Do you need to hire a co-packer/manufacture for your food product first before getting a distributor

[zacharie101]

My product is a protein bar that I currently make at a commercial kitchen. I want to get it into stores, but I'm low on funds to get it manufactured.

Request

 

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[B V Marlon]

You could contact a manufacturer and get an idea of cost. Then you could tout it round stores, with samples from your current production to secure preorders. Get payment in advance and then fund the production run from the preorders. Rinse and repeat.

 

[Scot]

Keep in mind, this advice is from being a binge watcher of Shark Tank and The Profit...

You have to keep Scale in mind always. The question is, do you need a copacker yet? How many units can you reliably produce right now at full production? Do you seee this amount being big enough to fill orders and PO's for the next 6 months?

I definitely recommend talking to copackers to discuss unit cost. That way you'll have a contact ready to go once you need production. But as long as your commercial kitchen space doesn't cost more than the cost of outsourcing, no point in increasing the cost per unit when you don't need to just yet.


Keep in mind, this advice does not take into account any FDA and health department regulations.

 

[G-Man]

I'm currently part of a food product startup that uses a co-packer. There are a few things to keep in mind:

• At the beginning you will be low on their production schedule priority. This means carry inventory, but if you're low on funds....
• You're going to get it N30 ExW from the copacker. It then spends 5-6 days in transit to the DC, at which point they usually drag another 4-5 days before calling it an official receipt date. This means getting the A/P 15+ days before getting paid. Even if the distributor picks up from the copacker, they're still gonna find a way to delay payment.
• A food distributor is gonna rape you with chargebacks because they know you can't audit it. Sometimes I think their entire strategy is just to make money from the vendors. This means 50 point margins are a must in the beginning

Honestly, even if it feels like it means less money at the beginning, I'd keep production small and just in time for as long as possible. Also, ship directly to as many customers as possible. Food distributors are a challenge for the uninitiated.

 

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[Kid]

Sell online

 

[zacharie101]

Keep in mind, this advice is from being a binge watcher of Shark Tank and The Profit...

You have to keep Scale in mind always. The question is, do you need a copacker yet? How many units can you reliably produce right now at full production? Do you seee this amount being big enough to fill orders and PO's for the next 6 months?

I definitely recommend talking to copackers to discuss unit cost. That way you'll have a contact ready to go once you need production. But as long as your commercial kitchen space doesn't cost more than the cost of outsourcing, no point in increasing the cost per unit when you don't need to just yet.


Keep in mind, this advice does not take into account any FDA and health department regulations.

Thanks for the reply. Before heading into stores I would need to make sure that my food label nutritional value is accurate and I also need a branded packaging, I currently only use a clear see-through wrapper. That why a manufacturer would come into play as far as helping determine the accurate nutritional value and making sure the my packaging is FDA compliant and determining shelf life of my product.

Wouldn't stores want all those stuff handled before carrying my product made in a commercial kitchen?

 

[zacharie101]

You could contact a manufacturer and get an idea of cost. Then you could tout it round stores, with samples from your current production to secure preorders. Get payment in advance and then fund the production run from the preorders. Rinse and repeat.

Thanks for the response. I don't have any industry connections or experience, wouldn't that come into play as far as getting payment and gaining trust of stores?

 

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[zacharie101]

I'm currently part of a food product startup that uses a co-packer. There are a few things to keep in mind:

• At the beginning you will be low on their production schedule priority. This means carry inventory, but if you're low on funds....
• You're going to get it N30 ExW from the copacker. It then spends 5-6 days in transit to the DC, at which point they usually drag another 4-5 days before calling it an official receipt date. This means getting the A/P 15+ days before getting paid. Even if the distributor picks up from the copacker, they're still gonna find a way to delay payment.
• A food distributor is gonna rape you with chargebacks because they know you can't audit it. Sometimes I think their entire strategy is just to make money from the vendors. This means 50 point margins are a must in the beginning

Honestly, even if it feels like it means less money at the beginning, I'd keep production small and just in time for as long as possible. Also, ship directly to as many customers as possible. Food distributors are a challenge for the uninitiated.

