Austin Stevenson & Lauren Tamburro
Launching a new product is exciting, but for a small business it can also be a significant challenge. Everywhere you turn, the stakes are high – and finding a responsive external or co-manufacturer can be the difference between launching on time and putting a project on hold. If your team doesn’t have a network of known manufacturers, you’re facing the additional challenges of finding a partner from scratch who has the time to realize your vision and whose capabilities meet your standards.
Launching an infused hemp or cannabis product adds an additional layer of complexity; navigating tight regulations, interstate laws, ingredient interactions and more will further narrow the pool of potential partners. Still, whether or not your product is infused, many of the core considerations when selecting a co-manufacturer are the same.
This article will outline 12 questions that every business should ask when selecting a co-manufacturer, from first interactions to finalizing the contract and launching an infused product.
12 Questions to ask a potential co-manufacturer
- Do you manufacture my type of product?
We’re starting with the basics – asking this question up front will save you time by immediately ruling out the options that can’t work, no matter how perfect they may otherwise seem. This is particularly important for cannabis and hemp products. Will the manufacturer work with these ingredients? Do they have any experience doing so?
If the answer is no on all accounts, take the opportunity to ask if they know of another manufacturer that does work with your product type. Remember, if you don’t ask, the answer is always no.
- Do you have line time available, or are you at capacity?
If the manufacturer has time available, find out how far in advance you have to book line time – this will be an important consideration in timing your launch. If the manufacturer is at capacity, there are a few follow up questions to consider. For example, are they in the process of installing any new lines? Many companies are in the process of growing their manufacturing lines, and even if they’re not, depending on your volume requirements and those of other clients, they may decide to add a line.
Another option is to ask if they have lines that are not at capacity in a different pack size or material. For example, if they don’t have capacity for 330ml bottles, they may be able to do 250ml cartons. If the manufacturer meets and exceeds your other requirements, adjusting your pack size may be a worthy compromise.
Finally, if the manufacturer is still at capacity, don’t be afraid to ask for a referral.
- What is your minimum order quantity (MOQ)?
This is a critical question to ask to ensure that a manufacturer is a good fit for your business size. There’s nothing like being 30 minutes into a call, only to find out that the manufacturer has a 1 million unit MOQ and you’re not able to meet it.
- What is your fee structure, and can you provide tiered pricing?
This is one of the smartest questions you can ask manufacturers and ingredient suppliers. You may find that your preferred order quantity is close to getting you pricing at the next tier up. Depending on the shelf life of your product, you may be able to purchase a little more to unlock savings. Every company will want to find ways to save money on a new product after launch, and tiered pricing is something to keep in mind as you may be able to unlock the next tier a year or two down the line.
- Do you have a pilot plant?
Pilot plants are smaller processing plants where small and test quantities of a product can be produced. If the answer is yes, make sure to follow up with additional questions: What size trial batches do you run? How far in advance do I have to book pilot time? Are there any differences between the pilot and production line that will require formulation changes at the production level? Can I pack trial products into finished packaging, or will the product be white labelled? Will someone on your team be available during the run to offer guidance if we see any challenges running on the equipment?
- What do you offer on the certificates of analysis?
Your product will need analytical testing, and cannabis products in particular require stringent testing every step of the way. The manufacturer should be able to provide information on the physical and microbial tests that they perform in-house, as well as those done by a third party laboratory. Find out what lab they use, and what the turnaround time is for testing, as well as any additional fees for testing. Make sure the lab is accredited and has all the necessary certifications to be compliant in (ex. ISO-17025). To get a thorough understanding of their process, request an example Certificate of Analysis, including analytical methodologies used. If a manufacturer is new to cannabis, it is important to make sure that they are familiar and compliant with each relevant regulation.
- Do you offer special services, such as Kosher, Organic, or non-GMO certifications?
If so, confirm how often the site is audited for the certificate in question – some larger manufacturers will have an auditor come weekly. If they don’t offer the certifications, check to see whether they have procedures in place to support your product.
- What are your ingredient capabilities and limitations?
Working with edibles and liquids brings up a host of questions regarding your manufacturer’s ingredient capabilities. Add cannabis to the mix and these questions become even more central. Will the manufacturer be able to work with the pH, viscosity, particulates in your product? What are their thermal and chemical processing capabilities? How do they feed the ingredient into the line? How accurate is that dosing unit?
It’s also important to find out if the manufacturer already has ingredients and partners, or if you need to provide that. If it’s the latter, find out what documents you will need to provide from your ingredient suppliers prior to running a pilot plant trial, and prior to production. Do they have any document requirements that are specific to their company?
This is also your opportunity to learn more about the manufacturer’s food safety plan. What allergens do they have on site? What line do these allergens run on, and what is the cleaning procedure between clients/products? Quality assurance questions may not be on the initial call, but it’s a good subject to raise up front. Some sites will not permit any allergens, and if your product has it then it’s not the right manufacturer for you.
- Tell me about your purchasing offerings
Find out if the manufacturer offers turnkey purchasing – where they order ingredients and packaging – or will this be your responsibility. For small companies, a turnkey external manufacturer can significantly cut down the amount of work for the operations team.
Additional purchasing questions should include: Do you have refrigerators, freezers and flavor cabinets on site or at an off-site warehouse? Is there a fee for storing extra ingredients before or after production? Is there a limit on the amount of ingredients/packaging to remain on site after production?
- What is your manufacturing shift schedule?
Bear in mind, some plants run two or even three shifts per day. If this is the case for your future partner, be prepared to have enough of your staff on hand for pilot and production runs. If possible, try to get the first shift team. Many plants offer their most experienced workers the choice of shift, which means oftentimes the first shift is the most experienced.
- What is the timeline from production to release?
You may also decide that you want to release your product on waiver – meaning prior to microbial or physical testing. Does the manufacturer permit this in certain circumstances? Remember, to release on waiver your company will take on all liability of the product.
- Will my production ever be pushed out to accommodate a larger client?
After establishing the partnership and securing line time, remember that you are one of forty clients, and that you’re just starting the relationship. The manufacturer will know if this is something that could happen, but may not tell you unless you ask directly.
In general, use these questions as a platform and precedent to advocate for yourself and your product. As your relationship kicks off, determine your key contact and their preferred communication style, and don’t be afraid to follow up a few times a week, politely.
As you go through the process of finding the right co-manufacturer, do not forget to leverage the resources available to you. In particular for infused products, your active ingredient suppliers are often in close communication with manufacturers, and will likely have contacts that you can leverage. Making sure that these two partners are able to work together effectively will be critical to the success of your product.
As you begin this search, remember: it is unlikely that you will find the perfect co-manufacturer with your first call. Creating a spreadsheet with each company’s answers will be a valuable reference when you’re on your seventh or eighth conversation or need to provide a summary of options to your team. The time and dedication that you put in at this stage will pay off in spades when you have the final product in hand, and are ready to share it with the world.
About the Co-author
Lauren Tamburro, Director, Technical Services & Sales, Vertosa: Lauren is an expert in new product development, managing projects from concept to commercialization, plant scale-up and the product development process. Prior to joining Vertosa, Lauren performed analytical chemistry for six years and as Senior Scientist began launching new food products at Mondelez International, primarily focused on chewing gum. As Senior Manager of Research and Development at ALOHA she launched plant-based protein bars, powders and aseptic ready to drink beverages.