In Brazil, nearly 30% of the installed capacity in the CPG industry remains idle.
Much of this capacity belongs to suppliers that still operate invisibly in the market, without leveraging the full potential their infrastructure offers.
Co-manufacturing is no longer just a tactical on-demand production service. Today, it serves as a showcase where suppliers of all sizes can present their co-manufacturing capabilities in CPG, validate new SKUs, and win strategic clients — often without investing more than what they already have.
In this article, you will understand why co-manufacturing has become such a relevant commercial platform for CPG suppliers, how they are monetizing underutilized capabilities, and winning new contracts by strategically positioning themselves in this ecosystem.
The challenge of showcasing co-manufacturing capabilities in a concentrated sector
The CPG sector is notoriously concentrated. A few large groups control most of the leading brands in food, beverages, personal care, and cosmetics. This creates a dual challenge for suppliers: competing for contracts and gaining visibility among purchasing decision-makers.
Furthermore, idle production lines are a reality for much of Brazil’s industry. According to data from CNI (National Confederation of Industry), the average utilization of installed capacity in the food and beverage sector was 71% in 2023 — meaning nearly 30% of capacity was underutilized.
This free capacity represents a powerful commercial asset. But to turn capacity into revenue, suppliers must be found and remembered by brands at the right time. Co-manufacturing is consolidating as the fastest tool to achieve this.
Co-manufacturing as a commercial platform to showcase capabilities
Traditionally, co-manufacturing was seen as a tactical solution for scaling production, handling seasonal demands, or operational contingencies. But this has changed. Today, it functions as an environment where suppliers can showcase their co-manufacturing capabilities, launch new SKUs, and validate product categories without direct commercial risk.
How does this work in practice? Imagine a dairy factory specialized in protein yogurts that traditionally produces for its own brand. By qualifying as a co-manufacturer, it starts receiving requests to develop plant-based lines, lactose-free versions, and limited editions for DTC brands.
With this approach, the factory:
-
expands its portfolio without needing to launch new own products;
validates new categories and technologies;
-
connects with brands looking for agile and flexible suppliers.
A good example is Duas Rodas, a Brazilian multinational of ingredients and flavors, which, besides supplying raw materials, also acts as a co-manufacturer of functional beverages for kombucha and natural shot brands, leveraging the clean label trend and reducing risks for client brands.
Real opportunities for monetization and expansion
By positioning as a co-manufacturer, suppliers not only monetize idle capacity but also gain access to new segments, categories, and channels previously less accessible.
Direct advantages include:
-
volume growth via multiple contracts;
-
entry into emerging segments such as plant-based foods, protein snacks, and natural cosmetics;
-
improvement of average ticket by offering packages beyond production: formulation, filling, logistics, and even packaging development.
Case: the boom of functional beverages
According to Euromonitor, the healthy and functional beverages market grew 13% in Brazil in 2023. Taking advantage of this movement, suppliers like Leven Foods — originally a producer of natural juices — adapted their plants to bottle kombuchas and flavored waters, producing for DTC and private label brands. Result: a 35% revenue growth from co-manufacturing contracts in two years, according to the company itself.
Cost reduction and risk dilution in operation
Besides extra revenue, co-manufacturing enables suppliers to reduce fixed costs and improve operational margins. By diluting expenses across different contracts, it is possible to reduce the impact of idleness and gain flexibility to absorb volume fluctuations.
Another benefit comes from collective sourcing: serving brands in similar categories increases input and packaging purchase volumes, reduces average prices, and improves negotiations.
According to Deloitte’s “The future of contract manufacturing” report, suppliers operating through co-manufacturing can reduce logistics costs by up to 12% and raw material costs by up to 8% by consolidating purchases and operations for different clients.
Strategic positioning and access to new markets
Being present in co-manufacturing hubs puts suppliers on the radar of mid-sized brands, digital channels, and private labels from large retail chains — audiences that prioritize agile and flexible partners to test new products.
Moreover, expanding segments such as plant-based foods, natural supplements, and clean beauty cosmetics value suppliers with a history of innovation and modular capabilities. Co-manufacturing is the most accessible gateway to these markets.
Benchmark: high-growth cpg categories for co-manufacturing capabilities
| category | growth in 2023 (brazil) | potential for co-manufacturing |
|---|---|---|
| functional beverages | +13% | high |
| healthy snacks | +11% | medium/high |
| natural cosmetics | +9% | high |
| plant-based foods | +15% | high |
How to position yourself to leverage this movement
To capture these opportunities, suppliers should:
-
map available capacities and processes, structuring them as a portfolio of solutions;
-
define strategic categories with higher demand potential and technical differentiation;
-
participate in marketplaces and co-manufacturing hubs like GrowinCo., where brands access suppliers by capacity, location, and category;
-
be present in business rounds, trade fairs, and sector groups, where brands seek specialized partners;
-
structure fast case studies and limited editions to prove capacity and speed.
Those who expose themselves grow
In the CPG sector, visibility is as valuable as production capacity. Co-manufacturing has moved from just an operational solution to a strategic showcase for suppliers.
By presenting their capabilities in a structured and accessible way, suppliers turn their plants into commercial assets, expand their portfolios, and monetize underutilized resources. In a market where niche categories and seasonal launches grow in double digits, being on the right radar is as important as having the right price.
If you are a supplier in the CPG sector and want to turn your available capacity into new contracts, GrowinCo. is the ideal platform for that.
Specializing in connecting brands to reliable and qualified co-manufacturers, GrowinCo. allows your industrial plant to gain visibility among brands seeking agility, flexibility, and partners with solid technical backgrounds.
The platform functions as an intelligent sourcing hub, where brands and suppliers meet to negotiate based on capacity, location, category, and production profile.
Additionally, it lets you publish your idle capacities, special line offers, and customized conditions for different demands, increasing your chances to close quick and recurring deals.
If your factory has room to produce more, it’s time to put those capacities to work for you.
Discover GrowinCo. and learn how to monetize what is currently idle by positioning yourself as a strategic partner in a sector that values who delivers agility and reliability.