How do you make sure that your food product is FDA compliant and determine the accurate nutritional values in the beginning? Did the Copacker handle all of that for you?

Would you mind sharing how you did everything before getting the copacker?

Which is better a food broker or food distributor?

 

[B V Marlon]

Thanks for the response. I don't have any industry connections or experience, wouldn't that come into play as far as getting payment and gaining trust of stores?

You could start locally, with small independent stores, and visit them in person with your samples. That way you establish rapport with the business owners and could start building sales up from a small base. Once you're more established, then you could start reaching out to larger stores, when you've already got a proven market for your product and feedback/testimonials.

 

[Scot]

Nutritional content and labels aren't handled by your co-packer. You'll have to find a lab to do a nutrition evaluation on your food. The only thing a co-packer really does is produce, package and ship your product.

You can do your own packaging and nutrition content without a co-packer.

 

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[zacharie101]

Nutritional content and labels aren't handled by your co-packer. You'll have to find a lab to do a nutrition evaluation on your food. The only thing a co-packer really does is produce, package and ship your product.

You can do your own packaging and nutrition content without a co-packer.

Can you please tell me how I can do both without copacker? My product is protein bars

 

[Scot]

I googled "food nutrition testing lab" and got a full page of results. You'll have to sort through each one to find a price you agree with.

As for labels, I don't really know. Maybe some of the ecom guys like @AllenCrawley have experience with packaging.

 

[G-Man]

How do you make sure that your food product is FDA compliant and determine the accurate nutritional values in the beginning? Did the Copacker handle all of that for you?

Would you mind sharing how you did everything before getting the copacker?

Which is better a food broker or food distributor?

• You give the co-packer specs to manufacture and package the products, if you have the specs, then you should be able to engineer the nutrition label. If you're not confident in that, send it to a lab
• We have always used a co-packer, but that was because the company started with a huge amount of capital (not from me, though.)
• You'll need both. A distributor is just that, a distributor. You'll get POs and payment through them, but they are order takers. They only order if their customers do. You'll need brokers to get the product in front of buyers for the actual stores.

You're not there yet. They're going to kill you with slotting fees in the beginning, too. Sell online. Find your unique selling point. Can you create a story for your product that emotionally connects you and your customer? This is very effective with food products. Were you a skinny guy that now looks like the Arnold? Were you a fat guy that's now lean? Were you some kind of athlete? Anything to give your product a story.

If you sell online you could pair that with paper coupons that are redeemable on the website.... there's a ton of races in America, and a lot of them do gift packets. A lot of them are organized by volunteers that will put your stuff in the goodie bag if they receive some samples for themselves. A little googling will show you there are indexes that list about every race.

Focus on smaller outlets if you must do B&M. I don't know what that looks like in the health/fitness space, but in the snack space, liquor stores are great. Small chains and a lot of them will let you offer the employees spiffs.

 

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[Scot]

Rep++ for that idea about race packets!

 

[zacharie101]

I googled "food nutrition testing lab" and got a full page of results. You'll have to sort through each one to find a price you agree with.

As for labels, I don't really know. Maybe some of the ecom guys like @AllenCrawley have experience with packaging.

• You give the co-packer specs to manufacture and package the products, if you have the specs, then you should be able to engineer the nutrition label. If you're not confident in that, send it to a lab
• We have always used a co-packer, but that was because the company started with a huge amount of capital (not from me, though.)
• You'll need both. A distributor is just that, a distributor. You'll get POs and payment through them, but they are order takers. They only order if their customers do. You'll need brokers to get the product in front of buyers for the actual stores.

You're not there yet. They're going to kill you with slotting fees in the beginning, too. Sell online. Find your unique selling point. Can you create a story for your product that emotionally connects you and your customer? This is very effective with food products. Were you a skinny guy that now looks like the Arnold? Were you a fat guy that's now lean? Were you some kind of athlete? Anything to give your product a story.

If you sell online you could pair that with paper coupons that are redeemable on the website.... there's a ton of races in America, and a lot of them do gift packets. A lot of them are organized by volunteers that will put your stuff in the goodie bag if they receive some samples for themselves. A little googling will show you there are indexes that list about every race.

