How to Find the Right Co-Packer with Ashley Sutterfield
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Finding the Right Co-Packer for Your Consumer-Product Goods Business…
Let’s set the scene. You’ve created a food product, perfected the recipe, put it on the market, and now you’ve reached your limits on the time and capacity you have for production. So, what’s next? The answer is: find a co-packer to hand off your production. It might sound easy, but there’s some preparation you’ll need to do first.
In this episode, Ashley Sutterfield, creator of Co-Packing with Ashley, shares what co-packing is, how to know if you’re ready to transition production to a co-packer, and how to find the right one.
Ashley shares a great reminder that although our instincts are to speed up the co-packing process and get things moving immediately, we should actually slow down and do our research first.
Subscribe to the Food Means Business Podcast with Hudson Kitchen founder Djenaba Johnson-Jones to hear the personal stories and “secret ingredients” of abandoning your day job and starting a CPG food business.
In this episode, you’ll learn...
[00:37] How Ashley got started in the food industry, and what co-packing actually is
[03:33] How food business owners can research and plan for transitioning their production to a co-packer
[09:45] The different types of co-packers out there and how to find one in your product category
[16:45] The assessment process between business owners and co-packers in terms of finances, capacity, and volume
[21:04] Why testing is so important when working with a co-packer
[25:07] Things to keep in mind beyond production, such as shipping and storage
If you want to learn more about finding the right co-packer for your food business, be sure to tune into this episode:
Links mentioned in this episode…
Sign up for The Hudson Kitchen Workshop: Six Steps to Finding the Right Co-Packer with Ashley Sutterfield
About Ashley Sutterfield:
Ashley Sutterfield supports small business food entrepreneurs who are selling product at farmers market and retail stores. She offers her extensive insight to small business owners who have big dreams, and big questions about how to scale their production.
Co-Packing with Ashley is a radical approach to co-packing. One based on relationship and values. It’s an approach where Ashley encourages brands to take it one step at a time and take the calm path to finding the right co-packer.
As she’s worked with brands Ashley has realized that there's a simple process to find the right co-packer, but it isn't always easy. The pressure to scale your production can be intense so Ashley has broken it down into 6 simple steps. Simple, but comprehensive. Don't worry about what you don't know yet. Ashley will guide you every step of the way.
Connect with Ashley Sutterfield:
Visit the Co-Packing with Ashley Website
Connect with Ashley on LinkedIn
Stay Connected with Djenaba Johnson-Jones:
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[00:00:00] Djenaba You are listening to the Food Means Business Podcast, which features the personal stories and secret ingredients behind what it's like to abandon your day job to start a CPG food and beverage business. I'm Djenaba Johnson-Jones, former marketing executive turned entrepreneur and founder of food business incubator Hudson Kitchen. Join our community of fellow food business owners and subject matter experts to learn and laugh with us as we explore a startup world that's a little more culinary and a lot less corporate these days. Hi, Ashley. Welcome to the Food Means Business podcast. I'm so happy you're here.
[00:00:35] Ashley Thanks for having me, Djenaba.
[00:00:37] Djenaba So before we jump into what we're going to talk about today, which is co packing, we'd love to hear a little bit about you and how you kind of got started in this industry.
[00:00:46] Ashley Oh, yeah, really good question. I started as a food scientist and went into product development, really spent a good portion of my career there. And then things evolved, realizing personally that I was really drawn to working with small businesses. As my career had first taken off. I was working with small businesses and I wanted to go back to that. And so I've always had a heart for entrepreneurs and moving back into a space where I was working with food entrepreneurs, but really using that experience that I had in commercial product development and working with manufacturers. And you know, as an entrepreneur, you just find your place over time. And I realized food entrepreneurs were asking questions about co packing that no one was answering. And to me it was very clear answers that could be given. And so I started moving into this space of really talking about co packing more and being able to work with brands as they partners with co-packers. And on the flip side, working with co-packers as they started their co packing business. So I kind of got a view of both sides over the years and now I teach about co packing and how to work with a co-packer.
