Understanding the Legal Elements of Co-Packing

January 24, 2022

A co-packer is a type of food manufacturer that agrees to develop products based on the requirements and recipes established by a food company. Working with a co-packer allows these companies to more efficiently get their products to the shelves without having to place extra investment in equipment and real estate.

Co-packing agreements can be an excellent investment for these types of businesses. Food companies and marketers can get access through these agreements to manufacturing facilities to bring their products to life at a much lower cost than they’d otherwise have to pay if they were to try to go it alone. They also get to take advantage of the knowledge and experience that a co-packer has.

Need some help understanding co-packing benefits? Here are just a few examples of some of the fundamental strengths associated with developing such an agreement.

Supply capabilities

Any co-packing agreement you establish can require manufacturers to use ingredients from a limited, approved list of suppliers. This can help you avoid potential food product recalls due to undeclared allergens or quality issues. Co-packers are happy to work with supplier lists when these suppliers are reputable and available.

Quality guarantees

There are some natural challenges associated with developing products to a certain quality standard when you are manufacturing that product in a third-party facility. For companies in co-packing arrangements, they can overcome these challenges by being detailed with product specifications and by sampling products regularly as they’re produced. Work with your co-packer to develop arrangements that allow you to feel more comfortable about the quality of products you’re developing in their facility.

Maintaining trade secrets

Some companies might be nervous about working with a co-packer because they will be inherently exposing some of their trade secrets or intellectual property as a result of the arrangement. The simple method of getting around this is to begin all contracts with a non-disclosure agreement (NDA) that requires confidentiality for all trade secrets. Co-packers are understanding of these needs and typically even expect to sign an NDA with any agreement they make. If the co-packer is unwilling to enter an NDA, then you should move on to a different provider.

Food safety

For food companies, it is important for them to implement food safety practices into any arrangement they develop with a co-packer. Add in a few clauses about food inspection, appropriate vendors, cleanliness standards and other issues that will protect food quality, and this will go a long way toward ensuring the safety and quality of all products being made in a co-packing agreement.

These are just a few examples of some of the legal issues and arrangements that will be a part of any co-packing agreement a food company develops with a third party. Interested in learning more about co-packing and how these benefits get passed on to the consumer? We encourage you to contact the team at Liquid Manufacturing Solutions, Inc. with any questions, as we have quite a bit of experience with such agreements. Reach out today to schedule a consultation and learn more about how we can assist you.

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