Today we will be talking about co-packing verses cooking in house. The hope of every small business is to grow big enough to either build your own manufacturing facility filled with steam jacketed kettles, fillers and conveyors or out-source your manufacturing to a co-packer.
Let’s first talk about keeping your production in house. Quality control and production schedule are two pro’s . No one will be more concerned about your product being done right more than you. Having the flexibility of producing products at will is always better that having to wait possible weeks to have inventory produced. Most co-packers have minimum sales quantities that can have a negative effect on cash flow. Non of us what inventory sitting on the shelf too long. Another advantage to keeping your production in house is co-packing for other companies. You have made a sizable investment in equipment making it good business to keep that equipment working for you.
The pro’s of out-sourcing your manufacturing. No equipment investment and or possible debt. Allows more time and money for product promotion. Greater capacity for faster growth as long as your co-packer can handle the increase.
As a business owner it is very important to be able to determine your strengths and weaknesses. If your talents are sales and marketing than having your product co-packed would be the smart play in most cases. If your more hands on and enjoy production than keeping your production in-house might be the way to go.
There are always variables in making complex important decisions. My goal here is to give the reader a place to start. I would also recommend getting as much outside in put as possible in your decision making process. This is not the time to be a know it all!
Final note. I cannot stress this enough,picking the right or wrong co-packer can make the difference between success and failure. It is always best to use a co-packer that is currently doing jams and jellies that use pectin. I have had customers use co-packers that have not done pectin based jams and jellies. In most cases I have been able to bring them up to speed. In some cases have traveled to the co-packer and spent the first day of production with the production manager to make sure everything went smooth. Having said that, there is no substitute for experience. As always we can help you in finding and working with a new co-packer. I work with many all over the country.