[00:02:07] Djenaba Well, it's definitely something that's needed for sure. I know because I hear horror stories just about trying to find the right co-packer and then finding something and then something going wrong. So, I would love for you to just start and tell us what is co packing?
[00:02:20] Ashley Great question. I think in its simplest form, when we talk about outsourcing as entrepreneurs and small business owners, we talk about outsourcing to other experts or simply to buy back our time in a lot of ways. And co packing is simply hiring somebody else to produce your product that focuses on manufacturing. And so you're simply outsourcing your production to another manufacturer. And with co packing, I think we tend to have a stigma that co-packers are often large conglomerates or large businesses that are really just kind of out to get the little guy. And in reality, the majority of co-packers that I've worked with over the years are small business owners themselves, their family owned, and often start with their own product manufacturing their own product, and then move into producing product for other people. And so I think we we tend to have this stigma that until you get into working with a co-packer, a lot of times we don't see that they're just another small business like us.
[00:03:33] Djenaba At Hudson Kitchen. So obviously where our members are manufacturing their own products, they typically hire employees to manage production while they're off doing other things in their businesses. However, the ultimate goal for most of them is to be eventually transition that production to a co-packer. So can you talk a little bit about when someone's like kind of interested and they think that they're going to make a move to being in a co-packer? Like how can they plan and research in order to make that move?
[00:04:00] Ashley Yeah, it's a really good question. And I think one that we we often don't talk about a lot, like how do you make that move? It's just the assumption and the pressure that you're going to make that right. And so I think first understanding like why you would work with a co-packer is that you are wanting to step away from production for some reason, whether that be production is taking up too much of your time or you simply don't enjoy it. There's a lot of different reasons that people make that choice, but if you're growing or you simply want to step out of production, you can start to focus your time somewhere else and to prepare for a co-packer. I think we view a lot of times co packing as I want to find a co-packer. I want to start conversations with a co-packer and then I want to move straight into production. And there's actually steps we can take along the way to make that a lot easier on ourselves. And so I think the first thing that when we want to jump straight to searching for a co-packer, what I recommend before doing that is to take just a bit of time. It's actually just a few days, usually of time to write your formulations and begin sourcing ingredients in larger quantities. So formulation simply being that we're converting a recipe from cups and tablespoons to pounds and percentages being the key. And when we do that, we make it possible for the co-packer to produce your product consistently. And so in a lot of ways you're removing a very tedious step with the co-packer by being prepared to talk to them in a very straightforward way that you have your formulation ready. And honestly, formulation and sourcing are the two things that really will give you a leg up against anybody else that's talking to the same co-packer. By looking and being prepared, you really set yourself apart. And so taking just a few days time to do that bit of work is really, really helpful.
[00:06:18] Djenaba It's so interesting because I wouldn't think that, I guess in my head when I first started thinking about co-packers, I thought, well, they're going to source the ingredients for me, and that's not necessarily the case.
[00:06:29] Ashley You know, what I see with the majority of co-packers is that they source kind of in a hybrid way. So some of them will source select ingredients, say it's a bakery, and they may source the flour and the sugar. But if you have a specific chocolate chip that goes into a cookie, that's for you to source. Or if you have a special type of ingredient that goes in, that is also for you to source. So, for instance, with my own product, I have a canned cold brew coffee line in the past, and for that we sourced a specific vanilla. We had our own coffee beans that we roasted and so we were sourcing the bulk of the ingredients and they sourced just the very basic ingredients that they used on site for other companies as well. And that's honestly what I see with the majority of co-packers is kind of a hybrid model for sourcing like that. And so if you're looking at sourcing ingredients, you may not need to source the most basic of things like flour and sugar. But thinking ahead about where do I want to buy the vanilla that goes into my product or the butter that goes in those different things. It's really important to just start thinking and researching where you could source those effectively.
