Strictly, a co-packer packages a product and a co-manufacturer makes it. A co-packer takes your finished bulk product, sauce in totes or nut butter in pails, and fills, seals, labels and cases it. A co-manufacturer takes your recipe and your specifications and makes the product from raw ingredients, usually packing it too. In everyday use the two words get swapped, and most small-batch "co-packers" are really co-manufacturers. So the useful questions aren't about the word. Whose recipe is it? Who buys the ingredients and packaging, you (toll) or them (turnkey)? Which steps do they do: making, packing, or both? And there's a third arrangement that looks similar and isn't: private label, where you buy the manufacturer's own product and put your label on it. In the example below, a nut butter maker compares a packing-only co-packer, a co-manufacturer using its recipe, and a private-label peanut butter.
The short version
- Co-packer, strictly: packs your finished product. Co-manufacturer: makes it from your recipe, and usually packs it.
- In practice the words overlap; ask what they actually do.
- Whose recipe: yours with a co-packer or co-manufacturer; theirs with private label.
- Who buys materials: you, in a toll arrangement; them, in turnkey.
- Which steps: making, packing, or both, and who does the quality checks.
- Compare on cost per good unit, minimum run and cash tied up, not the fee alone.
- TaroStack keeps a co-packer as a site of your own, with its stock. More below.
The three arrangements
| Co-packer (packing) | Co-manufacturer | Private label | |
|---|---|---|---|
| What they do | Fill, seal, label and case your bulk product | Make your product from your recipe, and pack it | Sell you their own product with your label |
| Whose recipe | Yours | Yours | Theirs |
| Who buys materials | You, or them by agreement | You (toll) or them (turnkey) | Them |
| What you control | The product itself | The recipe and specs | The label and the price |
| Can another brand sell the same thing? | No | No | Yes, under another label |
Toll and turnkey are explained in toll manufacturing, finding one in how to find a co-packer, and private label in what is private label food.
An example: three quotes for peanut butter
Red Oak Nut Butters, a made-up nut butter maker in Little Rock, Arkansas, sells about 2,500 twelve-ounce jars of peanut butter a month and grinds it in a shared kitchen. It priced three ways out:
| Packing only | Co-manufacturer, its recipe | Private label | |
|---|---|---|---|
| Run | 2,500 jars | 2,500 jars | 5,000 jars |
| Minimum | 2,000 | 1,200 | 5,000 |
| Setup | $150 | $400 | $0 |
| Fee or labor a jar | $0.80 (its own grinding plus filling) | $0.70 | $2.60 a jar, delivered |
| Ingredients and packaging a jar | $2.67 | $2.58 | $0.10 for its labels |
| Cost a good jar, about | $3.65 | $3.59 | $2.78 |
| Cash out before it sells | $9,025 | $8,850 | $13,800 |
Packing only saved little, because Red Oak still ground every jar itself. The co-manufacturer took the grinding off its hands at about the same cost. Private label was cheapest per jar, but it's somebody else's peanut butter, the same product any other brand can buy, and a run of 5,000 is two months of sales. Red Oak chose the co-manufacturer, with its own roast and its own recipe. The numbers behind the co-manufacturer quote are in nut butter co-packer.
Get the calculator
Download the co-packer comparison. One sheet: for each option, the run size, minimum, loss, setup, fee, ingredients, packaging, freight and storage; the good units, the run's cost, the months to sell it, the cost of each good jar and the cash out before it sells fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The comparison picks a partner. After that, the stock lives in two places: your own shelves and the co-manufacturer's warehouse, and the jars on a grocer's order may come from either.
How TaroStack does it
TaroStack keeps a co-manufacturer as a site of your own, so its stock is in the same counts as yours.
A co-packer's premises as a site. The co-manufacturer's warehouse can be a site, with its stock shown, and transfers between it and your own space shown in transit.
Lots from the run. Finished jars from a run come in with their lot and best-before date, so a recall still runs from the peanut lot to the grocer.
True cost. The fee, ingredients and freight go into what a jar costs, so the price you set covers the new way of making it.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Stock at the co-manufacturer | An emailed report | A site of your own |
| Jars on the truck between sites | Not tracked | A transfer in transit |
| Which run a grocer's jars came from | The co-packer's records | Lots on the order |
| What a jar now costs | Re-worked by hand | True cost with freight |
More than one site is on Standard, at $99 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.