co-packer Co-Packers?

[FlaccidJohn]

Hello!
 
I have read several articles on The Hot Pepper regarding the making and selling of pepper sauces. From cooking and sterilizing, to insurance and zoning, it's not feasible for anyone but a dedicated sauce maker. But what about the use of a co-packer? For those of you who don't know what a co-packer is, let me save you from a few seconds on Google.
 

Product being hot-bottled at a co-packer. Source: www.summitbottling.com
 
A co-packer is simply a company that makes your product for you. They use your recipe, exactly as your write it. They analyse your recipe (after signing a non-disclosure agreement first) and determine the needs to create it. Then, they use their commercial kitchen and industrial equipment to create and bottle your product. Many offer a full lab analyses to ensure that your product is safe and meets FDA regulations. On top of that, some offer labeling and other additional services. Then, the product is shipped back to you for marketing and selling. The benefit of using a co-packer is that they can produce large quantities of your recipe quickly, keeping you from having to worry about the expense and hassle of making it yourself. Since they are the ones making it, the product falls under their insurance and alleviates you from any liability should there be an accident.
 

A full-size co-packer producing chocolate for a client. Source: www.bffdirect.com
 
The downsides to using a co-packer are as follows:
 
1. You don't make your sauce. You miss out on the fun of birthing your creation yourself. However, with a co-packer producing the selling-safe products to help fund your hobby, you can make your own personal batches at home.
 
2. Co-packers can be expensive. I can't quote any prices, because they vary by recipe. But you have to pay these guys for overhead, labor, ingredients, bottles, and insurance. On top of that, you need to have your product shipped. Not very good for small businesses or individuals.
 
3. Co-packers require your order to be big. Because these companies buy everything in bulk and dedicate large machines to one product at a time, co-packers often require a commercial-sized order. A common minimum is often One Skid. That's over 1,000 fluid ounces, and a lot of product. Again, small businesses and individuals can't really utilize this.
 

The shipping floor of a full-size co-packer. Note the size of the orders. Source: www.packworld.com
 
But there are co-packers out there that do offer small-batch orders. These co-packers are usually dedicated to production for small businesses. Rather than using large machinery, they do more by hand and run more like a commercial kitchen than a factory. They also offer reasonable pricing that individuals can afford.
 

A kitchen more akin to that of a small co-packer. Source: www.commercialkitchenguy.com
 
So now that we're all on the same page, I would like to know:
 
-Do/have any of you use(d) a co-packer to make your sauce?
-What was your experience like?
-Do you recommend it for the home sauce-meister?
 
I'm looking forward to reading about your opinions and experiences.
 
 
Stay Spicy,
 
-Styrkr

 

[AlabamaJack]

the only downside I found to using a co-packer was the amount to be made with each batch and the resulting number of bottles of sauce that has to be stored in an "approved" area...and 1000 fluid ounces is only 200 bottles....so that is not a huge amount IMO...
 
now mind you, I have not used a co-packer but have talked to a couple here in the DFW area..
 
people in the business will be more adept at a response...just wanted to tell you the down side I found...

 

[salsalady]

Lots of hot sauce companies use co-packers.  In fact I would venture to say the majority of sauces on the market are co-packed. 
 
A few that I can think of off the top of my head that use co-packers-
Defcon
Lucky Dog Hot Sauce
Heartbreaking Dawns
Zane & Zacks
Gunthers Gourmet
Sauce Goddess
High River Sauces
Bumblefoots
Puckerbutt
Davez Foodz
most BBQ sauces
Gemini Crow
Sam&Oliver
 
 
 
A few that I know make their own-
Texas Creek Products
Red Hawk Peppers
 
 
 
 
Not sure what you mean by "recommending it for the home sauce-meister".  If you have a kickbutt sauce that you want to get on the market, there really are only 2 choices.  Get yourself legal and find a commercial facility (or build one) or use a co-packer.  There should be several in the Miami area, Endorphin Farms is up in St Augustine.   
 