[00:07:53] Djenaba And what about formulation? So I believe you mean taking your recipe and essentially scaling it up, is that correct?
[00:08:01] Ashley Yeah.
[00:08:02] Djenaba Does it make more sense to work with a recipe developer to help you to do that? Or how how does that work?
[00:08:08] Ashley No, it's not what I recommend at all. It's something you can do in your own kitchen. All you need is a scale and bowls to weigh. And so it's really about taking a day in the kitchen that you wouldn't normally be doing production, just taking about half a day to make your same recipe. But as you do it, you weigh every single ingredient for the batch that you typically make. And in doing that, you get a list of weights for each ingredient in that batch. And then afterwards you just do some division and make it into percentages. And those percentages then are what allows a co-packer to then see, okay, you make a 5 lbs batch now and we want to scale to a 100 lbs batch. So they're just going to take those percentages then and adjust the weight to fit what that larger scale production would be. And there's always going to be slight tweaks here and there, but it really is just kind of a basis of how to write your formula. And I honestly don't think it's necessary to hire anybody to do that. It's something you can do in a half days time. Got it.
[00:09:22] Djenaba So someone has done their research and they have the formulation and they've researched the where they can find the ingredients for their product or what is the next step that they might take.
[00:09:33] Ashley Yeah. Their next step would be to search for a co-packer at that point. I know that we talked about that being the first step we want to go to. And now you're actually there that that would be this would be the time I recommend that.
[00:09:45] Djenaba Awesome. So and those are different types of co-packers, right? So I've noticed, like in this Northeast region, there seems to be where we are. There's a lot of this was where in New Jersey when I was kind of looking around at co-packers. There's a lot of they can or they bottle, but if someone needed to make say, an egg roll type product, this might not be the state to look in or the place to look in. So I'm just wondering, like, how does someone go about kind of like finding the right co-packer or set of co-packers to kind of continue their search?
[00:10:14] Ashley Yeah, that's such a good question. I think one thing to realize about co-packers is that they are highly niche, so they focus on a particular type of product or a very specific product in general. And so you referred to canned products. That's something that would be a niche that a co-packer focuses on. And so we really when I think about co packing, it's about understanding that you're in a category for the type of product that you make and not all co-packers make that product. So you want to get clear on what category you fall into. I recommend for your very first search to do a nationwide search, and I know that we want to a lot of times have a co-packer that's close to us, and I think that's excellent. I think there's nothing wrong with that. But instead of having to go back and do a search in the future, if you didn't find a co-packer in your area and being frustrated by going through the process all over again, I recommend just starting with a nationwide search. Kind of cast your net broad, so to say, and see what's out there? And then you can start to get an idea of, okay, what co-packers are in my area? And what I recommend for brands looking for a co-packer is that you really consider values as a part of your search. And I know that a lot of times we want to simply find a co-packer to produce our products, right? But I really believe after doing this hundreds of times that it's about finding the right co-packer, someone that we can communicate with on a very transparent level and have conversations with because is the largest part of working with that co-packer. And so I think finding somebody whose values align is really important. And so to go about that search, to do that, casting your net broad, I think one very simple solution that I recommend for finding a co-packer is to use PartnerSlate. It's a website they have a very reasonable fee of I believe it's $199 to list your product or your brand on the website, and then co-packers will reach out to you from the information they send out to the co-packers. And so it's a really good platform for more of a hands off approach to finding a co-packer. It does require you to be prepared to fill out the paperwork, right? And that means having your formulas ready and things like that. But it is a very nice way to go about it. And then, of course, there's other ways to use co-packer lists and do some category searches, but that's a little more time consuming and we definitely have to put in some effort there.
[00:13:18] Djenaba So I'm wondering about putting in that effort. So just say I'll say I'm using PartnerSlate, but I also want to cast a net in a different place. And I pick up the phone and I call the co-packer and I say, Hey, I have a cookie that I'd like to make. I'm just wondering, like, how does a conversation need to go? Like, sometimes I found, like it's hard to get people on the phone or to get them to respond to an email. Is there some tactic that can be used to help that make that process easier?
