There are several reasons a company might decide to outsource its beverage manufacturing. Some beverage entrepreneurs choose to outsource production so that their team can focus primarily on marketing and sales. An established beverage company may outgrow their facility before they are ready to invest in adding new filling lines. Another beverage company may decide to focus on one type of product and outsource the production of secondary SKUs. No matter the reason, the goal of outsourcing beverage production is to find a partner who can meet your beverage’s specifications while aligning with your company’s brand, quality, and goals.
We’ve worked with hundreds of beverage brands to help them find and successfully partner with a contract beverage manufacturer. Here are some of the steps to take and items to remember if you’re considering outsourcing your beverage manufacturing.
Start with you!
It’s essential to start with a clear understanding of what your needs are. You should know what type of product you are making and the equipment that will be required to make it. Have your commercial formula prepared and a plan for sourcing your ingredients. You also need a well-planned projection of your timeline and production needs. You should also make sure you and your team have at least a baseline understanding of industry terms and acronyms.
Create your criteria checklist
Your exact list of requirements and specifications will depend on your product and brand, but here are a few areas to consider and some questions to get you started.
Technology & Capabilities
What kind of beverages can the facility bottle?
What type of packaging can they accommodate (PET, aluminum cans, tetra-pack, etc) and what size packaging (330mL, 355mL, 500mL, 1L)?
What is their policy regarding unique packaging mold development?
What preservation methods do they provide? Do they have aseptic filling?
Policies & Terms
What is the minimum order quantity?
What are their payment terms?
What is the length of time required to contract?
Do they provide product liability insurance?
How tightly do they schedule projects?
Are they able to accommodate quick-turn requests?
What is their capacity for taking on shorter runs?
What are their areas of certification (gluten-free, kosher, etc.)?
What is the process for ensuring compliance?
How quickly do they reply to emails or requests for information? Do they guarantee response time?
What is their process for communicating problems or issues proactively?
Where is the manufacturer based?
What impact will that have on shipping and logistics costs?
Can you afford to travel to their location if needed?
Use your connections to learn about other companies’ experiences with different co-packers. Asking around will give you information about a manufacturer’s reputation in the industry. Also, look for clues about the company on industry websites and within trade associations. Have they won external awards for quality? How long have employees been with the company?
When you’ve narrowed down to your search, do a site visit if at all possible to see the manufacturing environment and meet some of the people you would be working with in-person.
Break down costs & compare
The pricing from manufacturers has many components and can be broken out in several ways. Make sure you understand all of the components that go into your product costs including materials, yield loss, storage, and waste disposal, so you can compare apples to apples when looking across various potential manufacturing partners.
Prepare to partner
Think of your contract manufacturer as a strategic partner for your business. Imagine what a successful long-term, win-win, relationship looks like and work towards that. Trust your instincts, communicate openly, and continuously look for ways to enhance the partnership.
These are just a few of the considerations in the decision to outsource your beverage manufacturing. The good news is that you don’t have to navigate the process alone. The team at MyDrink and BevSource is here to help guide you with the experience, insights, and industry connections to help make your beverage outsourcing journey a success.
Editor’s Note: This post was originally published by Adomas Pranevicius, founder of MyDrink Beverages, in 2012 and has been updated to provide more in-depth and accurate information.