Thinking about using a co-packer, but aren’t sure if you’re ready? There are clear benchmarks to identify if you’re prepared to take the next step… or not.
At the end of the day, whether or not to work with a co-packer is a business decision. There’s got to be a tangible business benefit for you to do it. Some good reasons to add a co-packer: Could it save you money? Could it help you meet an ever growing demand for the product? You’ll need to be the judge and jury on whether the reasons are legit.
Here are a the reasons when it makes sense to add a co-packer based on my own experience starting three different food brands and working with my own . By the way, you can check out The Complete Guide to Profitable Co-Packing for free here.
1. Demand is just too big for your home kitchen
You can only scale your production so far in the home kitchen.
If you can start out in your home kitchen, start there. It’s easy to get off the ground. You have low overhead (since you own your house). Plus, consumers are loving the handcrafted, smallbatch movement. Only when you make something in your house can you call it “homemade”.
But sometimes, consumer demand goes beyond your stovetopand out of your single oven.
First of all, congrats! It’s a big move to get out of the house. I’ve done it with one of three companies. It’s scary, fun, exhilarating, and absolutely terrifying at the same time. Plus, growing a food business is tough when you’re competing with over 120,000 other products in the grocery store. This is a huge milestone. Congratulations!
Ok, let’s get serious… What does that mean for your little food biz?
You need to produce in larger quantities. And that means leaving the kitchen you’ve called home for the past year or two. That means you’ve got to look at other options in your area. One of those options is copacking. As you work through this guide you’ll learn if copacking is the right decision for you.
2. You need to abide by state laws
Following rules… A great reason to move to a co-packing facility.
Not everyone has the luxury of starting their food business from their home kitchen. Only 14 states have the right to preheat their stoves. And even then, they may only be able to produce baked goods not a process food like mustard, BBQ sauce, or marinades. Consider yourself lucky.
What laws are there to abide by?
- FDA inspected facility
- Food Safety Modernization Act
- USDA Laws & Regulations (only if you handle raw meat products)
- Third Party Audit Certification needed if you want to sell to Whole Foods)
And that’s just a short list. These laws force people to manufacture outside their home. It dramatically increases startup costs, but it’s the same reason many states lack smallbatch goodies it’s simply too expensive to start.
I know, it’s unfortunate many Americans haven’t experienced the creativity of small food companies.If you’re in a state where home bakeries and processing isn’t permitted, look into leasing commercial kitchen space to get started. You should only look at copacking when you have the demand to sustain it (see #1).
3. You’d rather sell your product
Making more time to sell and build relationships with retailers is smart.
Let’s face it. Being stuck in a kitchen leaning over a 190 degree kettle isn’t glamorous. You smell like your product, machines break, and you never get around to doing anything else. That means limited selling, networking, and business development.
If you have limited time to sell, you have limited time to build your business.
It’s a harsh reality of the food industry. Many small food producers are stuck making their product and don’t have time to sell it and build a business. Sure, you could outsource the sales function, but nobody sells your product better than you do. That’s why co-packing can be a smart move.
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Co-packing gives you the flexibility to be the sales person you want to be. Want to build a hot sauce empire? You’ve got the time now. Want to be represented by distributors across the country? You’ve got the time.
Remember, the only way you’ll stay in business is if you can move enough cases of your products to be profitable. And to do that, you may need to let other people manage certain parts of your business.
Plus, moving more product means you’re growing your business. And that means you can quit that pesky fulltime job of yours. Oh, and speaking of jobs…
4. You work fulltime and need someone else to make the product
Starting a business while still employed and getting a steady paycheck is smart.
Working 50 – 60 hours a week on top of slaving over a stove to make jam is not an ideal worklife balance. Things can get crazy pretty fast long nights, equipment breaking, you know the deal.
Many of you need to have another income to support your dream of running a food business.
Just like you, I worked fulltime while growing my company. Yes, it inhibited growth for a few years, but I needed to support myself. As I grew my company, the after work hours weren’t enough to meet demand. I needed a change.
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That’s when I turned to co-packing. If I could have someone else make my product with my oversight, I could devote my afterwork and weekends hours to building a business. You can do the same thing!
If you’re exhausted from working full-time, plus running a part-time food business, think about copacking. Trust me, the first run will totally be worth it.
Think about it: no more chopping produce, no more smelling like your product for days, and my personal favorite no more capping. That’s what you pay someone else