[00:13:43] Ashley It's a really good question. It sounds like you've done this before.
[00:13:46] Djenaba Just a little bit. I helped somebody out once and I was like, This is a lot.
[00:13:50] Ashley Yeah, it does require a lot of persistence, unfortunately, and in a way that seems a bit excessive sometimes. And what I've found over the years is that if I reach out to ten co-packers, I kind of have a method of reach out to each co-packer on my list, say that's ten at least three times. And so I'm doing that. When I say three times, I'm doing that through phone, email and on their online form. You may not find all three of those ways to contact each co-packer, but make a list of how to contact them and then just be persistent. And I would say be persistent and kind. Because I know that it can get very trying whenever we're in a place of, gosh, I'm just trying to get a hold of you to give you business and it feels like you're not interested in all. Copacking is an interesting business and if you work in a kitchen yourself to produce your product today, you'll understand that when you're in the kitchen, your focus is in the kitchen and there's not much else you can be focused on. And so I think having a bit of grace with co-packers that they're really in their business on the production for a lot of times. And so it's not out of sight that they're not responding. It may just be that they're occupied in their production and if they don't respond after the three times, I just kind of put them on the back burner. I don't worry about it too much because that could mean that they're at capacity or it's just not the right time to work with that particular co-packer. So I like to kind of move them to the side on my list and continue talking to those who really are responding. And I think one of the most important things when you do get a hold of a co-packer is keep the information about yourself slightly brief. It's really about getting to know your co-packer and letting them ask questions of you as well. So I think when I first contact a co-packer, my biggest objective is simply to get more time with them. So I typically ask, could we just set up a scheduled call? And in that conversation, what I'm really asking is I think the key question that tends to have all the answers pour forth is simply tell me about your business, tell me about your co packing. And from that you'll learn about what their capabilities are, how long they've been in business, what their packaging capabilities are. A lot of those questions that I would recommend asking you often get just naturally in conversation from that one question.
[00:16:40] Djenaba And so that then you're just assessing whether there's a fit or not.
[00:16:43] Ashley Yeah, a fit and an interest honestly on both parts.
[00:16:47] Djenaba What else do you need to do to prepare for? Like how do you use that? You put your best foot forward with the co-packer. You mentioned the formulation in-sourcing. So what? So I've done that job right? Is there something else that they need to see as we as we kind of progressing in the conversation that they need to understand where I am financially? Like how am I going to fund working with them? And then on the flip side, with the co-packer, like do they have the capacity to take me on? What is their business structure look like and are they in a good position in general in their business to be able to take me? I got to want to I would start to think about, am I going to be at this co-packer? I'm giving them this business, but then all of a sudden they go out of business. So like, how are we kind of are assessing each other? Right, Right. Finances is kind of important, I would think.
[00:17:29] Ashley Yeah, absolutely. And I think one of the best ways you can be prepared is to have what I'll call projections ready. So knowing how much product are you producing on a regular basis and what frequency of production are you looking for? And so understanding that, you know, if you're producing 5000 units every three months, then it's important to know that going into conversation so that you can assess against what their minimum volumes are after the conversation and trying to get an idea of what does their capacity look like will really help you in the assessment of does this feel like a long standing relationship or does it feel like they really don't have that much space for me or maybe they have too much space in production? And I'm not confident that they're going to be in business for years. And so I think just getting an idea of how many clients do they have, you don't need to know who their clients are. That's confidential. But just understanding, you know, how many clients do you have, how many units in a minimum batch or what is your minimum batch size? How often do you expect me to produce product? Those types of questions can help you give a sense of their trustworthiness and also how long they'll be around their longevity of business as well.
