Steps to Success: How to Choose a Contract Manufacturing Partner
• Every company starts with the goal of growing larger and more successful. No matter what field you’re in, scaling means bringing more people into the fold, as well as reaching out to strategic partners to help you in areas where you have no capacity or expertise. • In the beverage industry, this means partnering with a contract manufacturer. Moving from an operational structure where you make your own product to one where you contract it out is a daunting task, but it’s also one that’s unavoidable if you’re going to continue to grow.
Why Do I Need a Manufacturing Partner? • For those who are hesitant to reach out to a contract manufacturer, know that your company is not alone in taking this step. All small beverage companies run into the same barrier sooner or later. • At a certain point, small companies begin experiencing growing pains. They operate under cash constraints and have limited product development options.
A Strategic Decision • Next to choosing investors, deciding which manufacturer you will work with is one of the most important decisions for your company. This should be a boardlevel decision and it’s important to do your homework in advance. Once your company decides on a manufacturer, changing this decision in the future will an expensive, time-consuming and potentially brand-damaging undertaking. • What can go wrong if you choose the wrong manufacturer? Simply put: everything can go wrong.
Set-It-and-Forget-It Manufacturing • Next to choosing investors, deciding which manufacturer you will work with is one of the most important decisions for your company. This should be a boardlevel decision and it’s important to do your homework in advance. Once your company decides on a manufacturer, changing this decision in the future will an expensive, time-consuming and potentially brand-damaging undertaking. • What can go wrong if you choose the wrong manufacturer? Simply put: everything can go wrong.
Take a Look at Their Team Is the company composed of one compelling salesperson/founder and a team of medium-quality employees? An ideal manufacturer will have an entire team that’s full of knowledgeable competent people who are strong and well-respected in the company. How long have the employees been with the company?
Look at the Total Landed Cost • When you’re pricing various manufacturers, know that the total cost will have many components. It will include things such as the manufacturing fee, ingredients, packaging/materials, yield loss, transportation and storage. • In order to compare apples to apples from one manufacturer to the next, you need a simple contract that is inclusive of all costs. Ensure that your manufacturing fee is all-inclusive and that nothing else can/will be added on later. Your yield loss should allow for around 3% on ingredients and a percent or two on packaging materials. Also ensure that the total landed cost includes procurement, storage, quality assurance and waste disposal.
Entering into a contract with a manufacturer is like a marriage—it’s a longterm, multiyear, strategic relationship. After you do your homework and look at the numbers, much of your choice will be based on an instinctive gut feeling. You need to like them and you must be able to trust them.
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When
From: Wednesday, July 26, 2017 at 11:00 am.
Where
South San Francisco Conference Center
To: Thursday, July 27, 2017 at 6:00 pm (PDT).
255 South Airport Boulevard, South San Francisco, CA 94080, United States - View Map
Event Producer / Organizer
Beverage Trade Network (BTN) is a leading online marketing and B2B networking platform servicing suppliers, buyers and beverage professionals in the global beverage industry. BTN provides a selection of sourcing solutions for importers and distributors as well as an extensive range of marketing and distribution services for international suppliers. BTN also organizes a line-up of B2B trade shows around the world like USA Trade Tasting and Australia Trade Tasting.