Small Batch Co-Packer: Minimums, Costs, and When to Use One

A small batch co-packer makes runs of a few hundred to a couple of thousand units for brands too small for a regular co-packer's minimums. They're often a shared kitchen or food incubator with a production team, a small plant that started as a brand itself, or a university food lab that takes outside work. They cost more a unit than a large co-packer and about the same as making it yourself, once your own hours are paid; what they buy you is time and a licensed facility without a minimum you can't sell. In the example below, a jam maker selling 1,000 jars a month pays $3.30 a jar making it itself, $3.35 with a small batch co-packer, and $2.72 with a co-packer whose minimum is two and a half months of sales. Below is what small batch co-packers do, the three options side by side, when each makes sense, and a free quote calculator.

The short version

• Small batch co-packers take runs from about 300 to 2,000 units; larger ones often start at 2,500 to 20,000.
• Expect a higher fee a unit; the setup is smaller, and so is the cash tied up.
• Compare against your own kitchen with your hours paid, not free.
• Ask whether the facility is registered with FDA and licensed by the state for your product.
• Bring a recipe by weight, specs, packaging and labels; small co-packers rarely source for you.
• Move to a larger co-packer when its minimum is a couple of months of your sales.
• TaroStack keeps track of what's at your co-packer, by lot, as a site of its own. More below.

What a small batch co-packer does

Most work toll: you send or pay for the fruit, sugar, jars and labels, and they make, fill, cap, label and case it to your recipe. Some will buy common ingredients for you; few will develop a recipe. Their minimums are low because their equipment is small, a 40-gallon kettle and a semi-automatic filler, so a run takes a day, not an hour. That's also why their fee a unit is higher. Every one of them is a food facility, so it registers with FDA (21 CFR 1.225) and holds a state processing license; ask to see both. Jams, jellies and preserves aren't acidified foods under FDA's definition (21 CFR 114.3), which widens the choice for a jam maker; a salsa or pickle brand needs a co-packer set up for acidified foods. This is general information, not legal advice. What a co-packer is, in general, is in what is a co-packer.

Three options side by side

Pine Barrens Pantry, a made-up granola, jam and hot sauce maker in Hammonton, New Jersey, I use in these examples, sells about 1,000 nine-ounce jars of jam a month:

Making it itself, Pine Barrens rents a shared kitchen for 8 hours, $240, and pays two people $20 an hour to fill 50 jars an hour: 80 cents of labor a jar, two days a month. The small batch co-packer costs 5 cents a jar more and gives back those two days. The larger co-packer is 58 cents a jar cheaper than making it yourself, $580 a month, with $6,550 paid out before each run sells and two and a half months of jam on its shelves. How to compare quotes in more detail is in co-packer vs commercial kitchen.

When each makes sense

• Your own kitchen: while sales are small and changing, and your hours are cheaper than the fee.
• A small batch co-packer: when your hours are better spent selling, or the kitchen can't keep up, and a larger co-packer's minimum is more than three or four months of sales.
• A larger co-packer: when its minimum is a month or two of sales, the product keeps, and you have the cash for a run. For Pine Barrens at 1,000 jars a month, that's now; at 300 a month, a 2,500-jar run would be eight months of jam.

The jump between them is also a jump in what you hand over: recipes by weight, a spec sheet, labels printed in the co-packer's quantities. Starting with a small batch co-packer is how a brand learns to work that way before the minimums get bigger. How minimums work on both sides is in minimum order quantity.

Get the calculator

Download the 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 unit 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

With jam at a small batch co-packer, granola still made in your own kitchen and hot sauce somewhere else, your stock sits in three places, and so do your jars and labels. A spreadsheet can't say how many cases of strawberry jam are at the co-packer, or whether there are labels for next month's run.

How TaroStack does it

TaroStack keeps track of what's at your co-packer, by lot, as a site of its own.

The co-packer as a site. The co-packer's premises can be a site, so the jars and labels you send are a transfer, shown in transit until they arrive, and the cases on their shelves are yours, counted at their place. More than one site is on Standard at $99 a month.

Runs as batches with lots. Each run is a batch at the co-packer's site that takes your fruit, sugar and jars off stock there and gets a lot, so a jar in a shop leads back to its run. A recall report shows which shops got it.

What to send next. Jars, lids and labels come up on the reorder list in days of cover, with each supplier's lead time, so the next run's packaging arrives before the co-packer asks for it. How stock across places works is in multi-location inventory.

Sites, transfers, batches and lots 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

What is the minimum order for a small batch co-packer?

Often a few hundred units; in the example, 300 jars. Larger co-packers often start at 2,500 units or more.

Is a small batch co-packer cheaper than making it yourself?

About the same, once your own hours are paid. In the example, $3.35 a jar against $3.30, and it gives back two days a month.

How do I find a small batch co-packer?

Ask shared kitchens and food incubators near you whether they co-pack, check your state's university food science extension, and ask other small brands who makes theirs.

Do small batch co-packers need to be FDA registered?

Yes, a facility that makes or packs food registers with FDA, and it holds a state processing license for the products it makes.