Navigating the Dairy Landscape: Selecting Your Ideal Dairy Contract Manufacturer


In the dynamic world of dairy, the decision to partner with a contract manufacturer can be a strategic move to streamline operations, expand product lines, and enhance market reach. However, finding a manufacturer that aligns with your business values, quality standards, and production needs requires careful consideration and thorough vetting.

With our many years of experience of introducing brands and businesses with potential contract manufacturers, we understand the intricacies of such partnerships. Here are some of the lessons we’ve learnt from working in dairy in particular. 

 

Clarity 

Before embarking on your search, it is crucial to clearly define your requirements from a potential manufacturer. Consider factors such as the range of products you intend to offer, the volume of production, organic or conventional methods, and the degree of product customisation you need. This clarity will serve as your compass in navigating the vast field of potential manufacturers. 

As well as essential questions around MOQs, certifications, production capabilities and capacity, there are also a number of questions important to consider for dairy products in particular.  

 

Milk sourcing 

An important part of the unit price is the milk price. Therefore, it is important to get a grasp of the manufacturers milk sourcing policy. Do they have their own milk pool or do they buy on the spot market? What kind of standards do they set for their milk pool? Do they provide organic milk? 

How they source the milk will impact how much they pay for it and how volatile their supply is. While price volatility is unavoidable in dairy product manufacturing, it is important to understand how this risk will be shared.  

 

 

Sustainability  

A manufacturer’s milk sourcing strategy also ties into their sustainability credentials. With retailers having to become more conscious of their emissions and now working towards specific targets, dairy is likely to be a core focus area in their quest to become Net Zero. Retailers are increasingly asking manufacturers about how they are becoming more sustainable, with carbon from their suppliers being included in Scope 3 emissions. With the dairy industry accounting for a particularly large proportion of agricultural emissions, working with a manufacturer who is at the forefront of reducing their carbon footprint will be a compelling reason for retailers who may be considering stocking your products.  

 

Packaging  

Another area related to sustainability is packaging. Retailers respond favourably to recycled packaging and techniques to reduce packaging waste, and for some, it is likely to be an essential. However, some manufacturers are more ahead of others when it comes to sustainable packaging. For example, some may typically work with 100% rPET while others may not have this capability. It is important to have a thorough understanding of the packaging materials they typically use and what they have included in their quote so you can ensure you are comparing like-for-like. 

Tray formats and sizes are also very important to consider, especially if you are already supplying a retailer with specific requirements in place. Some manufacturers may be unable to accommodate your needs so it is crucial to be aware of this up front.  

 

 

Export experience  

A new UK Border Target Operating Model (TOM) has applied to goods imported into Great Britain from the EU since 31st January 2024. As part of this, and previous models, there are various requirements for products of animal origin e.g. export health certificates are required for medium risk products, though not for low risk products. it is important for businesses using contract manufacturers in different countries therefore to understand and keep on top of these regulations if export to or from the UK is required.  

Working with a contract manufacturer with an existing supply chain to your desired market and the accompanying knowledge and experience of exporting to this market is a real benefit. 

 

Shelf life  

While it is important to align on shelf-life requirements for any contract manufactured product, it is particularly important to address for dairy where a short shelf life can be prohibitive for some businesses once transport time from a different country is accounted for. You will likely often expect a certain minimum shelf-life and will therefore need to refuse suppliers who are unable to meet these requirements. Not all suppliers are the same i.e. some UHT drinks manufacturers will guarantee a longer shelf life than others. Therefore, it is important to understand this from the outset, particularly where fresh/ESL dairy products are concerned. Additionally, be mindful that shelf-life can vary due to factors like recipes and packaging. While a contract manufacturer may have the capability for a specific shelf-life for one product, it may differ for yours. 

 

Selecting the right dairy contract manufacturer is a complex process that demands diligence, foresight, and a strategic approach. By selecting the right partner, you can forge a relationship that not only meets your production needs but also supports your brand’s reputation for quality and innovation in the marketplace. The right partnership can be a powerful catalyst for growth and success in the ever-evolving dairy industry. 

 With over 10 years’ experience of matching brands and businesses with contract manufacturers, HRA Global have an extensive database of dairy manufacturers. If you’d like to streamline your partner search and take the risk out of selecting the wrong manufacturer, please do get in touch.  

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