First and foremost, though, is get the sauce absolutely dialed in and make sure people really do love it and are not just being nice.  Get opinions from strangers (especially people here on THP who are familiar with chiles and usually eat a lot of different sauces) not just friends and family (who tend to be nice and say they like it when they don't...)
 
Co-packers are expensive.  I was quoted $600 just to review my (already PA approved) recipe!  What the heck?    Every recipe is different and you'd have to talk to the co-packer about your specific recipe for them to generate a production run quote.  
 
Good Luck! 

 

[FlaccidJohn]

the only downside I found to using a co-packer was the amount to be made with each batch and the resulting number of bottles of sauce that has to be stored in an "approved" area...and 1000 fluid ounces is only 200 bottles....so that is not a huge amount IMO...
 
now mind you, I have not used a co-packer but have talked to a couple here in the DFW area..
 
people in the business will be more adept at a response...just wanted to tell you the down side I found...

 
Yes, the quantity is one of the potential downsides I mentioned, and can certainly be a deciding factor. Care to share some of the ones you talked to and their requirements? It would be nice to compile a database for those interested. Thanks for sharing your experience!
 
 

Lots of hot sauce companies use co-packers.  In fact I would venture to say the majority of sauces on the market are co-packed. 
 
A few that I can think of off the top of my head that use co-packers-
Defcon
Lucky Dog Hot Sauce
Heartbreaking Dawns
Zane & Zacks
Gunthers Gourmet
Sauce Goddess
High River Sauces
Bumblefoots
Puckerbutt
Davez Foodz
most BBQ sauces
 
 
 
A few that I know make their own-
Texas Creek Products
Red Hawk Peppers

Indeed! It is far more economical for a full-fledged hot sauce company to hire a co-packer. But what about the small-guys? The hobbyists and enthusiasts? That's more of what I was hoping to hear about. Thanks for sharing!

 
Stay Spicy!

 

[salsalady]

I added some to the post....
 
 
and PS- to THP

 

[FlaccidJohn]

I added some to the post....
 
 
and PS- to THP

 
Thanks!

 

[Gemini Crow Sauce Company]

I prefer co-packing my sauces, and i quote Scott 'Lucky Dog' (i think he said something like this..)... "I like creating sauces and I like selling the sauces, but i don't like making the sauces'.
 
Scott, you said something to this effect, right? LOL

 

[salsalady]

yep, I think he did.
 
 
 
 
People also have to consider their skill set.  Yes, anyone can learn to process their own sauces, but it's a looong road with a lot of mistakes if the person doesn't have at least basic food service knowledge of health and safety issues, some business experience, and a slight clue about large scale cooking.  By large scale, I mean at least restaurant quantities.  Things like...large pots of sauce with sugar in it over a gas flame will scorch in a heartbeat. 
 
 
Also, how many bottles do you think you'll be selling and how fast will they be selling?  How long will it take to actually pack all those bottles by hand in a commercial facility?  Do you have TIME to get the processing done for your Hobby Sauce Business while maintaining a 9-5?  Do you really WANT to bottle, shrink wrap, label.....800 bottles at a time?
 
Maybe YES, maybe NO....just things to consider~~~

 

[FlaccidJohn]

the only downside I found to using a co-packer was the amount to be made with each batch and the resulting number of bottles of sauce that has to be stored in an "approved" area...and 1000 fluid ounces is only 200 bottles....so that is not a huge amount IMO...
 
now mind you, I have not used a co-packer but have talked to a couple here in the DFW area..
 
people in the business will be more adept at a response...just wanted to tell you the down side I found...

 
Sorry for a perforated reply, but what is considered an "approved storage area"?
 
 

People also have to consider their skill set.  Yes, anyone can learn to process their own sauces, but it's a looong road with a lot of mistakes if the person doesn't have at least basic food service knowledge of health and safety issues, some business experience, and a slight clue about large scale cooking.  By large scale, I mean at least restaurant quantities.  Things like...large pots of sauce with sugar in it over a gas flame will scorch in a heartbeat. 
 
