Evaluating and choosing a co-packer is just one of many important aspects of a brand owner’s product development. Even though contract packaging is mainly handled on the backend, working towards a successful manufacturing run is probably one of the most challenging and vital areas to get right.
Before beginning the search for a co-packer, think about what you expect from them. Does your brand need any additional services a standard co-packer may not offer? Or does your brand primarily need product packaging and storage services?
Before approaching any co-packers, discuss potential plans with an accountant and lawyer to determine things such as if the contract packer has suitable facilities, production capacity, and food safety standards. Listed below are some essential questions to ask yourself and potential co-packers to get the quality of service you need to help your food business thrive:
Questions to ask yourself before choosing a co-packer
- Is the product already being made, or is a new product needed?
- What production run steps do you need help with?
- What would your ideal production schedule be like?
- Does the product require research and development or scale-up?
- Does the product require special ingredient sourcing, processing, or product packaging?
- Will new or special equipment be needed?
- What packaging material and shipping options are needed?
- Does the formulation have allergens or high-risk ingredients, like raw food of animal origin?
- What will the ingredient sourcing process be like?
- Are there unique ingredients? How do you feel about ingredient substitutions?
- Are there ‘unique allergens’? What kind of precautionary labelling is planned?
- Do you require food safety or quality audits or certifications, such as HACCP, GFSI or Organic?
- What government regulations must the product meet?
- What product testing will be needed?
- Will you provide the artwork for labels and packaging?
- Where will raw materials and finished products be stored?
- How will inventory be tracked for ordering and recall purposes?
- How much product is needed? Is it a one-time contract or ongoing? What size batches?
- Do you have product liability insurance? What other insurance is required?
- Does your business plan include accurate pricing and cost?
Questions to ask a prospective co-packer
- Are they making a similar product for your competition?
- Do they have extra capacity to handle your batch? Is this capacity temporary or ongoing? Will this capacity be increased in the future as demand rises?
- Do they have the manufacturing equipment needed to produce your finished product? Is the equipment food grade?
- Is the production process automated or manual?
- Does their facility meet all government requirements?
- What is the full extent of services they offer?
- Do they use programs for food safety (GMP, HACCP, ISO, GFSI) or quality (organic, halal, kosher?)
- Are they certified, or are they working towards compliance or certification?
- Do they use a written GMP program and have written records?
- Are critical control points (CCPs) in their process identified and monitored?
- Is the facility allergen-free, or will it allow allergens? Is there an allergen control plan?
- Is there any subcontracting of services or storage? If yes, how is this controlled?
- Has the company had a product recall in the last five years?
- Does the company have comprehensive CGL insurance, including contractual and product liability?
- How far is the facility from the brand’s target market?
- Does the co-packer have the cash flow to keep it stable? Has the company been sued?
- Where are raw materials sourced: domestically or offshore? What proof of quality do they ask for when obtaining raw material?
- Are there any water quality issues?
- What lab testing does the manufacturer do? Are there any pathogens of concern in the manufacturing facility?
- If refrigeration is needed, what cold-chain monitoring is used?
- How and where do they ship products?
- Are past customer references available?
Co-packer on-site checklist
Before finalizing an agreement with your contract packager, an on-site visit is suggested. Visiting the facility allows a client to double-check claims made by the contract packer, such as the condition and cleanliness of the facility, the quality of staff training, and efforts taken to control food safety. Inspections can also reveal hazards undeclared or unnoticed by the contract manufacturer. The visit should give you an accurate impression of facility operations and quickly confirm the suitability of the facility. When visiting the facility for the first time, ask yourself and your copacker these questions:
- Are the grounds tidy? Are they free of clutter and debris?
- Do the neighbours pose a risk?
- How well maintained is the facility?
- How are pests or unauthorized persons kept out?
- Do storage practices prevent contamination?
- Are all materials stored off the ground and away from the wall?
- If there is refrigeration, is it monitored? Are records kept?
- How are non-food chemicals stored? Are all containers and materials well labelled?
- Are equipment and food contact surfaces food grade?
- Is there preventative maintenance and calibration of equipment?
- Is there a cleaning schedule? How clean are the facility and equipment?
- Are staff well trained, tidy and efficient?
- Are training records available?
- Are activities done using Standard Operating Procedures (SOPs)?
- Are batch records, inventory records, and other documents accurate and complete?
- Are specifications and test results on file for all ingredients and finished products?
- Are government inspection and third-party audit reports available?
- Is there evidence CCPs are monitored? Are thermometers, pH meters or other instruments available?
- Are any other unusual activities going on in the facility?
Co-packer Contract Checklist
Having a solid agreement between you and your co-packer is key to having a successful relationship. Before signing, you and your co-packer should consult your respective accountants and lawyers to go over any contracts and paperwork. Included below is information to consider adding to your agreements:
- The names of the companies involved
- Quantities of product to be made
- Expected quality (ingredient, product and packaging specs, and lab tests)
- Financial terms (costs and fees, ordering, billing, and payment methods)
- Contract timelines and delivery schedules
- Legal issues (ownership of formulas, dispute resolution, insurance)
- Complaint handling and recall (how and by whom?)
- How to terminate the agreement
- Minimum orders and amount of inventory to hold
- Allowed substitutions and sub-contracting
- Lead times
- Shipping and delivery details
- Processing methods and specifications
- Allowances for waste (Includes trim, shrinkage and packaging waste)
- Copies of co-packer quality manuals