Focus on smaller outlets if you must do B&M. I don't know what that looks like in the health/fitness space, but in the snack space, liquor stores are great. Small chains and a lot of them will let you offer the employees spiffs.

Do you think it would be a smart idea to order samples from my copacker and shop it to local smaller stores to get orders before making a big purchase order from my copacker?

Any advice on protecting my company legally? Other than domain, trademarking the name, setting up an llc, anything else I need to do?

Any experience dealing with labs?

 

[G-Man]

Do you think it would be a smart idea to order samples from my copacker and shop it to local smaller stores to get orders before making a big purchase order from my copacker?

Any advice on protecting my company legally? Other than domain, trademarking the name, setting up an llc, anything else I need to do?

Any experience dealing with labs?

I respect that you're trying but I really don't know what I can do for you at this point. I just gave you 10s of thousands of dollars of hard learned lessons for free on a forum. I did this because others on this forum have done the same for me.

Listen: You are not ready for a co-packer

Scaling production happens when you already have sales. Your main focus should be getting your product into the hands of the actual end consumer right now. That race idea I just gave you can get you in goody bags for 5,000-10,000 people within the next month for the price of a few emails and a trip to fedex office.

Find everything you can read on the web about the early days of companies like Stacy's pita chips and Krave jerky.

Keep making it in the kitchen. Sell online. Schlep your product to every small shop that will give you 5 minutes of their time.

Food products are a grind. Even if you get a meeting with a buyer at a major retail outlet, it'll be 6 months of category review before they actually put you on a POG. Be patient, and get the product into the hands of customers. One at a time if you have to. The founders of Stacy's walked store aisles handing people bags of chips. You can do it.

 

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[zacharie101]

I respect that you're trying but I really don't know what I can do for you at this point. I just gave you 10s of thousands of dollars of hard learned lessons for free on a forum. I did this because others on this forum have done the same for me.

Listen: You are not ready for a co-packer

Scaling production happens when you already have sales. Your main focus should be getting your product into the hands of the actual end consumer right now. That race idea I just gave you can get you in goody bags for 5,000-10,000 people within the next month for the price of a few emails and a trip to fedex office.

Find everything you can read on the web about the early days of companies like Stacy's pita chips and Krave jerky.

Keep making it in the kitchen. Sell online. Schlep your product to every small shop that will give you 5 minutes of their time.

Food products are a grind. Even if you get a meeting with a buyer at a major retail outlet, it'll be 6 months of category review before they actually put you on a POG. Be patient, and get the product into the hands of customers. One at a time if you have to. The founders of Stacy's walked store aisles handing people bags of chips. You can do it.

Thanks for all your help. How did you market your food product in the beginning? What hardships did you face?

 

[Scot]

I respect that you're trying but I really don't know what I can do for you at this point. I just gave you 10s of thousands of dollars of hard learned lessons for free on a forum. I did this because others on this forum have done the same for me.

Listen: You are not ready for a co-packer

Scaling production happens when you already have sales. Your main focus should be getting your product into the hands of the actual end consumer right now. That race idea I just gave you can get you in goody bags for 5,000-10,000 people within the next month for the price of a few emails and a trip to fedex office.

Find everything you can read on the web about the early days of companies like Stacy's pita chips and Krave jerky.

Keep making it in the kitchen. Sell online. Schlep your product to every small shop that will give you 5 minutes of their time.

Food products are a grind. Even if you get a meeting with a buyer at a major retail outlet, it'll be 6 months of category review before they actually put you on a POG. Be patient, and get the product into the hands of customers. One at a time if you have to. The founders of Stacy's walked store aisles handing people bags of chips. You can do it.

@zacharie101 Id definitely take this advice. You're worrying about shit that doesn't matter. How many units have you sold this month? Unless the answer is 10,000 units, YOU DONT NEED A COPACKER.

Take this advice and run with it. Sell your product. Get a sale, learn how you got that sale. Then do it again.