 
Also, how many bottles do you think you'll be selling and how fast will they be selling?  How long will it take to actually pack all those bottles by hand in a commercial facility?  Do you have TIME to get the processing done for your Hobby Sauce Business while maintaining a 9-5?  Do you really WANT to bottle, shrink wrap, label.....800 bottles at a time?
 
Maybe YES, maybe NO....just things to consider~~~

 
I'm completely missing the point of what you're saying. Could you make it blunt so a dummy like me can understand?

 

[Gemini Crow Sauce Company]

 
Sorry for a perforated reply, but what is considered an "approved storage area"?
 
 
 
 

 
I have kind of dealt with this situation recently...
I can't speak for every state, but I'm based out of New Jersey.
 
Whether you make your own sauce, or you have a co-packer do it for you, the finished product is not allowed to just be stored in the corner of your home or a basement....I didn't know that and my local health department put a scare into me...Said that a commercial product couldnt be stored in a residential establishment, but in legal jargon. Even though my basement was bone dry and climate control, it wasn't allowed...
 
In a nutshell, I made an arrangement with a local bakery/deli to store my product....Only a mile from me, and on the way to anywhere I ever need to go to, so it works out for me, and it satisfied the HD.....I think that is what Ann was talking about....

 

[Lucky Dog Hot Sauce]

I prefer co-packing my sauces, and i quote Scott 'Lucky Dog' (i think he said something like this..)... "I like creating sauces and I like selling the sauces, but i don't like making the sauces'.
 
Scott, you said something to this effect, right? LOL

yep, I think he did

No I most certainly did not. I LOVE making hot sauce - I did it for 8 years as a hobby before I ever sold a bottle and I still make sauce as a hobby. It's one of my absolute favorite things to do so I don't appreciate this misrepresentation in the slightest.

lots of interesting commentary being thrown around as fact here.

Let me clarify a few things so that others aren't misrepresenting me, or generalizing the co-pack process:
1. I did not say anything even resembling that "I don't like to make sauce". What I've said is that I'm one guy and I've only got so much time. And when I compared renting a small kitchen to using a copacker, the factors that weighed in the copackers favor were that I could make a lot of sauce in a short amount of time allowing me to focus my limited time on sales as opposed to manufacturing. If I'm in a small kitchen using a 30 gal kettle by comparison, I would have to spend most of my time making sauce - which means it wouldn't be getting sold.

2. Copackers don't always simply "make the sauce for you". My copacker is an hour away and I'm up at 03:45 AM to get there by 05:00 to make every batch of Lucky Dog. I source many of my ingredients, I am standing at the kettle, I am QC-ing ingredients and I am taste testing during production - I'd call that "making sauce" at a large scale. It's a big production line and there are others present operating various pieces of equipment, but this isn't someone "making sauce for me".

3. Not all co-packers are the same - some folks pay copackers to make their sauce and are totally hands-off. Some aren't even in the same state as their copacker. Hell, as I understand it some folks buy pre-made sauce from copackers and slap their own label on it ("private label" sauces). Someone recently told me there are as many as 10 companies selling the same spicy ketchup with 10 different labels. My hot sauce line is my pride and joy - I spent years developing my own recipes and I go to my copacker to make it. And while I don't enjoy waking up in the middle of the night to make sauce, I LOVE doing it.

4. Scale - not all copackers require an enormous qty to be produced. I evaluated 3 copackers prior to selecting mine. There were smaller copackers with greater limitations on equipment, including smaller kettles (30/50/100). In some ways this allows greater flexibility - you can nimbly create small batches of sauce without sinking a ton of $ into inventory. For a hobby-sauce maker or "weekend warrior" that might suffice. But from my evaluation, with that flexibility came greater cost (smaller scale), reduced efficiency (hand-filler as opposed to line filler , etc), lack of scalability and the inability to make my sauce my way due to equipment limitations. The larger copacker indeed has larger kettles (300/500/1000 gal) but you also benefit from economies of scale that way and save on ingredients. This is a business - I needed to seek the most cost efficient means of producing sauce. I also expect my business to grow and the copacker I work with provides seamless scalability.

