What are the advantages in using a custom dry blender/co-packer?
A. The advantages of using a custom blender or co-packer are many and varied, depending on your needs. The most basic advantages are:
- Cost management
Using a contract manufacturer gives you a high degree of manufacturing flexibility and access to a wide range of capabilities without major capital or personnel investment. A small or medium sized company can increase its volumes without disrupting current operations, allowing it to be more nimble and capitalize on market opportunities. And a start-up operation can even outsource all its production.
- Added production volume without capital investment
- Complements a company’s existing production
- Avoids interrupting existing production
- Access to equipment and/or capabilities a company may not already have (R&D formulation assistance; pilot plant; supply chain management; etc.)
- Reduces start-up time
- Gives efficiencies in purchasing and labor
By using the services of a custom dry blender, a company has the ability to add production without substantial investment in equipment, labor, packaging and raw materials. The co-packer, who often has better buying power because of greater volumes, optimizes raw material and packaging costs.
- Upfront financial investment is lower
- Allows business expansion without capital investment
- Labor + ingredient cost efficiencies
- Reduced overall financial commitment
What are the disadvantages in working with a co-packer?
A. Although there are a lot more positives than negatives when working with a co-packer, there are some obvious drawbacks. As with outsourcing anything, there is a:
- Loss of control
Loss of control
It’s very important to choose a production partner you can really trust. It’s your brand and your reputation that are on the line. Make sure the company you select has systems in place to make your product to your specifications, consistently and safely, whether you’re there watching or not.
- Choose a reputable partner
- Be sure quality systems are in place
You can’t get away from the fact that there will be a cost to hiring a co-packer. How you manage that cost is important. The old adage, ‘you get what you pay for’ holds true with co-packing. Because of this, you may not want to base your choice of co-packer on price alone. The least expensive co-packer may not have the capabilities you need or the quality measures in place to protect your brand. On the other hand, the most expensive co-packers may have capabilities you don’t need and won’t want to pay for.
Find a co-packer that fits your business model with the volumes you want. Some co-packers have very high minimums, requiring a large volume. Too much inventory, not only has a high cost when produced, but if you can’t move that inventory, it will cost you again. Figure out what you really need from a co-packing partner.
- Match co-packer capabilities to your needs
- Check minimum volumes
- Don’t let price alone dictate your decision
How do you find a custom dry blender or co-packer?
A. The obvious answer is the Internet. Fire up your favorite search engine and enter ‘custom dry blending.’ The problem is that you’ll literally end up with millions of results. While the Internet is a great place to start and also to eventually research potential partners, it may not be the easiest place to narrow your options.
A more streamlined approach is to actually do a bit of networking and ask for references. You can do this the traditional way and pick up the phone or you can take advantage of your social networking skills and post a question online. Either way, using your contacts to get references of companies with good reputations is a great way to narrow your search.
- Surf the Web
- Phone a friend—use your food industry network
Other useful resources:
- Local university food science programs
- Food industry associations or trade organizations
- Trade publications/directories/websites
What size co-packer is right for you?
A. While size does matter, it’s also essential that you find a co-packer that provides you with a sense of security and trust. It’s important that you select a co-packing partner that is the right size for your needs. If you’re a large entity, then maybe you want or need an equally large co-packer that is very efficient and can do large runs.
But if you’re just starting up or you have a smaller business, then some co-packers are going to be too big for you and won’t be able to give you the time and attention you need. In this case, you may want to find a company that is willing to grow with you and will take the time to really determine what it is that you need. You may also need an organization that is flexible with order sizes and lead times.
Large or small, you’ll be able to tell if the co-packer is right for you, if they give you their undivided attention. An experienced co-packer should not only be able to give you thoughtful feedback on your project, but they’ll most likely be able to add in an idea or two that you hadn’t thought about. You should feel confident that the partner you choose will treat your project as if it were their own, whether you’re on site or not.
Think of your business needs and then ask questions:
- What are their minimums?
- How flexible are they?
- What are their lead times?
- Do they have/provide services that you need? (Formulation assistance, culinary, ingredient procurement, logistics, regulatory, compliance)
- Ask for references
What type of contracts or legal agreements are involved?
A. The most common type of agreement you’ll run into when working with a custom dry blender is a nondisclosure or confidentiality one. Generally a confidentiality agreement is a two-way contract that protects both the customer (you) and the producer. It basically says that anything you learn from the co-packer or they learn from you is confidential. This agreement is meant to reassure both parties that their ideas, knowledge and expertise are safe.
Other potential agreements/contracts:
- Inventory (stocking agreements)
- Payment terms
- Financial liability
What quality and food safety standards/controls should you check for?
A. This is probably the most important thing you need to know. In the end, it is these quality and food safety measures that will preserve your product, your brand integrity and your company’s reputation.
Food safety is as much about environmental issues—sanitation, allergen management, pest control, ingredient segregation—as it is about microbiological contamination. Reputable manufacturers manage facility quality, safety and sanitation through Hazard Analysis and Critical Control Points (HACCP) plans using Current Good Manufacturing Practices (cGMPs) and third-party audits.
There are many third-party certifying entities. The current gold standard of quality auditing within food manufacturing is the British Retail Consortium (BRC) Global Standard for Food Safety, which was the first standard to be approved by the Global Food Safety Initiative (GFSI). This is a very stringent third-party audit that examines the quality management standards within a manufacturing facility.
Other audit schemes aligned with the GFSI are as follows:
- SQF (Safe Quality Food) 2000
- IFS (International Food Safety)
- Dutch HACCP
- ISO 10040
- Global Gap
A manufacturer should be able to supply you with a HACCP statement and copies of its quality audits. Review third-party audits and verify them with the auditing entity. Also be sure that a manufacturer has the ability to provide microbiological testing and that certificates of analysis will accompany your product, if applicable.
