co-packer Copacker preliminaries

[HellfireFarm]

I've narrowed my search down to a couple of copackers that are relatively local. I'm leaning toward one that is in the nearest town. But I'm curious about the process of getting set up with one.

So far they all want an NDA - that makes sense, it really applies to THEM to keep my recipes confidential. They all have minimum runs. They all have very specific labeling requirements, and companies they recommend to work with for design and printing. I need to provide my recipes in order to get a quote.

BUT, one of them - the close one - has a much more comprehensive "Customer Information Packet" that outlines a few extra steps or requirements the others don't mention, with additional costs noted. I'm wondering if the others just aren't listing these steps and that comes in at a later time? (they don't seem unreasonable but I'm not totally sure they're needed for intrastate sales, or apply to smaller outfits like me). Again, they all make sense, even IF they don't immediately apply due to business size/intrastate sales. Also do the costs seem reasonable?

• Nutritional Panel (Pretty sure there's a business size requirement) $150
• Process Authority Letter (I've seen this mentioned around here) $200
• Product liability insurance with copacker named (makes sense but nobody else mentions it)

No objection to any of this, mainly wondering if the costs are reasonable - and curious why only this one mentions it in their info document.

 

[HellfireFarm]

Also, there's a $400 first run "setup" fee. Minimum runs for dry products is 200lb - about the same as the others.

 

[WarrantMan]

From my experience I recount.

The process authority letter is a legal requirement. This is where you send a sample of your product to a “process authority” and they will test the sample you supply. They will in return provide a letter detailing how your product should be produced, which will include such details as temperatures and PH measurements. I have such letters from NC state and from the Clemson university for my products .The process authorities are usually different state agricultural departments that also have dominion on food. https://www.clemson.edu/extension/food/food2market/product-testing.html https://foodbusiness.ces.ncsu.edu/our-services/


The fees for the process letter is nominal. Do a little research and I will guess your copacker is making some extra$. That’s what they do. They (the process authority) will also (usually included in the fee) send back a nutritional panel as well. Odd thing about the nutritional panel, Federal regulations make it mandatory (speaking off-the-cuff) only when you have (I believe) 100 or more employees or produce in excess of 10,000 units of product, to have a nutrition panel. I have one on my label, not because of requirements, but because I think people want to see it. But, I will say it bit me in the ass a year or so ago when the Federal regs changed on the panel and I had to revise my labels – not cheap…

The product liability insurance cost would be (I assume) included in the "setup" fee. This was the deal whenever I first got started using a copacker. I then had to purchase and maintain my own liability policy over the years to be able to sell at certain venues.

.

 

[salsalady]

Couple further questions-
NIP- are they generating that for you based on your recipe for the cost of $150? I don't have a NIP, and I believe WarrantMan is correct in that there is a minimum number of employees or units produced in a year. You could skip the NIP for now and down the road, print the NIP on a small sticker to add to the bottle, if the label doesn't completely go all around the bottle. My labels have about 1 1/4" gap on the back where I can put price stickers, BestBy, etc.

Insurance- we have a liability insurance policy for the electrical business that runs $1100/year. Added on to that is Texas Creek Products which runs $62/year. Additional Insured is standard, doesn't cost anything. I have it for one grocery store, and have had to do that for festivals or events. Note- do not go to your vehicle insurance agent. Find a business insurance agent and SHOP AROUND!

PA process review- are they a licensed process authority and will do the process review for $200? That price seems a little high, but I think the last one I had done thru Univ Nebraska Lincoln was $150. Cant remember... I think UNL has a form and prices listed on their website. A lot of universities offer this service, but the quality and speed of the service varies greatly. I tried to use WSU 20 years ago and they were like 6-9 months to get a simple review of a vinegar based sauce done. UNL has done a review in about 6 weeks when they weren't busy.

 

[HellfireFarm]

Thanks for the feedback.

Now that I'm clear on the process authority, I realize I've actually done it before. Ag dept. required that for my self-processed pepper powders that I was using in my other products (i.e. candy). I did that through NCSU. I just checked their website for current pricing and actually the copackers numbers seem reasonable: $150 for nutritional panel, and $150 for process testing. So looks like they're getting $50 out of that last one. Total if I did it myself would be $300, vs. $350 with them.

I already have business insurance through an agency that specializes. It has “Products-Completed Operations”, I need to look more into that to see if that actually covers what they want. But getting a rider on this policy takes me dropping an email to my agent. Had to do that a few times.

I'm aware that the nutritional panel is only mandatory at a certain business size - but I don't remember if a different rule kicks in when you go interstate. I might be able to argue that one but not sure it's worth it.

I'm definitely leaning toward this one because 1) they're local, 2) they have the most complete prospective customer packet I've seen, and 3) they are VERY responsive (owner is on vacation until next week and responded late yesterday evening to an inquiry) - again, more so than any others I've contacted in-state.