We have noticed an increasing trend toward outsourcing manufacturing of consumer products. Major consumer products companies are increasingly viewing themselves as brand managers. They want oversight and quality control on their products but are using private label manufacturers to produce their products. Grocery stores have been stocked for years with private label or house brand products, some of which have as strong a resonance with consumers as major national brands. However, this is spreading beyond food products into other consumer products.

It used to be that cosmetics and perfume companies used co-packers because of the seasonal variation in volume combined with a huge volume of different SKUs.  Co-packers were largely oriented to  this industry. Today the line between co-packers and co-manufacturers is blurring and so is the functionality to brand owners.

Today we see private label manufacturers acting as co-manufacturers for major consumer products brands. These co-manufacturers are making and packaging products according to the specifications of the  brand owner. At the same time the co-manufactuere may be making a house brand and private label brands.  Increasingly, these manufacturers are buying equipment that is specific to the brand owner’s product.

When we first noticed this trend, we found we were being introduced by the brand owner to the co-manufacturer, since the brand owner was specifying both the process and the equipment to be used.

Today we are more likely to be dealing with the co-manufacturer who is choosing the equipment that meets the the customer’s process specifications.  Sometimes we are in contact with the brand owner but often we no longer have direct responsibility to the brand owner and they are unaware of the equipment being used to package their products.

We see a trend to more sophisticated decision-making and performance by co-manufacturers. Those co-manufacturers have depth and expertise in the products they make. Most recently we have seen this in soap and paper products, and historically in food products.

Issues we come across include co-manufacturers not being not the brand owners. This means they are less clear about how packaging reflects the brand owner’s values. At the same time, brand owners are disconnected from the manufacturing process and the packaging process and are unable to align their brand values with the production opportunities.

Co-packers who handle only the packaging of the product, not its manufacture have grown more slowly in recent years and are still carefully about aligning their packaging with the brand owner’s product requirements.

If you are thinking about outsourcing your production or packaging, have clear discussions about how the brand values will be impacted, about how changes in SKUs or packaging will be handled. If you are the co-manufacturer, have clarity around the manufacturing and packing constraints that the brand manager thinks are important and what is cost-effective for both of you. Flexible equipment makes it possible to reuse the equipment for future applications as well as for intended changes on existing products.

Let us know how we can support both parties in achieving effective product wrapping. Here are case studies of projects we have done with a link to a video.

For more information contact us at sales@pacaakgemachinery.com