4. The comment about how using a copacker absolves one of liability is pure fiction. When using a copacker you sign an agreement that absolves them of all but the most basic liability. As a company I carry 2M in liability insurance.

5. It's not as simple as saying "I'm gonna use a copacker!" and calling them up. I mean, if you're buying shiners & slapping your label on them, sure - that's probably pretty damn easy. But opposite what most would assume, while I was evaluating copackers, my current copacker interviewed me. They wanted to make sure I was serious about making sauce - asked about my sales plan and checked my finances. They run their facility night and day - they don't *need* my piddly 300 case order on any given day. Especially since their history is riddled with people who want a glorified hobby or an "ego sauce" who come in, make it once and disappear - all that time spent on label compliance, FDA, scaling the recipe, etc wasted for a short run doesn't help them as a business, and it took me more than 3 months to convince them to work with me.

So for the record, I LOVE making hot sauce - it is my favorite thing to do. And if I had my druthers I'd be standing in the kitchen every day wearing the chef's coat stirring a kettle. Unfortunately I've got rent to pay Nd a dog to feed so instead I'm out pounding the pavement 5 markets a week & making sales calls the rest of the time. And for better or worse, that's a better use of my time than standing in a commercial kitchen all day selling nothing.

The quote y'all were looking for is "you have to ask yourself if it's a better use of my time to be in the manufacturing busines or the sales business"
Next time someone wants to attribute an unflattering statement to me I'd suggest using the quote feature. I believe I've earned that basic level of professional courtesy, thanks.

 

[FlaccidJohn]

 
I have kind of dealt with this situation recently...
I can't speak for every state, but I'm based out of New Jersey.
 
Whether you make your own sauce, or you have a co-packer do it for you, the finished product is not allowed to just be stored in the corner of your home or a basement....I didn't know that and my local health department put a scare into me...Said that a commercial product couldnt be stored in a residential establishment, but in legal jargon. Even though my basement was bone dry and climate control, it wasn't allowed...
 
In a nutshell, I made an arrangement with a local bakery/deli to store my product....Only a mile from me, and on the way to anywhere I ever need to go to, so it works out for me, and it satisfied the HD.....I think that is what Ann was talking about....

I see. They have requirements for a commercial kitchen and commercial storage.

No I most certainly did not. I LOVE making hot sauce - I did it for 8 years as a hobby before I ever sold a bottle and I still make sauce as a hobby. It's one of my absolute favorite things to do so I don't appreciate this misrepresentation in the slightest.

lots of interesting commentary being thrown around as fact here.

Let me clarify a few things so that others aren't misrepresenting me, or generalizing the co-pack process:
1. I did not say anything even resembling that "I don't like to make sauce". What I've said is that I'm one guy and I've inly got so much time. And when I compared renting a small kitchen to using a copacker, the factors that weighted in the copackers favor were that I could make a lot of sauce in a short amount of time allowing me to focus my limited time on sales as opposed to manufacturing. If I'm in a small kitchen using a 30 gal kettle by comparison, I would have to spend most of my time making sauce - which means it wouldn't be getting sold.

2. Copackers don't always simply "make the sauce for you". My copacker is an hour away and I'm up at 03:45 AM to get there by 05:00 to make every batch of Lucky Dog. I am standing at the kettle, I am QC-ing ingredients and I am taste testing using production - I'd call that "making sauce" at a large scale. It's a big production line and there are others present operating various pieces of equipment, but this isn't someone "making sauce for me".

3. Not all co-packers are the same - some folks pay copackers to make their sauce and are totally hands-off. Some aren't even in the same state as their copacker. Hell, as I understand it some folks buy pre-made sauce from copackers and slap their own label on it ("private label" sauces). Someone recently told me there are as many as 10 companies selling the same spicy ketchup with 10 different labels. My hot sauce line is my pride and joy - I spent years developing my own recipes and I go to my copacker to make it. And while I don't enjoy waking up in the middle of the night to make sauce, I LOVE doing it.