[00:18:59] Djenaba Those are all very helpful. So I'm wondering about NDAs and confidentiality, because I feel like as the food maker there, like your recipe like there. So it's like you want to hold it close to the vest. Right. And obviously everyone else does. Like, you don't want anybody to know that. So like at what point during that these conversations is an NDA signed?
[00:19:20] Ashley Yeah, I'd say once you decide that you want to move forward with testing, with the co-packer. And so once you've talked to a few co-packers and have really understood like. Which one is right for you. Then I would at that point you want to sign an NDA with each other. A lot of times the co-packer will have their own NDA that you simply need to sign. They're usually very straightforward. I know that we can get a bit nit picky in what NDAs actually read as, but oftentimes they're very standard and I'm confident in signing one that a co-packer provides. I think also it's important. This is the reason the formulation is also important to do ahead of time, because as you move forward in conversation through testing and then eventually signing a contract, if it's available, you want to be sure that your formulation is protected. And so by having done the formula before you go to the co-packer, instead of you handing off a recipe to them and asking them to scale it for you. That oftentimes is where a bit of gray area can come in and convolute who owns the formula. That is one of the reasons I also suggest having a formulation ready before the conversations, because then it's very clear that what you provided to them in testing is you owned it, you provided it. And so it makes that contract piece later on easier to declare that you own the formula.
[00:21:03] Djenaba Got it. That's really, really helpful. So you mentioned in your explanation about testing, and so is it customary for the co-packer to do a test run prior to kind of signing contracts with everyone?
[00:21:16] Ashley Yeah, absolutely. Testing is really where a co-packer gets an idea of how your product works in their process. And so every co-packer is different. All their line setups are different, they have different capabilities. And so having a test really gives them an idea of how does this work in our process? And it gives you an idea of what does the final product look like in their process. And so testing is something that is 100% guaranteed. If a co-packer doesn't want to do testing, then that's very much a red flag to me. So testing is something you should always expect. It also sets the stage for pricing. And so I know as brands, a lot of times we want pricing information before we dedicate money to testing and to moving forward with a co-packer. But I would say that it's not a reality to expect that pricing comes after you see how a test runs. They have an understanding of what it requires in their process. Maybe it means that they now have to hand pack something, whereas normally they would run it on a machine or they need to use a different machine than they typically would. And that requires a bit of investment. So they'll get an idea of what the pricing per unit will look like through that test. And so it's really key to have the test so that you can get pricing as a follow up.
[00:22:51] Djenaba Got it. Got it. Does it make sense to test with a couple of different co-packers?
[00:22:58] Ashley I don't suggest it. My suggestion is to really get clear. Do a lot of vetting on the front end in who you want to work with. And so not just moving forward again with any co-packer. We're looking for the right co-packer. And so making sure that we're having conversations that are really, really able to help us gauge if this is the right type of person we want to work with. And that may mean you go take a tour before you commit to a test as well. That's oftentimes something that I see brands desire. And co-packers a lot of times will invite brands too. And so it really helps to do that vetting early on so that you're just testing with one co-packer because there's also pricing or there's also cost involved with testing. And so we as with any decision we make financially, right, we don't want to be duplicating or replicating that cost where it's not necessary.
[00:24:02] Djenaba That I was just from my standpoint, I was like, if I test with three co-packers and two of them fall out, then I have this one in my mind. I'm trying to save time. But honestly, what I've heard you say throughout this whole conversation is slow down, take your time, ask the right questions so that you can make a good decision.
[00:24:20] Ashley Yeah, it's counterintuitive, right? We we want to make this process go quickly. We're excited. It makes us anxious in a lot of ways. And if I can say one thing about this process, it is to be intentional and slow down. And I know that's not the desire. It's not what anybody wants to do, but it honestly is the best decision that you can make so that you're not having to do this whole process again in six months. If it didn't work out with the co-packer, we're really looking for a longer term solution, and slowing down can help us make that decision rather than having to spin our wheels doing the same thing over and over again.
