Department of Food Science

Food Processing FSE98(10-99)

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Choosing and Using a Copacker

John E. Rushing, Ph.D.
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What is a copacker? one to more accurately predict overhead

costs due to manufacturing. Using a
Copackers manufacture and package foods copacker can also reduce lead-time in
for other companies to sell. These getting a product to market. Choosing a
products range from nationally-known copacker who already has processing
brands to private labels. lines in place almost makes
manufacturing, packaging, and labeling a
Entrepreneurs choose to use the services of food product a matter of placing an order.
copackers for many reasons. Copackers The copacker may have experience with
can provide entrepreneurs with a variety of similar products which is transferable to
services in addition to manufacturing and the product you wish him to copack.
packaging products. They can often help
in the formulation of the product. With established business, the copacker
will usually have the proper regulatory
The copacker may function only as a certifications, lines of credit for
packer of other people=s products or may purchasing supplies and ingredients,
be in business with his own product line. insurance, food industry contacts and
They may be, in fact, manufacturing sources to get the job done efficiently.
several competing products. The range of They should be familiar with quality
services available from a copacker will parameters, food safety requirements, and
vary depending on the size and experience shipping needs. They will have the
of the copacker and the type of facilities proper facilities for receiving and storing
and the capacity of their plant. ingredients and can arrange storage of
finished product. Some copackers will
What are the advantages to using offer other services for entrepreneurs
a copacker? such as product stability testing,
nutritional labeling, formulation
There are many advantages to using a assistance, ingredient substitution, and
copacker. The most obvious is to reduce other product development services. In
startup costs for the food entrepreneur. addition, they can offer suggestions on
Capital costs of equipment and facilities packaging and labeling the product,
can be enormous. Using a copacker allows usually based on the types of filling,
capping and labeling equipment in their Confidentiality may be a problem as
facilities. They can direct you to formulations, ingredients and product
professionals who can assist you in the specifications must be shared with the
design and marketing of your product. copacker. Oftentimes it is necessary to share
They usually offer the advantage of buying customer and sales information. The
supplies and ingredients in bulk. They can copacker has access to other information
arrange palleting and shipping to meet the such as sales, volumes and price. This
needs of the buyer. information can be protected to some degree
with agreements, but confidentiality can
What types of obstacles might an never be assured.
entrepreneur face?
Disagreements between customers and
In addition to the above advantages for using copackers are not easily resolved. Disputes
a copacker, food entrepreneurs may face a and litigation may tie up ingredients,
variety of obstacles to manufacturing their supplies and finished product for extended
own product. They may not possess the periods of time. Finding an alternative
experience and expertise necessary to copacker who can produce the same product
manufacture a food product. There may be may prove difficult.
zoning laws, which restrict certain business
activities on the entrepreneur's property. Using a copacker can be expensive. A
Loss of economies of scale for the copacker must recover direct and indirect
entrepreneur may be such that the cost of the overhead and costs. Additionally, a
ingredients and packaging may be copacker must also make a profit.
prohibitive. Consequently, the costs associated with
copacked product may be high.
What are some disadvantages to
using a copacker? Before you visit the copacker

An obvious disadvantage to using a copacker Before choosing a copacker, do your

is a loss of control over the product and its homework. You should have business and
manufacture. Many copackers will request marketing plans in place which outline your
the entrepreneur be available in the plant the product needs in terms of size and type of
first time the product is run so they can container, number of units per given period,
ensure it is made to the customer's price to the buyer and sales price. Small
satisfaction. However, the presence of the Business Technology and Development
customer is usually not requested for Center can be of assistance. Get technical
subsequent runs. help from a university, a consultant or a
testing laboratory to determine needs for
An entrepreneur is at the mercy of the product stability and safety.
copacker's production schedule, their fixed
costs and their method of doing business. Once you have established the product
The product must conform to the copacker's information, write preparation and process
equipment and facility limitations. In some instructions. Write specifications for
cases, the copacker may be producing a ingredients, packaging materials, regulatory
competing product. compliance, and finished product.
Prepare a checklist of needs you have
from the copacker Will you need storage of ingredients,
supplies, or finished products? Will you
• Will you require product development need the copacker to order or ship these
assistance such as safety determinations, materials? How much inventory will you
coloring, stabilizers and emulsifiers, or need to have on hand?
preservatives?
• What are special product concerns such Will the potential buyers of your product
as; acidity, thermal process, refrigerated require that the food be manufactured under
ingredients, refrigerated product storage? particular quality, safety, or certification
systems such as HACCP, ISO 9000, Kosher
• Are there special ingredient concerns? or Halal? Do regulations require USDA
• Will the product require specialized compliance, or certification for low-acid
ingredients in terms of variety, function, canned foods or acidified foods? Is there
or piece size? mandatory HACCP compliance required? Is
• Will ingredient preparation such as onsite a third party audit required?
chopping, peeling, coring, or sugaring be
necessary? How do I find the right copacker?
• Can ingredients be purchased ready-to-
use? For the entrepreneur, the best source of
• Are there alternative sources for information about copackers, their abilities
specialized ingredients? and how they work with entrepreneurs is
often other entrepreneurs. Meet other
Consult with your attorney and insurance entrepreneurs at state association meetings,
carrier. What do they feel you should food shows, and trade shows. More
require of your copacker? Will a site visit be specialized copackers will often advertise in
necessary for them? food industry trade periodicals and
Remember, scale-up of production from the directories. State directories of
home kitchen to the first plant trial may manufacturers will provide information
produce unsaleable or unusable product. about manufacturing companies. Those who
Factors such as rate of heating, agitation list private-label products are usually
during incorporation of ingredients, holding copackers. University extension services
at high temperatures and pumping can affect and state food and drug or agricultural
ingredient functionality and product marketing agencies can also be of help.
appearance. Adequate product development
prior to the pilot run will minimize this, but Bring your specifications and checklist to
unforeseen factors may still cause your first meeting with the copacker. You
differences in product. may wish to consult your attorney for
instructions on protecting the confidentiality
How will the final product be distributed? If of your documents and conversation. Some
it is to be shipped to a central warehouse, copackers will restrict confidentiality
what requirements will you have for the agreements only to written specifications,
copacker? Many companies are under formulations, pricing and customer
mandatory solid waste reduction. Will the information. Most will not agree to non-
product be shipped in boxes or overwrapped compete arrangements, as that would restrict
trays? On which kind of pallet shall they be their livelihood and their business interests.
furnished? Should the boxes be You may be able to use a model
overwrapped or glued to keep them on the confidentiality contract furnished by the
pallet? copacker.
The costs of all services at a copacker must contract can help you avoid a lot of problems
be recovered. Be sure to have an agreed- later on. Be sure you understand what you're
upon price for each of these. Once an contracting for. Check with your attorney.
agreement is reached, be sure you will need a
contract for services. Be sure to get a Below are items which should, at a
guaranteed price for at least a year. minimum, be addressed in the contract:

