co-packer had a consultation with a co-packer today.

TheGoodGeneral

TheGoodGeneral

Today's meeting went really well, first off they can produce my sauce!
My sauce tested well at a pH of 3.8 (I had no doubts as I use a digital meter)
Thanks to the info I've picked up from this forum I went in fully prepared with a list of questions.
The good---they can do split batches without charge.
--they are local and family run, I got a great vibe from them
--shipping a pallet to my storage is cheap and only 12 miles!
-- they are going to allow me to bring them my own grilled habaneros. I'll grill them in a commercial kitchen and transport them in sealed 5 gallon buckets. This will save a ton from having to go with IQF roasted peppers.

The bad--the cost per bottle is higher than I anticipated. $2.08 delivered. Does this seem fair? Is it in the same ballbark as what others on here pay? I hate to ask but I want to have comps. I currently wholesale at 3.50 not a lot of meat left at $2.08

I may try and negotiate the rate down to $1.75 per bottle. Thoughts?
 
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Give it a shot and see if you can get it for that price.
 
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Great to hear the meeting went well!.  Good pH, everything's looking good. 
 
I haven't done a co-packer run,  those that have done can speak to the prices, etc. 
 
 
Specialty sauces should go for $4.99 retail (MINIMUM)  to a common price point of $5.99-6.99 *($7 bottle)  on up to $12-17 /bottle. 
 
I don't deal with wholesalers or distributors.  That adds another 15% to the equation, so that needs to be factored in.  I locally wsl one sauce for $3.75, they  retail $4.99.  But there are no additional levels or distribution. 
 
You should negotiate the heck out of your processing agreement.  I was quoted $600 to review my recipe and PA letter (which I already have!!!)  HELLO!  How long does it take to look at my recipe and approved PA letter???  
 
Right after this quote, I got sick and didn't pursue it further.  My feeling was that the co-packer was quoting for doing a full work up on an unlicensed sauce.  I was going to offer them $50 for 1 hours work which is WAY more time than needed to read my recipe and my approved PA process. 
 
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TheGoodGeneral said:
Today's meeting went really well, first off they can produce my sauce! - Good news

My sauce tested well at a pH of 3.8 (I had no doubts as I use a digital meter) - bit high but doable

Thanks to the info I've picked up from this forum I went in fully prepared with a list of questions.
The good---they can do split batches without charge.
--they are local and family run, I got a great vibe from them
--shipping a pallet to my storage is cheap and only 12 miles! - define "cheap"? 

-- they are going to allow me to bring them my own grilled habaneros. I'll grill them in a commercial kitchen and transport them in sealed 5 gallon buckets. This will save a ton from having to go with IQF roasted peppers. - Just because they allow it doesn't mean the health inspector will. Make sure you clear this process. I am required to produce spec sheets for every ingredient in my sauces (I'm in CA though where it's brutal regulatory-wise) so you might need to have something like this for an ingredient produced by you. They may need to inspect the kitchen in which you produce those grilled peppers. 

The bad--the cost per bottle is higher than I anticipated. $2.08 delivered. Does this seem fair? Is it in the same ballbark as what others on here pay? I hate to ask but I want to have comps. I currently wholesale at 3.50 not a lot of meat left at $2.08 - It's a bit high, and your big concern will be with the fluctuation of produce prices - I've seen habs skyrocket lately for example.  Also, does the $2.08 delivered price include the cost of your habaneros or the kitchen you're renting to process them?

I may try and negotiate the rate down to $1.75 per bottle. Thoughts? - I think you should negotiate them down to as low as they can possibly go. :)
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Lucky Dog Hot Sauce said:
 
Today's meeting went really well, first off they can produce my sauce! - Good news
My sauce tested well at a pH of 3.8 (I had no doubts as I use a digital meter) - bit high but doable- --I'm not a fan of vinegar so I use as little as possible while maintaining a safe ph....that being said the Co-packer did suggest lowering that a bit. 
Thanks to the info I've picked up from this forum I went in fully prepared with a list of questions.
The good---they can do split batches without charge.
--they are local and family run, I got a great vibe from them
--shipping a pallet to my storage is cheap and only 12 miles! - define "cheap"?    The delivery price is $120 per pallet
-- they are going to allow me to bring them my own grilled habaneros. I'll grill them in a commercial kitchen and transport them in sealed 5 gallon buckets. This will save a ton from having to go with IQF roasted peppers. - Just because they allow it doesn't mean the health inspector will. Make sure you clear this process. I am required to produce spec sheets for every ingredient in my sauces (I'm in CA though where it's brutal regulatory-wise) so you might need to have something like this for an ingredient produced by you. They may need to inspect the kitchen in which you produce those grilled peppers. ----The kitchen I currently use is inspected and good to go!
The bad--the cost per bottle is higher than I anticipated. $2.08 delivered. Does this seem fair? Is it in the same ballbark as what others on here pay? I hate to ask but I want to have comps. I currently wholesale at 3.50 not a lot of meat left at $2.08 - It's a bit high, and your big concern will be with the fluctuation of produce prices - I've seen habs skyrocket lately for example.  Also, does the $2.08 delivered price include the cost of your habaneros or the kitchen you're renting to process them?
Yes, the $2.08 price is including the cost of the peppers and the cost of grilling them. I'm getting habaneros for 2.90/lb 