[00:25:07] Djenaba So how can we think beyond production? So I'm thinking I've got to get them my packaging. Once the product is packaged and ready to go, it's got to go somewhere else, you know? So give me an idea of like, what's to be thinking about next.
[00:25:22] Ashley I'd say once you decide that the test went well, your product looks great, you've received pricing that you're happy with, then you're going to look at your first production. And so as you prepare for that, being prepared ahead of time with how will you ship your product? So that can mean a few things. It could mean that you're simply now if you're close enough, you could go pick up your product after a production. If it's within a distance that you need shipping, Are you shipping with UPS or FedEx or that type of shipping company, or are you shipping pallets now and you'd prefer to go with the logistics company and so you can get those quotes ahead of time. There's no reason to wait. So you'll have an idea of what to expect with those costs. And so shipping is something to think about storage. And there's another thing to think about. I think for a lot of brands, we're often storing product in our laundry room or, you know, we have a garage.
[00:26:23] Djenaba I've heard of people. I met someone that there had hot sauce in their living room and their wife was like, Can you please please stop that?
[00:26:31] Ashley Yes, it's so common though. And so I think being ahead of that, that like not a frantic thing after production happens and you're like, oh, I have no room in my living room for this product, like knowing if you're going to a storage unit or if there's a local warehouse that you're going to start working with. Or are you at the point of a 3PL that you're interested in working with? So just having an idea of where you're going to store product, probably not in your house at that point. It could possibly be, but an outside storage would be good to think about. And then I think one thing that brands typically want to do all at once is to also redesign their packaging. And I totally get it because we're in a place of kind of revamping, you know, we're going into the next phase of business and redesigning packaging is often times at the top of mind. It's a desire we've had for a while. But what I would recommend is getting into production, doing a few production runs, ironing out any kinks with production and co packing, whether that be how you submit POs and things like that. But ironing out those kinks and then focusing on the packaging redesign. And because once you decide on a co-packer, you'll understand and they can also help you understand what their packaging line is. So you can design packaging in the most effective way to fit their production line as well.
[00:28:13] Djenaba I never thought about that. So when looking for the co-packer, you're thinking, So you may be making a change on your packaging, but it may be because you really want a co-packer that can make your product in a consistent way in the quantities that work for everyone. But that may mean that the packaging may need to change in order to make that work.
[00:28:31] Ashley Yeah, it could be that. It could also be that you're just in a rebranding stage of business. I think that's what I often find, is that, you know, you start with hand labeling product on a bag and now you're wanting to move to more of a printed packaging. And that's excellent. We just want to be sure that that printed packaging now fits the production line that you're going down. So I like to think of it as more of a packaging decision as based on the co-packer that you partner with in a lot of ways.
[00:29:03] Djenaba Okay. Yeah. So I will tell everybody what's next. What's next is actually we'll be doing a workshop with Hudson Kitchen. Yeah. So you can go to thehudsonkitchen.com/events to register and she's going to take a deep dive into co packing. So I'm so excited about that. Ashley, thank you so much for being here.
[00:29:23] Ashley Yeah. Thank you, Djenaba.
[00:29:25] Djenaba Please let everybody know where they can find out about you and Co-Packing with Ashley.
[00:29:29] Ashley Yeah. Thank you for setting the stage. It is simply our web website is copackingwithashley.com and that is where I teach a digital course about how to work with a co-packer and the steps you need to take in a deep dive kind of way.
[00:29:45] Djenaba Thank you very much. The Food Means Business podcast was produced by Hudson Kitchen. It is recorded at the studio at Carney Point and mixed and edited by Wild Home Podcasting. Our theme song is by Damien de Sandys, and I'm your host, Djenaba Johnson-Jones. Follow Hudson Kitchen on Instagram at thehudsonkitchen and to get Food Business Bites right in your inbox, sign up for our newsletter at thehudsonkitchen.com/newsletter. Listen, follow and leave a review on Apple Podcasts, Spotify or wherever you get podcasts. Until next time.