Some copackers have an in-house R&D • What are the services you are contracting
department. This can produce a considerable for? Who will handle raw product
savings in time and development costs. testing? Where are records to be kept?
How will final product quality be
Ask to tour the copacker's facilities. Note checked?
the state of cleanliness and order. Look at
the most recent inspection report. Is the • What ingredients and supplies are you
copacker operating under a quality control or responsible for purchasing or providing?
food safety system such as HACCP? Do What is the disposal for excess
they have the equipment needed to process, ingredients or supplies which you
label, and package your product correctly? purchase or furnish? Where will they be
stored between processing runs?
Request from the copacker the names of
others he has copacked for. It is a good idea
to speak with them about what it's like to • What processing manipulations will be
work with the copacker; ask about his required for ingredients such as slicing,
commitment to schedules and to quality. dicing, or blanching? Are piece sizes
Ask about concerns they might have. specified?

Share both your present and future needs • Will there be samples furnished for your
with the copacker. Early in the relationship, approval prior to the first production run?
you may need small production runs, later Will there be storage/stability or finished
you may wish to have more volume. Can product tests?
the copacker deliver on production? What
about peak seasons? In the specialty foods • Are you to be present and consulted
business, there are often seasonal needs, such during processing plant runs? If so, are
as, the Christmas holidays, when turn-around you covered under insurance or
time for resupply of stores may be short. Workmen's Compensation?
Can the copacker accommodate this?
• Will you have any coverage under the
Usually, early in the process, it will be manufacturer's product liability
necessary to produce product for insurance? If so, what will it be? Note
storage/stability testing. You may wish to that it will be necessary for you to
produce samples in alternate sizes or furnish your own liability insurance to
different containers. Check to make sure sell your product to stores.
these can be processed.
• What are the critical factors which must
The contract with the copacker be met in processing, such as pH,
packing temperatures, or heat
Obviously, written orders should be placed processing? Require documentation that
with the copacker. Specifications should be these have been measured and met.
furnished for supplies, ingredients,
processing and finished products. A written
• Are ingredient substitutions accepted? • How much lead-time is necessary for the
What are the limits? Are these covered next and subsequent production runs to
in your ingredient specifications? Note be delivered?
that manipulation of ingredients may
render your ingredient statement or • Will the copacker be required to furnish
nutritional information on your label grade certifications, third party audits or
inadequate. other certifications of lots and batches?
The copacker should certify that the label
• The contract should note scheduled statements are accurate.
processes which must be filed and
certifications which must be obtained. If • What lot or batch coding is to be used?
the product is listed under a marketing Where will it be placed on the container
program such as "Goodness Grows in and how will ingredient processing and
North Carolina" there must be testing records be filed to correlate with
certification of use of required the code?
ingredients.
• What is the manufacturer's recall plan?
• What is the delivery date of the finished Be sure you have a copy. How are you
product? Must it be immediately to be notified?
removed from the premises?
• Is there a noncompete agreement with
• What are the payment terms? Usually the copacker? Are confidentiality and
these are 10% down and the remainder privacy issues covered?
on delivery.
• What finished product testing will be
• What will render the product provided?
unacceptable? What are the appearance
factors such as color, separation, piece While there may be many other points to be
size, and texture? Who will judge covered in the contract, the above represents
adequacy of flavor and taste? those points for which many disagreements
occur. While we recommend an attorney's
• What are the appearance factors for the advice on contracts, the small entrepreneur
container, such as label placement, may find the cost prohibitive.
closure gasket materials and closure
color, or neckband placement, size and
color? How tight is the closure to be? Make the Relationship Good

• Who is responsible for disposal and A good working relationship with your
disposal costs or rework of unacceptable copacker and an agreement which covers
product? what he is expected to provide will make
your venture more pleasant, and hopefully,
• The entrepreneur should furnish labels, more profitable.
what size are they to be, what style and
orientation, and how are they to be Get the copacker on your team. Give him a
wound? (It is recommended you have chance to be properly reimbursed for his
the copacker specify the labels in writing services, then concentrate on selling your
to be sure they will run on his product!
equipment).