Knowing how to choose a co-packer is the difference between a brand that scales into retail and a brand that spends its first eighteen months firefighting production. A co-packer, short for contract packer and often called a co-manufacturer or co-man, is a third-party facility that produces, fills or packages your product to your specification under your brand. Almost every emerging food, beverage, supplement and beauty brand in the United States uses one. Very few choose well the first time.
Brand Refinery is a CPG consulting firm that helps consumer brands build U.S. supply chains and win retail partnerships with Walmart, Target, Kroger, Costco, Whole Foods and Ulta. This guide covers the co-packing models, the questions to ask before a plant tour, the certifications retailers will check, the contract terms that protect you, and the red flags we see most often when a brand brings us a co-packer problem.
Tolling vs Turnkey: Pick the Model Before the Partner
Co-packers work on two basic models, and many offer both.
Tolling means you supply the ingredients, components and packaging, and the co-packer charges a fee per unit or per run to convert them. You carry the inventory risk and the procurement workload, but you control your bill of materials and your supplier relationships, and the per-unit fee is lower.
Turnkey means the co-packer sources ingredients and packaging, produces the product and invoices you a finished-goods price per unit. It is simpler to run and better for a small team, but your cost of goods now includes the co-packer's procurement margin, and you may not know which suppliers sit behind your formula.
For a first production run, turnkey is usually the right call because it removes a procurement function you do not have yet. As volumes grow, brands often move key inputs to a tolling arrangement to claw back margin. Decide which model you need now, and which you will need in two years, before you shortlist facilities.
Step 1: Define What You Actually Need
A co-packer search goes wrong when a founder shops for a facility before writing down the specification. Before any outreach, document the following:
- Product and process. Category, formulation, shelf life target, processing requirements (hot fill, cold fill, aseptic, retort, high-pressure processing, baking, blending, cosmetic filling), allergen profile, and any certification claims such as organic, kosher, gluten-free or non-GMO.
- Packaging format. Exact container, closure, label or sleeve, case pack, pallet configuration. Co-packers are built around specific filling lines; a facility that runs 12-ounce cans may not run 16-ounce cans.
- Volume plan. Units per run now, in twelve months and in twenty-four months, tied to your retail pipeline rather than your hopes.
- Geography. Where your distributors and retail accounts are. Freight from the plant to the distribution centre is a real cost line.
- Retail requirements. Which retailers you are targeting and what certifications they require of the producing facility.
Step 2: Understand Minimum Order Quantities
Minimum order quantities are the first filter. Published industry ranges in 2026 run roughly 5,000 to 15,000 units per SKU for many food products, 3,000 to 10,000 for cosmetics, and 10,000 to 50,000 per SKU for beverages, with small specialty facilities running shorter batches at a higher per-unit cost and large plants requiring far more. The number that matters is not the published minimum but the minimum at which the co-packer's pricing becomes workable for your margin model.
Ask for pricing at three volumes: the minimum, your realistic year-one run size, and the run size you expect once you have a regional retail placement. The shape of that curve tells you whether the facility can grow with you or whether you will be searching again in a year.
Step 3: Verify Certifications and Compliance
Retailers and distributors will check your co-packer's paperwork, so you should check it first.
GFSI-recognised food safety certification. Most national grocery and club retailers require the producing facility to hold a GFSI-benchmarked certification, most commonly SQF, with BRCGS and FSSC 22000 also accepted. SQF Edition 10 was published in March 2026, but audits continue against Edition 9 until the transition, which SQFI has stated will not begin before 2 January 2027. Ask for the current certificate, the most recent audit score and the audit report, not just the logo on the website. Retail programs typically expect scores in the Good or Excellent bands, and a facility whose score has slipped puts your supplier approval at risk.
FDA registration. Every facility that manufactures, processes, packs or holds food for U.S. consumption must hold a current FDA food facility registration, renewed biennially. The 2026 renewal window runs from 1 October to 31 December 2026. A lapsed registration stops product moving. For cosmetics, the facility must be registered under MoCRA, and your products must be listed.
Category-specific requirements. Low-acid and acidified foods require FDA process filings and a process authority. Dietary supplements require cGMP compliance under 21 CFR Part 111. Products on the FDA Food Traceability List will need to meet FSMA 204 recordkeeping by the compliance date of 20 July 2028, and large retailers may ask for readiness earlier.
Insurance and recall capability. Confirm product liability coverage, a written recall plan and a recent mock recall. Ask what happened the last time a lot had to be traced.
This section is general information, not legal advice. Requirements vary by product category and change over time, so confirm them with a regulatory adviser before committing to a facility.
Step 4: Run the Plant Visit Like an Audit
Never sign with a facility you have not walked through. On the visit, pay attention to the things a brochure cannot show you: housekeeping on the floor, allergen segregation between lines, how changeovers are managed, the age and condition of the filling equipment, and whether the quality manager can answer questions without checking with sales. Ask to see how they handled a recent customer complaint. Ask which brands they lost in the last two years and why.