4. Scale - not all copackers require an enormous qty to be produced. I evaluated 3 copackers prior to selecting mine. There were smaller copackers with greater limitations on equipment, including smaller kettles (30/50/100). In some ways this allows greater flexibility - you can nimbly create small batches of sauce without sinking a ton of $ into inventory. For a hobby-sauce maker or "weekend warrior" that might suffice. But from my evaluation, with that flexibility came greater cost (smaller scale), reduced efficiency (hand-filler as opposed to line filler , etc), lack of scalability and the inability to make my sauce my way due to equipment limitations. The larger copacker indeed has larger kettles (300/500/1000 gal) but you also benefit from economies of scale that way and save on ingredients. This is a business - I needed to seek the most cost efficient means of producing sauce. I also expect my business to grow and the copacker I work with provides seamless scalability.

4. The comment about how using a copacker absolves one of liability is pure fiction. When using a copacker you sign an agreement that absolves them of all but the most basic liability. As a company I carry 2M in liability insurance.

5. It's not as simple as saying "I'm gonna use a copacker!" and calling them up. I mean, if you're buying shiners & slapping your label on them, sure - that's probably pretty damn easy. But opposite what most would assume, while I was poking at copackers, my copacker interviewed me. They wanted to make sure I was serious about making sauce - asked about my sales plan and checked my finances. They run their facility night and day - they don't *need* my piddly 300 case order on any given day. Especially since their history is riddled with people who want a glorified hobby or an "ego sauce" who come in, make it once and disappear - all that time spent on label compliance, FDA, scaling the recipe, etc wasted for a short run doesn't help them as a business, and it took me more than 3 months to convince them to work with me.

So for the record, I LOVE making hot sauce - it is my favorite thing to do. And if I had my druthers I'd be standing in the kitchen every day wearing the chef's coat stirring a kettle. Unfortunately I've got rent to pay Nd a dog to feed so instead I'm out pounding the pavement 5 markets a week & making sales calls the rest of the time. And for better or worse, that's a better use of my time than standing in a commercial kitchen all day selling nothing.

The quote y'all were looking for is "you have to ask yourself if it's a better use of my time to be in the manufacturing busines or the sales business"
Next time someone wants to attribute an unflattering statement to me I'd suggest using the quote feature so as to avoid any potentially inflammatory statements. I believe I've earned that basic level of professional courtesy, thanks.

I'm sorry if something you said on a previous thread was skewed when mentioned here. I'm sure no one meant any harm and we wouldn't think any less of you anyway.

As for your "corrections", most of it is pretty much what I said. As far as my research showed me, co-packers do all of the cooking and aside from that are commercial kitchens that you can rent.

Yes, co-packers can be remote. Most of the ones I based my article on service out of state clients as their majority of customers.

I have to tell you that what I said about insurance is in no way fiction, and personally I feel it is not professional to call someone "wrong" and not provide a citation or source. I'm sure not all co-packers provide insurance, but many actually offer it a a feature. Meaning they advertise that trait to attach customers.

 

[Lucky Dog Hot Sauce]

You are telling people something that is totally inaccurate and I corrected you because your statement was wrong.

Doesn't get much more "professional" than that.

Thanks for coming in here like some kind of authority with your whopping 4 posts and Wikipedia search though. I've been using a copacker for 2 years. I'd say I've become something of a subject matter expert.

And every client with my copacker has their own liability insurance. The copacker is only responsible for notification of a recall ingredient and manufacturing negligence. Period.

And the 3 copackers I'd previously worked with were the same. How many have you worked with?

Where's your citation or source? Seems unprofessional of you to say something without that.

 

[FlaccidJohn]

You are telling people something that is totally inaccurate and I corrected you because your statement was wrong.

Doesn't get much more "professional" than that.

Thanks for coming in here like some kind authority with your whopping 4 posts and Wikipedia search though. I've been using a copacker for 2 years. I'd say I've become something of a subject matter expert.

And every client with my copacker has their own liability insurance. The copacker is only responsible for notification of a recall ingredient and manufacturing negligence. Period.

