What is Co-Packing and Private labeling?

What is Co-Packing and Private labeling?



Our simple answer – Adding more value to your product at lower cost!!!

Have your ever analyzed the impact of packaging on the consumer’s purchase decision? Or have you ever thought of the importance of appearance of a product’s package?

Many product providers think that the content of the product and its performance is far more important than how the outer package is designed. However, business experts believe otherwise. Experts believe that Packaging is a powerful tool and can influence the success or failure of a company’s sale. It is for this reason that many companies conduct research on designs, color scheme and types of product packaging that is most attractive, informative and facilitates purchase decision of consumers. Today’s consumers are also greeted with innovative options that run the spectrum from organic packaging to designs that actually assist in the process of food preparation.

Since packaging plays such an important role in the preservation and marketability of a product, many companies seek assistance from experts in form of contract packaging or co-packaging partners. While contract manufacturing and packaging are also applicable in multiple other industries, it holds a special significance in food and beverage industry and health and pharmaceutical domain. Co-packers are usually companies who manufacture as well as package food items and similar products for their clients based on the specifications provided by the customer.

Broadly there are two types of Packaging

Primary Packaging: It is when the packaging comes in direct contact with the product. This becomes significantly important when dealing in food and healthcare industry. It is thus imperative that the co-packer has necessary licenses and certifications to complete the process.

Secondary Packaging: It usually refers to the second layer of packaging or bundling of pre-packaged products. It is used more for bundling and display purposes.

Co-packing involves outsourcing the manufacturers packaging requirement and to make the product shelf – ready.
However, in many cases it includes outsourcing the entire process right from ingredient sourcing to manufacturing, packing, labelling and distribution. Business owners usually go for a co-packer when either they have exhausted their current manufacturing capacity or they do not wish to make high capital investments in setting up the facilities. When a company utilizes contract packing service, not only the capital cost of machineries and facilities is drastically reduced, they save on labor and energy costs too. Additionally, having a co-packer will significantly reduce turnaround time in getting a product to market and allocating enough time for quality assurance and validation.

In today’s time, the market offers incalculable choices in packaging and labeling needs. Contract packaging not only guarantees meeting all specifications and requirements, it also adds more value by assisting in product development. Companies relying on contract packagers are flexible and adapt to the market changes faster. Many co-packers will go beyond the simple packing task, by offering other services like design execution, warehousing and distribution. Experienced co-packer will have infrastructure, capacity and an expert team to do the job right.

While packaging services adds value to the product, businesses always hunt for different ways and alternatives to save money. Many companies especially dealing in food and drug stores go for private labeling service for their products. Private label products are the ones that are manufactured or produced by one company but sold by a different retailer or supplier under their own brand name.

Private labels, also sometimes known as “Store brands”, are currently on a rise. This practice is spread across super markets, drug store chains and mass merchandisers. There are numerous private labelled items from household to food to specialty items and clothing that are giving tough competition to the biggies. In recent times, the super market private labels have taken a leap from traditional products such as milk and canned products to beauty products, paper products such as diapers and soft drinks too. Private labeling has also contributed in upward trend sales for categories like beer and clothing. Even small and medium sized manufacturers from varied industries have new opportunities to explore with private labels.

So let’s look at why private labelling is such a favorite?

A simple reason is it offers the customers a less expensive alternative and also gives small manufacturers ways to sustain their business against the big giants. Quite a win-win situation!

Private labelling allows companies to create their own image and marketing identity and thereby building a brand for their business. The packaging and labelling services can be tailored to accommodate company’s logo, product descriptions, contact information and more. The amount of customization it provides, gives the company’s a competitive advantage. Additionally, with private labelling, the company also gets higher control on pricing, sales and distribution. It is the company owners who call the shots. Lastly, getting private labelling services at cheaper prices improves the revenues drastically and thus it makes a good business sense.