Brand owners often partner with co-packers to produce their product. It enables them to focus time and financial resources on building the brand, rather than tying up money to build and operate a manufacturing facility.
Strong partnerships between brand owners and co-packers depend on transparency and negotiating for win-win outcomes. Respect the co-packers’ need to make a profit. They are not in business to provide free services.
Always have a written agreement when using a co-packer. Co-packing agreements are legal contracts that define financial arrangements, policies, processes and each party’s responsibilities. Retain a lawyer with experience in the packaged foods industry to draw up an agreement or review the co-packer’s contract. Take time to read the fine print to understand what you are getting into.
Before disclosing product specifics, ask prospective co-packers to sign a confidentiality or non-disclosure agreement (NDA).
Conducting due diligence is necessary to protect your business and mitigate risks. A myriad of details need to be worked out.
After initial discussions about products, volumes and pricing, the following are some important points to address:
When partnering with co-packers, take steps to protect your business and brand. Doing your homework and putting plans and safeguards in place will mitigate risks, and allow you to focus on growing your business. When the brand is successful everyone benefits.
As a packaged foods consultant, Birgit Blain helps brands that struggle to maintain listings. Her experience includes 17 years with Loblaw and President’s Choice. Contact her at [email protected] or learn more at www.BBandAssoc.com
© Birgit Blain
This article appeared in Food in Canada magazine.
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