I may try and negotiate the rate down to $1.75 per bottle. Thoughts? - I think you should negotiate them down to as low as they can possibly go. :)---I'll see what I can do!
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Thanks for chiming in Lucky Dog, I've learned a ton from your posts on the subject.  Also congrats on the Kickstarter campaign!
 
SL-Yeah I'm currently retailing at $6-$7.49 depending on the merchant.  I sell it out of my tattoo shop(my full time job for the last 16years) for $6 for one or 2 for $10. 
 
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I pay $85/pallet to deliver it 1.5 hours. $120 is not that cheap IMO. 
 
TheGoodGeneral said:
Thanks for chiming in Lucky Dog, I've learned a ton from your posts on the subject.  Also congrats on the Kickstarter campaign!
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You're totally welcome, and thank you - still tons of work to be done, but after everyone has their rewards I'll start shopping for the new wheels, which is when I'll finally be able to enjoy it a bit! 
:cheers: 

Re: habaneros, it's more than just the kitchen. You are making, then transporting a processed ingredient. (e.g. you process it by roasting the peppers) - I am not sure if that requires any special documentation regarding cooking/hold temps or container type for transporting, or safe food temps for the post-roasted peppers. I know that would all be kind of dicey in CA.
 
Maybe Salsa Lady can chime in here, but I am seeing potential red flags there. It might be more than just the kitchen but the ingredient itself that the health dept has to inspect. Since it's a processed ingredient the local authority may have cause to regulate that process as well.  
 
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I can see some potential for additional inspection/approval since the habs are a processed ingredient like LDHS said.
 
Potential problems I see that would need to be addressed-
most critical would be the handling after the chiles are cooked.  You can't just throw them all in a bucket.  Too hot, wouldn't chill fast enough, how long are they in the bucket before making the sauce (2 days, 2 weeks???), is the bucket refrigerated?
 
If your turnaround time is a day or two between grilling and saucing, you can get away with chilling the chiles in flat pans (2"), then consolidating them into larger pans/buckets for transport. 
If it's longer than a day or two, I don't know what the inspector would say, but I would look at freezing the chiles to guarantee no nasties getting started.
 
 
 
How I would picture it being done is-
chiles are grilled, (and then maybe run them through a food processor), chill the pulp or pods in flat pans, and if it needs to be frozen, then put the pulp or pods in smaller tubs (some kind of freezer tubs, something flat enough that it will freeze quickly, Glad has some 8-cup containers that would work good and are pretty inexpensive, or maybe even a larger size if they are fairly flat).  Then freeze the containers. 
 
Again, this should be done in stages, (don't just stack the plastic tubs 4-high and 4-deep and 8-wide...the middle ones won't freeze right away).  With the chiles in the fridge immediately after cooking, you can put a layer of tubs in the freezer, then 8 -12 hours later add another layer.  Depending on the freezer and how good it is~
 
Chain of custody may be a concern from the inspector with this also.  The freezer may need to be located at the commercial kitchen.  If the chiles will be there long term, you may need to buy your own little freezer and have it at the kitchen....That's all up to what's available at the kitchen, is there space for your own freezer, what's their policy regarding stuff like that...
 
If you have a good plan for processing made before talking to the inspector, show that you've taken care of fast chilling, maintaining cold temp until processing, or freezing...that will increase your chances of the AHJ signing off on it. 
 
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Sorry if it was more than asked for, just trying to help. 
 
 
 
And, just because I just can't help it......
In working in a shared use kitchen, one of the people using the kitchen was a cake maker....as in...high end wedding cakes....$$$$.... it didn't work out to have her butter in the same cooler as my chiles and another farmers' onions.....
 
She needed a separate 2-door cooler that would keep her ingredients "un-polluted" by the onions and chiles from the rest of us.  There was room in the kitchen for that separate refer so they worked that out.  I don't know the specifics of the deal and that was 10 years ago. 
 
Cooking/grilling chiles in a shared use type kitchen may need some special considerations.  At the kitchen I was using, there were some "common use" pans that I could use.  Pots and flat pans.  The caveat is... those pans have to be 100% clean for use by another person (no chile residue).  Not sure what equipment will be used to grill the chiles, but it's something to consider.
 
Aside from the SS Sinks, I mostly used only my own equipment while working out of the shared use kitchen.
 
again, hopefully it's not TMI....
 
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