And the 3 copackers I'd previously worked with were the same. How many have you worked with?

I beg your pardon!? You, sir are very wrong in your assessment of what is "professional" behavior. I will have you know that all of my information comes directly from the co-packers that I researched. While I appreciate you sharing your experience with the three co-packers that you have used, understand that there are many more companies that have different policies and traits.

I have to ask that you change your attitude to one that is a bit more respectful. This thread was calm and informative, but your childish and arrogant demeanor is disturbing that water in nevative ways.

Thank you and Stay Spicy

To humor you, two of my sources are J&A Foods and Snappy Valley Foods.

 

[Lucky Dog Hot Sauce]

Respect is earned, not given.
I've worked with 4 total, plus I know ~30 companies that all use copackers who have all had the exact same experience as me. And they all have product liability insurance. Because they need it.

So, and with with all due respect, stop pretending to be an expert in something you know little about.

Ps - you're now blocked - so you won't have to worry about my attitude any further.

 

[FlaccidJohn]

I'm very sorry everybody. That was a horrible tangent. While Lucky Dog is not wrong to an extent, he is making the mistake of assuming that one company is the same as all of there others. I hope you will use your good judgement to realize that fact yourselves. The information I provided is not incorrect. It is not complete (I'm only human after all), but it is accurate. The information comes directly from various co-packers. Yes, I did find plenty that do not offer insurance. But since this thread is focused on "the little guy", I wanted to keep the focus on co-packers that offer insurance as a part of their services and price.

If anyone would like to share their experience to help get the thread back on track, please do so!

Thank you for your patience.

Stay Spicy!

 

[salsalady]

My apologies to LDHS for the inaccurate quote.
 
 
 
 
One of your original questions was-
-Do you recommend it (a co-packer) for the home sauce-meister?

People also have to consider their skill set.  Yes, anyone can learn to process their own sauces, but it's a looong road with a lot of mistakes if the person doesn't have at least basic food service knowledge of health and safety issues, some business experience, and a slight clue about large scale cooking.  By large scale, I mean at least restaurant quantities.  Things like...large pots of sauce with sugar in it over a gas flame will scorch in a heartbeat. 
 
 
Also, how many bottles do you think you'll be selling and how fast will they be selling?  How long will it take to actually pack all those bottles by hand in a commercial facility?  Do you have TIME to get the processing done for your Hobby Sauce Business while maintaining a 9-5?  Do you really WANT to bottle, shrink wrap, label.....800 bottles at a time?
 
Maybe YES, maybe NO....just things to consider~~~

 
 

 
I'm completely missing the point of what you're saying. Could you make it blunt so a dummy like me can understand?

 
I was just throwing out things to consider when deciding whether or not to use a co-packer or try and do it yourself. 

 

[FlaccidJohn]

I was just throwing out things to consider when deciding whether or not to use a co-packer or try and do it yourself. 

Ah I see! Yes, very good points! Thank you for mentioning them!

 

[Lucky Dog Hot Sauce]

My apologies to LDHS for the inaccurate quote.
 

No need SL - you've been so instrumental in helping my company over the years, you have nothing to apologize for. We're good.

 

[Sam & Oliver]

 
1. You don't make your sauce. You miss out on the fun of birthing your creation yourself. However, with a co-packer producing the selling-safe products to help fund your hobby, you can make your own personal batches at home.
 
2. Co-packers can be expensive. I can't quote any prices, because they vary by recipe. But you have to pay these guys for overhead, labor, ingredients, bottles, and insurance. On top of that, you need to have your product shipped. Not very good for small businesses or individuals.
 
3. Co-packers require your order to be big. Because these companies buy everything in bulk and dedicate large machines to one product at a time, co-packers often require a commercial-sized order. A common minimum is often One Skid. That's over 1,000 fluid ounces, and a lot of product. Again, small businesses and individuals can't really utilize this.

 
While #1 is somewhat accurate, I disagree.  I spent over a year and a half "birthing" my creation by spending thousands on materials, trials, r&d, samples, etc myself.  I knew what I had, I just couldn't do it, logistically.
 
