Organic Co-Packer: Certification, Records and Quotes

An organic co-packer is a co-packer certified to handle organic products, which is the only kind that can make a product you'll sell as organic. Under the USDA organic rules, each operation that handles a product sold as "organic" or "made with organic" ingredients has to be certified, with few exemptions, so a conventional co-packer can't make your organic granola however good its plant is. Your own certifier also wants to see the co-packer in your organic system plan, and the records from both sides have to match. In the example below, a granola maker starting an organic line of 2,000 bags a month pays $4.37 a bag making it itself in its own certified kitchen, $4.27 with a certified co-packer using its organic ingredients, and $3.78 with a certified co-packer that buys organic ingredients at volume. Below is the certification rules, records, what the co-packer needs, three quotes, and a free calculator.

The short version

• Every operation that handles a product sold as organic is certified, unless exempt; that includes the co-packer.
• Exemptions are narrow: for example, $5,000 or less of organic sales a year.
• Your certifier lists the co-packer in your organic system plan; ask for the co-packer's certificate.
• Organic ingredients need their own certificates, and records that show every pound in and out.
• Ask how the co-packer keeps organic and conventional apart on shared lines.
• Organic ingredients cost more; the co-packer's fee often doesn't.
• TaroStack keeps lots and their certificates, and shows what went into every run. More below.

Who has to be certified

Except for the exempt operations, each operation or portion of an operation that produces or handles agricultural products sold, labeled or represented as "100 percent organic", "organic" or "made with organic" ingredients has to be certified (7 CFR 205.100). The exemptions include an operation with $5,000 or less of organic sales a year, and certain retail establishments (7 CFR 205.101). A co-packer that makes and packs your organic granola is handling it, so it has to be certified itself. Your brand, if it sells under its own name, is certified too, and your certifier will want the co-packer's certificate and its place in your plan. This is general information, not legal advice. How organic records work for a maker is in organic certification record keeping.

Records that match

A certified operation keeps records adapted to its business that fully disclose all its activities and transactions in enough detail to be readily understood and audited (7 CFR 205.103). In practice, that means every pound of organic oats you buy, every pound sent to the co-packer, every run it made, every bag it returned and every bag you sold add up. An inspector may run a mass balance across both of you; how that audit works is in organic mass balance audit.

What an organic co-packer will ask you for

• Your organic certificate and your certifier's requirements.
• The recipe by weight, with each ingredient's organic certificate and supplier.
• Organic packaging and labels, checked by your certifier before printing; the seal has rules of its own.
• Your plan for keeping organic separate if the co-packer also runs conventional products.
• A forecast and a deposit, since organic ingredients have longer lead times.

Three quotes compared

Cache Valley Granola Co., a made-up granola maker in Logan, Utah, I use in these examples, starts an organic line and expects about 2,000 twelve-ounce bags a month:

Making it itself means certifying Cache Valley's own kitchen and keeping its conventional and organic runs apart. The first co-packer saves about 11 cents a bag and takes on the organic handling, while Cache Valley keeps buying the organic oats and nuts. The second buys organic ingredients at its own volume, 20 cents a bag cheaper, and saves another 49 cents in all, with two and a half months of granola, which keeps, in its warehouse. The organic ingredients, $2.60 a bag against about $1.77 for conventional, are most of the difference from the conventional line. How quotes compare more generally is in co-packer vs commercial kitchen.

Get the calculator

Download the organic co-packer quote calculator. One column for each quote and one for making it yourself: type the run you'd order, the minimum, the loss, the setup, the fee or your labor, ingredients, packaging, freight and storage, and the run's cost, the months it takes to sell at your sales a month, the storage while it sells, the cost of each good bag 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

Organic oats and conventional oats in the same warehouse, organic runs at a co-packer and conventional ones at home, certificates for every lot, and an inspector who wants the pounds to add up across both. A spreadsheet can't keep each lot's certificate with it, show which runs used which organic lots, or produce the mass balance in an afternoon.

How TaroStack does it

TaroStack keeps lots and their certificates, and shows what went into every run.

Lots with their certificates. Each lot of organic oats or nuts is received with its lot code and fields of your own, such as the certificate number and the certifier, so every pound's paperwork is with it. Organic and conventional oats are separate items, so they can't be mixed up on a recipe.

The co-packer as a site. The co-packer's premises can be a site, so organic ingredients sent there are a transfer, shown in transit, and what's on their shelves is counted as yours. More than one site is on Standard at $99 a month.

Runs and the mass balance. Each run is a batch that records the organic lots it used and the bags it made, and each sale records the lots it shipped, so every pound in, used and out is on record for the inspector. A recall report shows which customers got a lot. How lot tracking works is in what is lot tracking.

Lots, batches, sites and transfers are on Standard at $99 a month for more than one site. 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.

Questions people also ask

Does a co-packer need to be certified organic?

Yes, if it handles a product you'll sell as organic, unless it qualifies for one of the narrow exemptions. A conventional co-packer can't make an organic product.

Do I need my own organic certification if a co-packer makes my product?

A brand selling organic products under its own name is generally certified too, with the co-packer named in its organic system plan. Ask your certifier for your case.

What records does organic certification require?

Records that fully disclose all your activities and transactions, in enough detail to be audited: what came in, what was made, and what was sold.

Is co-packing organic food more expensive?

The co-packer's fee is often about the same; the organic ingredients cost more. In the example, organic ingredients are $2.60 a bag against about $1.77 conventional.