A co-packer, short for contract packer, is a company that makes and packages your product for you, to your recipe and under your brand, in its own licensed facility. You keep the brand, the recipe and the customers; they supply the kitchen, the equipment and the people, and charge a fee per unit, usually with a minimum run. Food brands use co-packers when demand outgrows their own kitchen, when a buyer wants production in a certified facility, or when the equipment for the next step (bottling, canning, a fryer line) costs more than the brand can sensibly buy. Below are the three kinds, what one costs against your own kitchen with real numbers, how to choose one, and the records you still keep.
The short version
- A co-packer makes your product, to your recipe, under your label, in their facility.
- Full service means they buy everything; toll means you supply the ingredients and packaging; most deals sit between.
- Expect a fee per unit, a minimum order quantity per run, and a setup or test-run charge.
- The per-unit cost is often higher than your kitchen's; what you buy is capacity, a certified facility and your time back.
- Check the minimum against your shelf life: a run you can't sell before its date is a loss.
- You still own the records: what you sent them, what they made, what came back and where it went.
- TaroStack tracks your stock at a co-packer as one of your sites, lot by lot. More below.
The three kinds of co-packing
| Kind | Who buys ingredients | Who buys packaging | Fits |
|---|---|---|---|
| Full service (turnkey) | The co-packer | The co-packer | Brands with no production of their own, or scaling fast |
| Partial | The co-packer, or some each | Usually you | Brands with a special ingredient or printed packaging |
| Toll, or contract manufacturing | You | You | Brands with their own supply chain who need the equipment and the hands |
The words overlap: some people say co-manufacturer for a company that makes the product and co-packer for one that only packs it, and plenty use them for the same thing. Ask what's included rather than relying on the name.
What it costs, against your own kitchen
Windward Roots, the made-up taro business I use in these examples, makes its 5 oz taro chips in its own kitchen for about $2.10 a bag, all in. Suppose it got a co-packer quote, partial service: the co-packer buys and fries the taro and oil; Windward Roots supplies its own printed pouches, labels and cartons (49 cents a bag, worked out in packaging cost per unit).
| Per 5 oz bag | Own kitchen | Co-packer |
|---|---|---|
| Chips: ingredients, frying, packing | included below | $1.85 fee |
| Pouch, labels, carton (supplied by the brand) | included below | $0.49 |
| Freight back to the brand's warehouse | $0.06 | |
| Cost per bag | $2.10 | $2.40 |
| Minimum run | none | 5,000 bags |
| One-off test run | $750 |
Thirty cents a bag more, so why do it? Because the kitchen was full, the frying took two people three days a week, and a regional grocer wanted twice the volume. At 5,000 bags a run, the co-packer turns those days into selling time and removes the ceiling. Whether that pays depends on the price you get: at a $3.41 distributor price, $2.40 still leaves a margin, as in requirements for selling food to grocery stores.
The minimum order against your shelf life
Here's the trap that catches new brands. Windward Roots sells about 700 bags of the 5 oz chips a week, so a 5,000-bag run is seven weeks of stock, $12,000 of it at $2.40 a bag, paid for up front. The chips keep 90 days from the day they're packed, and the grocery chain wants plenty of that left when they arrive. So the run has to sell through in well under three months, while the next run is booked in the co-packer's schedule weeks ahead. Order too little and you run out; order too much and the last cartons go to the discount shelf. How much life a buyer expects at delivery is in minimum remaining shelf life.
Choosing a co-packer
| Ask | Why |
|---|---|
| Do you make products like mine, on equipment like mine? | A bakery won't bottle sauce well |
| What are your minimums, lead times and run schedule? | Decides your stock and cash |
| What food safety certification or audits do you hold? | Big buyers often ask for a certified facility |
| What insurance do you carry, and what do you need from me? | Both of you need to be covered |
| Who owns the recipe and the specs? | It should be yours, in writing |
| How do you code lots, and what records do I get for each run? | A recall runs through their records and yours |
| What happens if a run is out of spec? | Rejected product, remakes and who pays |
Visit before you sign, and run a test batch. The first run with a co-packer always teaches you something your recipe didn't say, like how long to fry at a scale your kitchen never reached.
The paperwork
The co-packer's facility is the one making and packing the food, so it's the one that registers with FDA. Facilities that manufacture, process, pack or hold food must register, unless an exemption applies (21 CFR 1.225 and 1.226), so if you hold finished product in your own warehouse, check whether that applies to you too. The contract should say who handles a recall, who keeps which records, and how fast the co-packer gets you a run's lot records when you ask. This is general information, not legal advice.
Where this stops working
With a co-packer, your stock lives in three places: your packaging at their site, finished product in your warehouse, and cartons on the way between. On a spreadsheet that's three columns nobody updates at the same time. The co-packer emails a run report with their lot codes, you copy it in by hand, and the day a grocery chain asks which run a carton came from, you're searching an inbox. Meanwhile your pouches run short at their site the week before a run, because nobody noticed they'd used more on the last one than the spec said.
How TaroStack does it
TaroStack treats a co-packer as what it is: another place your stock lives. A contract manufacturer's premises is a kind of site, alongside your kitchen, warehouse and shop, so you see exactly what you have there, lot by lot.
Sending them what they need is a transfer. Pouches, labels and cartons go from your warehouse to the co-packer's site, with stock in transit until it lands, and a transfer note to print. You always know how many pouches are sitting at their place, and lanes and lead times between sites mean planning knows how long it takes to get them there. A run is a batch recorded at their site: it takes your packaging, and anything else you supplied, from the stock you sent, notes which lots went in, and puts the finished chips into a lot with its own code and date. If the co-packer buys everything, the run arrives as a purchase instead, received with their lot code and best-by date, freight spread across the delivery.
The minimum stops being a guess. Planning turns your orders and your own sales history into how much to make and when, out to the horizon you choose, and says in plain words what will run short and what will expire before it's sold. So you book a 5,000-bag run knowing it'll sell through, and see the week the next one has to be booked. Customers carry their own shelf-life rule, and a run made too early for a customer's minimum days-left is flagged before it's made.
And the recall question has an answer. One report shows which supplier lots went into which run, which customers got which cartons, and what's still in your warehouse or at the co-packer's, with contact details. Every movement is recorded with who, when and why, and every list exports to CSV for the co-packer or an auditor. One thing to know: the co-packer's fee is bought as a service on the purchase order, so it's on the order rather than added into each bag's stock cost; put it in your price sheet beside the cost TaroStack gives you.
Lots, receiving and recalls are on every plan, from $49 a month; more than one site, transfers, recipes, batches and planning are on Standard at $99, which covers your warehouse, your shop and a co-packer. 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.