When you’re satisfied that an organization has all its quality procedures and paperwork in order, don’t be shy about asking to visit the site that will be doing your manufacturing. (See Q. 8)
- Be sure facilities have HACCP plans with cGMPs
- Review third-party audit of facility—must have an approved rating
- Check certifications (i.e., kosher, halal, organic, if applicable)
- Visit the site
What type of process capabilities should a custom dry blender have?
A. This is one of those areas that is dependent upon your need—high volume, low volume, straightforward blending or complex mixing. Once you’ve determined your need, you’ll have to find out if a company has the right equipment to blend and package product to your specifications.
Products of different densities and shapes are blended with different equipment to maintain their integrity and ensure they are delivered in their intended state and appearance. Lower density product that is fluffy like bread crumbs needs to be blended with a different machine than seasoning, which is of a higher density. Special air handling controls also should be in place to prevent cross-contamination of flavors, because you won’t want a savory flavor migrating into a sweet product.
It’s also important to assess a custom dry blender’s packaging capabilities and consider how you’ll want to package your product. Will it be packaged in a pouch, canister, multi-wall bag or bulk box? Will you want to use “environmentally friendly” packaging? Discuss your vision for product packaging and solicit input from the dry blender. Ask to see examples of products they’ve packed and make sure the quality meets or exceeds your expectations.
Points to remember
- Match your needs to a custom dry blender’s equipment
- Check blending and packaging equipment capabilities
- Verify that controls are in place to prevent cross-contamination of flavors
- Be sure product can be packaged as required
What should you look for on a site visit?
A. There’s no better way to assess a co-packer/custom dry blender than to visit their facility. It’s a way to look under the hood, so to speak, and kick the tires. It also gives you an opportunity to assess the personnel and see how they work.
Look at the obvious. Is the facility well lit, clean, organized and free of vermin? Be sure there are no holes in the walls, obvious leaks in the roof or other signs of deterioration of the building. Are the employees dressed properly, following sanitation procedures and do they seem content? Remember they’re a direct reflection of their work environment.
Floors and walkways should be clean and all ingredients should be clearly labeled and stored neatly. There should be separate storage of allergen-containing materials and those that are temperature sensitive. Any dry blending facility will have an odor, but if there is good air control management it will be a mixture of smells, not one dominant smell.
You’ll be able to get a firsthand look at safety and sanitation practices. You can also see how products are handled and packaged, and you’ll get a glimpse of how the facility operates. With this information, you’ll begin to be able to determine whether an environment is right for you. The bottom line is that you should feel comfortable with the facility and the personnel. This is just one measure, though. You’ll still need to review third-party quality and safety audits to be sure that quality and safety measures are in place.
Pre-site visit checklist
- Well-lit facility
- No leaks in roof
- No holes in the walls
- Uniformed employees, wearing hairnets, masks and gloves as needed
- Clean and organized workspaces
- Clearly labeled ingredients, stored neatly in pallets and on racks
- No open containers; no leaking ingredient containers
- No signs of temporary maintenance; tape, paint cans
- Allergen segregation
- Air control—use your nose—shouldn’t be just one dominant smell
Post-site visit checklist
- Were you allowed to see all areas of the facility?
- Were personnel warm and friendly?
- Were you introduced to key personnel for your project?
- Were you given ample time to discuss your project?
- Do you feel confident in the project team?
- Did the facility and the personnel provide you with a sense of security and trust?
What do I need to know about sourcing ingredients?
A. Common ingredient sourcing can be left to your co-packer. Your formula may also require unique ingredients that a co-packer will have to buy specifically for you. Note: these unique ingredients become the immediate responsibility of the customer.
In most instances, a co-packer will have greater purchasing power at more economical prices because of the volumes bought. That said, you should still investigate a company’s supplier quality management program to ensure the ingredients being used are the expected quality and are contaminant free. Review third-party audits, as well.
Ingredient suppliers should also be able to provide the co-packer with a letter of guarantee or letter of continuing guarantee that the product they’re supplying meets the specs they claim. Certifications for kosher, halal, organic and other requirements should be available for your perusal.
- Take advantage of the purchasing power of a co-packer
- Find out about supplier quality management programs
- Review letters of guarantee
- Inventory cost of unique ingredients are customer’s responsibility
What R&D capabilities are necessary?
A. Actually, this is not something that every co-packer will have. But it is something you may want to seek out. Having R&D capabilities at your co-packer can be very beneficial, especially for small to medium-size firms.
A co-packer’s R&D department can complement one’s own or even act as a development arm. Many R&D staffs combine the talents of research chefs with food scientists. Having this dual expertise helps them take products from the kitchen to the manufacturing floor with ease.
Even if you already have a formulation, you may want to consider working with a co-packer that has R&D capabilities. At some point because of ingredient prices or availability, you may need to adjust your formula. A partner with R&D expertise can help with ingredient substitutions, as well as assisting you in extending beyond your current product line.
- Culinary expertise
- Formulation assistance
- Ingredient substitutions
- Matching abilities
- Product line extension
How do I manage storage, warehousing and logistics planning?
A. All of these functions can be managed in part by your co-packer. Again it’s a matter of matching a co-packer to your needs. If you need just-in-time manufacturing or a floor stock agreement, a trusted co-packer can work with you on volume projections and produce and ship your products as needed. Generally product is shipped FOB from a co-packer right to a customer’s distribution center.
- Assess your needs
- Seek a partner that matches your needs
In the end, finding the ideal custom dry blender/co-packer is all about a relationship. It’s essential to choose a partner you can really trust and that has systems in place to manufacture your product to your specifications, consistently and safely.