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Focus on core competencies via co-packing

August 31, 2005
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Co-packers are rapidly becoming a preferred strategic solution that allows food and beverage manufacturers to focus on core competencies while achieving the market customization they require.

With retailers firmly in the driver's seat, and established and emerging channels exerting greater pressures for product/packaging tailored to their specific needs, contract packaging-or co-packers-are rapidly becoming a preferred strategic solution that allows food and beverage manufacturers to focus on core competencies while achieving the market customization they require.

Whether that need is for primary, secondary or display packaging, co-packing operations are providing services that range from graphics and structural design services to logistics management. That need has blossomed into a US contract packaging marketplace estimated at between $17.5 and $21.5 billion and growing at 15 to 20 percent annually, according to Contract Packaging: Strategic Opportunities & Profit Potential, a new research report from Packaging Strategies.



"What's integral to understanding the complex co-packing industry is ‘fit,'" explains co-author Jim Peters. "There has to be the right fit between the contract packager and the CPG (consumer packaged good companies)." To find that fit, co-packer management is a must.

According to a case study involving a dry food products maker highlighted in the report, following are some key insights that can be applied to future co-packing projects:

  • Involve the packaging function early in the process to ensure the package will meet all product requirements and support the brand image/display for all overall product offering;
  • Consider the contract manufacturer a partner in the process to bridge knowledge gaps;
  • Build time in the project plan to conduct one or two trial runs at the contract manufacturer's location to identify production unknowns, verify product density, package size and line speeds and most importantly, establish product and package quality levels;
  • Tap into the contract manufacturer's network of packaging materials suppliers to leverage its relationships and known processes, systems and expectations.

For more information about this study, please contact Packaging Strategies at 610-436-4220 (ext. 11) or online at: orders@packstrat.com, or www.packstrat.com, then click on Market/Technology Studies.

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