Snack brands know how challenging it can be to scale up production and reach a wider market. You may have a great product, but do you have the resources, equipment, and expertise to produce it in large quantities and meet the demands of your customers?
That’s where co-manufacturing comes in. Co-manufacturing is a process where you partner with a third-party manufacturer. That company can make your product according to your specifications and quality standards. By outsourcing the production of your business, you can focus on your core competencies, such as product development, marketing, and distribution.
However, co-manufacturing is not a one-size-fits-all solution. It requires careful planning, clear communication, and mutual understanding between you and your co-manufacturer. To help you navigate this complex and rewarding relationship, here are some key factors to consider:
1. Adequate Preparation:
Before you approach a potential co-manufacturer, you need to have a solid business plan that outlines your product formulation, target market, sales strategy, and growth projections. You also need to have a clear vision of your brand identity, values, and differentiation. This will help you find a co-manufacturer who shares your vision and can deliver on your expectations.
2. Volume Alignment:
One of the most important aspects of co-manufacturing is volume alignment. You need to estimate how much product you need to produce and how often. This will depend on factors such as your sales channels, inventory levels, shelf life, and seasonality. You also need to factor in the minimum order quantity (MOQ) and lead time of your co-manufacturer. Ideally, you want to find a balance between meeting your demand and avoiding overproduction or underproduction.
3. Managing Expectations:
Co-manufacturing is a partnership that involves trust and transparency. You need to communicate your expectations clearly and frequently with your co-manufacturer. This includes aspects such as quality standards, packaging requirements, labeling regulations, testing protocols, and delivery schedules. You also need to be open to feedback and suggestions from your co-manufacturer. Those insights can be valuable and experience to improve your product or process.
4. Effective Communication and Collaboration:
Communication is the key to any successful relationship, and co-manufacturing is no exception. You need to establish regular communication channels with your co-manufacturer, such as phone calls, emails, meetings, or site visits. You also need to collaborate on important decisions and milestones, such as packaging design, product testing, and trial runs. By working closely with your co-manufacturer, you can ensure that your product meets your specifications and expectations.
5. Learning from Co-Manufacturers:
Co-manufacturing is not only a way to outsource production but also a way to learn from experts. Your co-manufacturer may have years of experience in the industry and access to the latest technology and equipment. You can benefit from their knowledge and skills. First, by understanding how they operate, what challenges they face, and what solutions they offer. You can also interact with their production team, who may have valuable tips and tricks to optimize your product or process.
6. Alternatives to In-House Production:
You may be tempted to produce your product in-house, especially if you have a small-scale operation or a unique product. However, this may not be the best option for your long-term growth. Producing in-house may require you to invest in expensive equipment, hire additional staff, comply with complex regulations, and manage multiple aspects of your business simultaneously. This may distract you from your core strengths and limit your potential.
7. Leveraging Industry Growth:
The co-manufacturing industry is growing rapidly, especially in the snack sector. This means that there are more options and opportunities for emerging snack brands than ever before. You can leverage this growth by exploring different co-manufacturers who can offer various capabilities, such as organic certification, gluten-free facilities, or specialized equipment. You can also network with other snack brands who have successfully partnered with co-manufacturers and learn from their experiences.
Finally, co-manufacturing is a powerful strategy for emerging snack brands who want to scale up. However, it requires careful planning, clear communication, and mutual understanding between the brand and the co-manufacturer. Here we talked about snack brands, but these tips can be easily applied to other segments within the CPG industry. Co-manufacturing can maximize the success of your brand no matter what product you are planning to bring to market.