Talk to current customers. A co-packer that will not give references, or that only offers references from brands it has carried for a decade, is telling you something.
Step 5: Negotiate the Contract Terms That Matter
A co-packer agreement is where founders lose the most money through omission. The terms below should be in writing before your first run.
Specification and quality. The finished product specification, the acceptance criteria, who tests what and at whose cost, and what happens to product that fails.
Pricing mechanics. The unit price at defined volumes, what triggers a price change, how ingredient and packaging cost pass-throughs are evidenced, and payment terms. Expect to pay a deposit on early runs.
Lead times and scheduling. Standard lead time from purchase order to ship, how line time is reserved, and what priority you receive against larger customers in peak season.
Yield and loss. Acceptable production loss on your supplied materials under a tolling model, and who pays for loss above that threshold.
Intellectual property and confidentiality. Your formula, your artwork and your process improvements remain yours. The co-packer may not produce a lookalike for another customer or for its own label.
Exclusivity and non-compete. Decide whether you need the facility to decline direct competitors, and what you will give in return.
Liability, recall and insurance. Who bears the cost of a recall caused by a facility failure versus a formulation failure, with insurance certificates naming your brand as an additional insured.
Termination and transition. Notice periods, what happens to inventory, tooling and your materials on exit, and your right to the technical documentation needed to move production.
Audit rights. Your right, and your retailers' right, to audit the facility with reasonable notice.
Red Flags We See Most Often
The co-packer that quotes a price without seeing a specification. The quote will change once they do.
The facility whose quality manager is also the sales manager.
A minimum that is suspiciously low for the category. Either the facility is underutilised for a reason, or the price at that minimum will not survive your margin model.
No written specification after the first run. If you cannot show a retailer what you make, you cannot show them you made it consistently.
Pressure to sign a multi-year exclusive before a trial run. Run a pilot batch, test it in market, then commit.
How Co-Packer Choice Affects Everything Else
Your co-packer determines your cost of goods, your lead times, your ability to respond to a Costco regional order or a Target reset, and whether a retailer's compliance team approves you at all. It also shapes your launch budget. Our guide to what it costs to launch a consumer brand in the U.S. shows why the first production run should never consume more than a third of launch capital, and our distribution guide covers how the plant location feeds into freight and 3PL decisions. International brands entering the U.S. face an additional choice between importing finished goods and producing domestically, which we cover in how international brands enter U.S. retail.
Brand Refinery has sourced and negotiated co-packing relationships across food, beverage, supplement and beauty categories, and we review co-packer agreements before brands sign them. If you are selecting a facility or renegotiating with one, book a call with us. You can see the full scope of our supply chain work on our services page.
Frequently Asked Questions
What is a co-packer?
A co-packer, short for contract packer and also called a co-manufacturer, is a third-party facility that produces, fills or packages a product to a brand's specification and under the brand's label. Co-packers allow consumer brands to manufacture at commercial scale without owning a plant, and they operate either on a tolling basis, where the brand supplies materials and pays a conversion fee, or on a turnkey basis, where the co-packer sources materials and sells finished goods at a per-unit price.
How much does a co-packer cost?
Co-packer pricing is quoted per unit or per run and depends on the product, the process, the packaging format and the volume. The published minimum order quantity is less important than the price curve across volumes, so brands should request pricing at the minimum, at their realistic year-one run size and at the volume a regional retail placement would require. Under a turnkey model the unit price includes the co-packer's procurement margin on ingredients and packaging; under a tolling model the brand buys those inputs directly and pays a lower conversion fee.
What certifications should a co-packer have?
For food and beverage, retailers generally expect the producing facility to hold a GFSI-recognised certification such as SQF, BRCGS or FSSC 22000, a current FDA food facility registration, and any category-specific compliance such as process filings for acidified foods or cGMP compliance for dietary supplements. Cosmetics facilities must be registered under MoCRA. Brands should request the current certificate, the latest audit score and the audit report rather than relying on logos on a website.
What should be in a co-packer contract?
A co-packer contract should define the finished product specification and acceptance criteria, pricing at stated volumes and the triggers for price changes, lead times and scheduling priority, acceptable yield loss, ownership of formulas and artwork, confidentiality and non-compete terms, allocation of recall and liability costs with supporting insurance, audit rights, and termination and transition provisions covering inventory, tooling and technical documentation.
Should you sign an exclusive agreement with a co-packer?
Usually not before a pilot run has been produced and tested in market. Exclusivity can make sense once a facility has invested in equipment or tooling for a brand, but it should be exchanged for concrete commitments such as reserved line capacity, volume-based pricing or a right of first refusal on new formats, and it should carry performance conditions that release the brand if quality, lead times or pricing terms are not met.