Innovation in the CPG industry is expensive. Scaling production costs even more. And when companies look internally, many find underutilized assets, operational inefficiencies, and a time-to-market that no longer keeps pace with market demands.
Is there a viable solution? The equation can be solved — and it doesn’t necessarily require investing in new factories, hiring dozens of engineers, or completely redesigning the production chain.
More and more, leaders of major CPG companies are turning to reliable co-manufacturing as a real lever for efficiency, scalability, and cost control.
In this article, we explore why reliable co-manufacturing is becoming a strategic element in reducing operational costs, how it connects with SKU rationalization and process automation — and why GrowinCo. is at the heart of this transformation.
The CPG landscape: margin pressure meets innovation demands
The consumer packaged goods sector faces a daily dilemma: it must launch new products more frequently while protecting margins amid volatile costs and strict regulations.
According to EY’s 2023 report on operational strategies in CPG, 81% of leaders surveyed named reducing operational costs as their number one priority for the next three years. The same study identified the biggest challenge as “optimizing structure without slowing innovation.”
This is the core dilemma reliable co-manufacturing helps solve.
Co-manufacturing: more than just outsourcing production
First, it’s important to clarify: co-manufacturing is not just about outsourcing production.
The traditional model of outsourcing due to lack of capacity is giving way to a strategic industrial collaboration model, where major brands work with reliable partners to:
- Reduce fixed costs and CAPEX on infrastructure
- Scale production flexibly
- Test SKUs with lower risk
- Accelerate launches while maintaining quality and traceability
Reliable co-manufacturing thus becomes an extension of the company’s own operations — increasingly regarded as part of the industrial master plan, not just an emergency fix.
How co-manufacturing cuts costs (and boosts efficiency)
1. CAPEX and maintenance savings
Building, running, and maintaining a plant is expensive.
For context, Bain & Company reports that the average cost to set up a new production unit in food and beverage exceeds US$20 million — excluding recurring maintenance and line upgrade costs.
Co-manufacturing eliminates these expenses by turning fixed costs into variable costs.
2. Scale gains via consolidation
3. Supply chain optimization
Producing closer to points of sale reduces transport and inventory costs. Some companies even use co-manufacturing sites as strategic logistics hubs, cutting lead times and warehousing expenses.
4. Smarter SKU management
By combining co-manufacturing with market intelligence, companies can rationalize their portfolio. Low-performing SKUs can be tested or discontinued with less impact, while best-sellers are prioritized in production lines.
How Ambev doubled economic efficiency with collaborative logistics
Ambev, one of Latin America’s largest CPG players, faced significant logistics bottlenecks in its national operation. As part of its efficiency drive, it implemented a collaborative logistics model with one of its maltose suppliers.
Instead of operating fixed routes with owned trucks, the two companies began sharing vehicles and routes, optimizing fleet use and reducing trips with empty loads.
Results were impressive:
- 100% increase in economic efficiency
- 40% reduction in CO₂ emissions
- Significant cuts in direct logistics costs
This case, documented in the Journal of Transport Literature, demonstrates how strategic collaboration — including co-manufacturing, distribution, and integrated sourcing — is a concrete path to cost reduction in CPG, with simultaneous sustainability and scale benefits.
Source: Impacts of Collaborative Logistics: A Brazilian Brewing Sector Case Study
Co-manufacturing + automation: the power duo
If co-manufacturing reduces structural burdens, automation delivers precision and speed. Even better, the supplier has already made this investment.
Choosing co-manufacturers with automated lines offers benefits like:
- Less rework and waste
- Lower batch variability
- Simplified compliance
- More predictable production with less intervention
Plants equipped with OEE (Overall Equipment Effectiveness), digital traceability, and ERP system integration are now a reality among GrowinCo. partners — becoming prerequisites for large companies treating co-manufacturing as a strategic pillar.
SKU rationalization: the link between efficiency and relevance
According to Nielsen, the top 25 CPG companies launched 13% more SKUs in 2023. However, over 50% of these products do not reach a second replenishment cycle — meaning development, production, and inventory costs are wasted.
Reliable co-manufacturing enables companies to:
- Test products in smaller batches
- Validate demand before scaling
- Group similar productions
- Reduce downtime and setups between SKUs
The outcome: less SKU dispersion and greater efficiency per SKU.
GrowinCo.’s role in this new ecosystem
GrowinCo. connects major brands with reliable co-manufacturers prepared to operate at the highest standards of quality, flexibility, and traceability — all powered by data, curation, and technology.
With GrowinCo’s platform, CPG companies can:
- Identify ideal partners by category, location, and certifications
- Track and scale projects with reduced risk
- Integrate sourcing and market intelligence
- Operate with agility, control, and predictability
If your goal is to transform heavy infrastructure into smart operations, GrowinCo. is the ideal partner to make that journey possible.
Efficiency is no longer about doing everything in-house
The largest companies have understood that efficiency depends not on size alone, but on operational intelligence. With the right mix of co-manufacturing, automation, and SKU rationalization, healthy growth is possible — controlling costs and accelerating decisions.
And leaders in this transformation know: collaborating strategically is more effective than building everything from scratch.