#2 - yes and no.  One of my sauces was near $27 a case.  Another was $13.  It varies by recipe yes, but it also varies by name brands, etc.  Freight shipping wasn't as bad as it sounds and divided up with the total bottles you get, the price per bottle to ship was negligible to ship.
 
#3 - 1 skid is about 300 gallons I wager.  That's 300 cases of 12, or 3600 5oz bottles, or 1200 pints, etc.
 
As a little guy, it was the BEST solution because I don't have a $70,000 certified kitchen, $100,000 inspected bottling equipment, time, staff and ambition to try and bottle 3600 bottles.  In a single day, mind you.  I was literally ready to walk away from food sauces all together until a friend showed me his barbecue sauce bottles he got from Endorphin Farms.  He started the game after me, and finished before me, and I was pissed at first.  "How can this be, I have put in so much time" - trying to do it myself, that is.
 
The state of CT makes it very challenging to start a food company.  In fact, the inspector made it clear to me verbally that the state changed it's regs to "Prevent frivolous small food businesses from opening."  Stay classy, Connecticut.
 
If I got tired half way through, I would have to re-log the entire batch the next day, and it became a massive hassle.  I know lots of people who are closing up shop in CT due to the absurd regs now.
 
So I emailed EF, then called and talked to them, a suggestion I would make to anyone is to call and talk to a person, because there's always room to accommodate your needs that a computer can't provide.  I shot over some recipes, we discussed terms and I settled on my Cinder sauce as a startup due to cost and risk.
 
So, interesting read OP, but I rebuttle #1, 2 and 3 in your list there.  I don't think these are accurate and necessarily bad things.
 

There should be several in the Miami area, Endorphin Farms is up in St Augustine

 First and foremost, though, is get the sauce absolutely dialed in and make sure people really do love it and are not just being nice.  Get opinions from strangers (especially people here on THP who are familiar with chiles and usually eat a lot of different sauces) not just friends and family (who tend to be nice and say they like it when they don't...)
 
Co-packers are expensive.  I was quoted $600 just to review my (already PA approved) recipe!  What the heck?      Every recipe is different and you'd have to talk to the co-packer about your specific recipe for them to generate a production run quote.  

 
Not sure why the quote won't float to the top, but +1 for Endorphin Farms.  Wonderful experience and little confusion, very accommodating, would do business again (and will).
 
About your 2nd point I quoted: If you plan to large scale it, drop some money and try small-batching a bunch of sample bottles, either 1.7oz woozy or 5oz woozy bottles you can snag from any bottle supplier, (I used fillmore container) - and print your own labels.  Put it out there and specifically look for the negative critiques.  Sounds funny, right?  But the negative reviews and critiques are your best friend.  That's pure gold, if you find that a majority of the people "like" the sauce to placate you, the guys who are more into sauces or food will tell you "A bit much on the vinegar" or "it has a funky aftertaste" or "way too much salt, dude," "didn't go good with my cornbread" "was difficult to pour" "didn't smell appealing, didn't taste that good either" - these critiques help you refine and sculpt your final product!

You may be confusing the start-up fee (initial setup and sample run) - with analysis.  The price you quoted is higher than I paid but consider this:
You are doing a setup run for a large-batch operation.  They do a trial run, by hand.  They send you a few bottles so you can be 110% sure your sauce is where you want it.  Figure 2 hours plus materials to make about a quart of sauce, shipping to you and the professional know-how they are putting into the sample.  Take this sample of expensive sauce and get it in front of as many people as you can.  Bring it to work, call friends, family, etc.  Try it yourself.  Ask someone who is a chef or cook... take notes and after the bottles are kicked, compile those notes and have a discussion with the Co-Packer.  Let them know.  Then they make the changes and get you another sample batch.  Once again, get this in front of everyone until the last drop is done.  Tinker, and repeat  until satisfied.  THEN lock it in.  There's more than just a 1-time setup "fee" for hundreds with no justification.