 

[G-Man]

@zacharie101 I already gave you an actionable marketing idea, and some thoughts on branding. I can't give you a step by step guide, because I don't know the answers to everything. I'm not Don Draper. If you can give specific questions, maybe I can point you in some kind of direction (won't even guarantee that), but with the sheer vagueness, I can't really help.

 

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[zacharie101]

@zacharie101 Id definitely take this advice. You're worrying about shit that doesn't matter. How many units have you sold this month? Unless the answer is 10,000 units, YOU DONT NEED A COPACKER.

Take this advice and run with it. Sell your product. Get a sale, learn how you got that sale. Then do it again.

Thanks, the reason I kept mentioning the copacker is because I found one that was willing to produce low quantity 500 to 1000 and research the nutritional values. I thought that small stores would probably require custom packaging in order to carry in the stores and I wanted to make sure that every bar has the accurate nutritional value, which is something the copacker could handle.

 

[zacharie101]

@zacharie101 I already gave you an actionable marketing idea, and some thoughts on branding. I can't give you a step by step guide, because I don't know the answers to everything. I'm not Don Draper. If you can give specific questions, maybe I can point you in some kind of direction (won't even guarantee that), but with the sheer vagueness, I can't really help.

Thanks for all your answers.

 

[G-Man]

Thanks, the reason I kept mentioning the copacker is because I found one that was willing to produce low quantity 500 to 1000 and research the nutritional values. I thought that small stores would probably require custom packaging in order to carry in the stores and I wanted to make sure that every bar has the accurate nutritional value, which is something the copacker could handle.

Ok, glad to know you've done some research. Was beginning to think you were just asking about help with your hypothetical product that doesn't even exist.

If you've found a copacker that can do runs that small for you, that's great. Make sure you read the agreement very carefully. A lot of charges for for every aspect of pull pack and ship tend to get tacked onto those things.

As for nutrition: It's great if they'll help you, but do your own due diligence. If you're making a gourmet food product you have to "own" every aspect of that product. Know it inside and out. Know if individual ingredients have already been banned in other countries, or you get stuck with 5 figures of seasoning rotting in a warehouse somewhere because CA passes some new law (true story). Due diligence is the name of the game here.

You absolutely want branded packaging. That is probably the least complicated part of the project, but there again, due diligence. A lot of packers will make you buy your own poly bag tubing and have it sent to there facility. People that make that stuff make really long production runs. This often means committing to MOQs that are huge amounts of that shit. Networking is your friend here. Find out what types of packing the packer likes to use for his other customers. You might even be able to arrange to buy poly bag tubing from one of his other customers (I do this with some custom boxes that I don't want to buy in quantity). You pay more, but don't have to buy 5 years worth of material up front!

 

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[zacharie101]

Ok, glad to know you've done some research. Was beginning to think you were just asking about help with your hypothetical product that doesn't even exist.

If you've found a copacker that can do runs that small for you, that's great. Make sure you read the agreement very carefully. A lot of charges for for every aspect of pull pack and ship tend to get tacked onto those things.

As for nutrition: It's great if they'll help you, but do your own due diligence. If you're making a gourmet food product you have to "own" every aspect of that product. Know it inside and out. Know if individual ingredients have already been banned in other countries, or you get stuck with 5 figures of seasoning rotting in a warehouse somewhere because CA passes some new law (true story). Due diligence is the name of the game here.

You absolutely want branded packaging. That is probably the least complicated part of the project, but there again, due diligence. A lot of packers will make you buy your own poly bag tubing and have it sent to there facility. People that make that stuff make really long production runs. This often means committing to MOQs that are huge amounts of that shit. Networking is your friend here. Find out what types of packing the packer likes to use for his other customers. You might even be able to arrange to buy poly bag tubing from one of his other customers (I do this with some custom boxes that I don't want to buy in quantity). You pay more, but don't have to buy 5 years worth of material up front!

Thanks

 

[Scot]

Any updates on your protein bar?

 

[Pesterd]

I'm a partner in a Gluten Free Cookie Company. We started the same way you did.

Care to chat about this? Shoot me a PM. We'll talk.

 

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