The Advantages of Co-Packing

Co-packing has evolved to address the coffee and tea industries’ need for a one-stop shop. Collaborating with a co-packer also helps companies improve efficiencies and alleviate risk.

By Anne-Marie Hardie

With the continually evolving packaging platforms, it can be challenging to keep up. Today’s consumers are looking to experience their favourite brew in a variety of formats including pour over, single serve and even cold brew. Each of these offerings involves specific machinery and processes that can be cost prohibitive and time consuming. Creating partnerships with co-packers provides roasters and blenders with the opportunity to enter into these new markets without the up-front equipment investment.

At a bare minimum, the co-packer should have the required food safety certifications and be able to offer a variety of packaging options. However, choosing a co-packer with industry expertise provides companies with a competitive edge. “When interviewing potential co-packers, you should be asking for both their customer list and to review their food safety certifications,” said Dan Ragan, national sales manager, Pod Pack International, Baton Rouge, Louisiana. These two items will help you gauge whether the co-packer is able to meet your needs.

Asking for the co-packer’s portfolio and seeing the plant, shared Angelo Campanella, vice president, US channel development, Club Coffee, Arlington Heights, Illinois, is a great way to gauge whether the co-packer can help you achieve your goals. “One of the mistakes I’ve seen is companies entering into a co-packing situation with a manufacturer that is not fully committed to it,” said Campanella. “You want to look for a co-packer that is in it for the long term.”

Ideally, companies should be looking to create partnerships with co-packers that have room for expansion. This includes being able to offer a variety of packaging options, certifications, and to be able to fulfil your co-packing requests quickly and efficiently. Initially, the cost to work with these co-packers may seem higher, stated Campanella, but their capabilities will warrant this higher cost.

“You should be looking at what their capacity is today and their ability to scale up to meet your customer’s demands,” said Ragan. In fact, seeing a few equipment lines sit idle could be a good thing. If every line is running at full capacity, said Ragan, it may be challenging for the co-packer to respond to additional volume requests. In fact, when Pod Pack achieves 50 percent capacity, they start to look at investing in additional equipment to ensure that they could respond to potential volume increases.

The world of co-packing has evolved to address the coffee industry’s need for a one-stop shop. Today, co-packers are often able to fulfill the entire process including procuring the green beans, roasting in accordance to a roast recipe, and packaging. “The advantage of this is that the co-packer establishes the cost for the entire process up front, taking on the risk of fluctuating auction prices,” said Ragan. Overall, partnering with a co-packer helps companies alleviate risk both through minimizing capital investments and by outsourcing food handling requests to companies that fully understand the certification requirements.

Decreasing Risk

One of the biggest risks that co-packers take on is ensuring that the facility and equipment achieves food safety standards. “One of the advantages of partnering with a co-packer, is that they manage the food handling part of the process, including the necessary food safety certifications and completing the lot traceability,” said Donna Cook, president, BAM Packaging, Los Alamitos, California. With regular audits and stringent regulations to adhere to, ensuring that all the certifications requirements are met can be extremely stressful. By choosing to collaborate with a co-packer, companies can choose to drop-ship their ingredients and leave the packaging and processing to the co-packer.

“Food safety certifications are there to protect your company,” said Ragan. “Failing to check for certifications and the process that the company follows to ensure that the product is safe, places your product, your consumer and your brand at risk.”

Adhering to and exceeding food safety standards requires continual training and education, particularly when looking at newer formats, like cold brew. “There is a lot about cold brew that people often skip, including the importance of filtration and water quality,” said Abe Saimeh, Dr Brood, Brood, Toronto, Ontario. “The process that you do at home or for a two-day café use, should not be used for mass production.”

The entrance of any oxygen, shared Saimeh, puts the product at risk for bacteria growth. This is one of the reasons why Brood opts for a pressurized brewing method, and a vacuum-sealed environment to ensure that oxygen is unable to get into their ready-to-drink products.

When it comes to certifications, co-packers offer companies the opportunity to enter into new market spaces, including protecting the product from allergens and safe-guarding kosher and organic product lines. Maintaining these certifications typically requires dedicated equipment, including grinders and roasters, to ensure that the standards are adhered to. “Within our facility we have highly controlled process to ensure that allergens do not enter areas, including segregated areas for dairy products,” said Campanella. With coffee as its core product line, Club Coffee can support its customers with a variety of certifications including Rainforest Alliance, Fair Trade and organic.

Having industry knowledge in tea, said Cook, helps us to inform our clients with both the trends and changes within the industry. This includes knowing the in-demand certifications and the packaging that the consumers are looking for. Recently, BAM Packaging added compostable, non-GMO tea bags to its manufacturing line, responding to the consumer’s interest in sustainable packaging options.

Reducing Overheads

Perhaps one of the biggest advantages for roasters in partnering with a co-packer is that it decreases the capital investment with purchasing packaging and roasting equipment. “The capital to support the consumer demand for new product offerings is extensive,” said Campanella. “Technology is changing every day, and it can be difficult for a company to keep up with both the latest machinery, and the expertise needed to run and maintain this equipment.”

Collaborating with a co-packer, allows companies to focus on the marketing and product development piece, while leaving the processing and packaging to the co-packer.

Single serve is one area that continues to evolve, making it extremely challenging for an individual company to keep up with the latest machinery. Keurig-style pods used to dominate the market, however, there has been a recent surge in the Nespresso single serve product lines. Responding to this shift, Club Coffee has extended its product line to include Nespresso-style capsules.

By partnering with a co-packer with the latest machinery, companies have the option of offering their clients a variety of solutions including K-Cups, capsules and pods. And if the trend begins to die, said Ragan, then a company does not have to worry about a piece of machinery sitting idle. “Essentially, roasters can reduce their risk by not owning equipment,” said Ragan. “These are specialized pieces of equipment, co-packers not only have the personnel on staff that knows how to run the equipment, they also have back up machinery in the case of equipment failure.”

Cold brew is one of the newest areas of growth in packaging, with both do it yourself options and ready to brew. “Cold brew is here to stay,” said Ragan. “It is a natural replacement for energy drinks and soft drinks.” Pod Pack recently expanded its line to include a scalable cold brew pod, one pod makes one cup and five pods for a pitcher, providing roasters with an option to enter the cold brew market.

Consumer demand is driving not only roasters, but hotels and restaurants, to enter into this market. Brood, which strives to be the experts in cold brew tea, coffee, and herbals, responds to these businesses by offering them cold brew solutions which they can dispense at their own facility.

There is a lot about cold brew that the industry is still learning, said Saimeh. “Our goal is to support businesses by providing education and support. Initially we ask two questions: what is their dispensary method and what type of shelf life are they looking for.” These preliminary questions help Brood determine what type of cold brew product would best support their need. “It’s very easy to add cold brew to your menu with zero investment,” said Saimeh. “We want the industry to grow in a healthy and sustainable way.”

Co-packers are defining themselves as industry leaders providing the support and guidance that helps their clients remain competitive and enter innovative market spaces. However, not any co-packer will do. To take a business to the next level, companies should ensure that the co-packer has the industry expertise, certifications and packaging solutions that will not only fulfill their requirements for today, but also  the ability to support future growth.

Anne-Marie Hardie is a freelancer writer, professor and speaker based in Barrie, Ontario. She may be reached at: annemariehardie1@gmail.com.

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