacture so they can cut out there over head expense and bring up their profit margins so they can focus more on marketing. Mutual benefit to co-packing is setting a contract between the manufacturer and the company it’s producing for that may last several years. The manufacturer will know that it will have a steady flow of business until then.What are the perks and benefits of Co-Packing / Co-Manufacturing for bakery & food manufacturers?