Unlocking the Power of Co-manufacturing
Choosing to out-source production to a third-party co-manufacturer is a strategic play that can be crucial for any size of business, in any stage of their journey.
Yet it is a move that is often overlooked or underrated, with the media often focusing on more “glamourous” growth strategies, such as acquisitions, licensing and investment into new factories.
At HRA we have helped a number of brands across a wide range of categories through the process of finding & launching with a co-manufacturer. From our experience each business has their own bespoke reasoning and nuance for why they are looking for a co-man.
However, the main reason/s leading to brands searching for a co-manufacturer tend to sit under at least one of the following:
- Business is experiencing capability constraints with current manufacturing set-up i.e. brand has no manufacturing assets of their own, brand is looking to launch NPD or EPD but don’t want to invest in the CapEx required
- Business is experiencing capacity constraints with current manufacturing set-up i.e. brands current manufacturer is at full capacity leaving no room for brand growth
- Business is looking to grow through launching into new categories, customers and/or geographies i.e. brand is looking to launch into a new country
- Business is looking to establish cost-efficiencies within the supply chain i.e. brand is looking to onshore product to reduce logistic costs
- Business is looking to de-risk their supply chain i.e. brand needs a contingency option in case current supply is impacted by unforeseen issues (e.g. factory fire etc)
Below we have outlined real life case studies where we have supported brands, each with their own aims and pain points, navigate the co-man-sphere.
CASE STUDY 1:
Category: Dairy drinks
Client aim: To unlock new customers by expanding product offering & to build contingency in the supply chain
Client type: Experienced user of co-manufacturers, with no manufacturing assets of their own
HRA’s role: We secured the most relevant co-manufacturer through a data-driven evaluation of pricing, supply chain resilience, and scalability. Our work not only included securing the contract and pricing negotiation, we also managed the recipe development stages and ensured a smooth transition to market.
Project results: New product was launched from the selected co-man within 3-months, expanding the brand’s access to distribution channels and customers, and providing contingency in supply.
________________________________________________________________________________________
CASE STUDY 2:
Category: Spoonable dairy products
Client aim: To relieve capacity constraints at current factory and to provide contingency in supply
Client type: First time user of co-manufacturer for this product
HRA’s role: Through outreach to our extensive database we were able to collate a long-list of potential partners. We conducted interviews to understand which of the long-list suited the clients partner criteria, delving into capacity, capability and chemistry, as well as facilitating commercial discussions (i.e. costs).
Project results: Within just one month, we successfully identified and introduced the client to the most suitable partner, significantly increasing the likelihood of a timely product launch aligned with the client’s ideal timeframe.
________________________________________________________________________________________
There is no, “one size fits all” solution when it comes to selecting a partner. We understand that each business comes with their own intricacies, whether that’s the need for bespoke moulds, a specific certification, a unique processing technique, I could go on.
But choosing the right partner isn’t just a tick box exercise, it requires a deep inward- and outward- looking evaluation that considers not just current needs, but future ambitions to.
From our experience, the most successful partnerships, are not purely executional. Brands that take a collaborative approach to the partnership often reap the rewards, with the co-man becoming an extension of the team, feeding into NPD & EDP, packaging development and sometimes even go-to-market. Emphasising the importance of finding a partner who not only meets the capability and capacity requirements, but also aligns on chemistry and shared values.
If any of the above resonates with you, at whatever stage of the journey you may be, please get in touch. Whether you’re a brand, or a manufacturer, we would love to discuss how we can help you unlock the power of co-manufacturing. Drop us an email on info@hra-global.com.
