Globetrotting CPA Sets Sights on PACK EXPO Las Vegas

After a busy spring, including exhibiting at interpack in Germany, the Contract Packaging Association (CPA) will be at PACK EXPO Las Vegas again in September at the Association Partner Pavilion. Show attendees are always seeking CPA member services, so the association showcases its capabilities with towers displaying member companies’ packaged and manufactured products. Executive Director Ron Puvak will speak at the PACK EXPO Forum and Industry Speaks stages, covering topics of interest to anyone involved in external manufacturing.

Also at the show, the association will also be sharing new data from the 2023 CPA State of the

No thanks—I’ll build my own manufacturing and packaging facility

Some emerging brands might believe their product is so unique that it makes sense to use capital to build their own manufacturing and packaging facility, bypassing CM/CPs. Those on the panel say be careful what you get into, since manufacturing operations are more complicated than they seem on the surface.

“If you’re considering manufacturing and packaging on your own, just understand that you will likely be managing two businesses at once: your manufacturing/packaging business, and the company you intended to start up,” said Pete Brennan, VP of Innovation at Mattson “Work with a group to be able to find the right potential CM/CP before you start investing the dollars in your own equipment, unless [your product] is something that’s absolutely new to this world, which is a small percentage of the overall innovation that’s making it to market.”

Woods noted that contract manufacturing and packaging has evolved over the past decade, and can handle the speedy pivots needed as the industry grows related to equipment and facilities—something a young brand might not have the money to do after their initial plant investment.

“It’s a lot of capital intensity [to invest in your own facility] and there’s a lot of complexity. The CM/CP industry is growing at a greater than 10% rate. So maybe 10 years ago, the answer would have been, ‘maybe you can do this yourself,’” Woods said. “But there’s a lot of different options now, and a lot of capabilities and competencies that you could leverage. Then you can stick your capital into building your brand and into marketing and other areas outside of building a manufacturing base.”

If a startup CPG truly has something unique to manufacture, Krombeen advised spending a fraction of the cost for a new facility on specialty equipment instead, and let a CM/CP handle the operation of it.

“Instead of investing all that money to get your plant moving, go to a co-manufacturer and say you have a new process. Let them know you can buy a $40,000 piece of equipment that can make or package that certain shape or size you have in your product. If you do that, the investment will be a lot less. And if that equipment is going to cost $150,000, maybe there’s a partnership in there,” Krombeen noted, “and they can give it back to you in tolling or some other way and you’ll earn it back over time as a shared expense.”

Valenti-Jordan added, “at the end of the day, your CM/CP doesn’t make any money for commercializing and getting the first of a product

Industry Report, which will be released late summer or early fall. The biennial report has been a leading data source on the contract packaging and manufacturing industry since 2008. A preview of this valuable report is available for download for free, and the whole report is available for purchase, at pwgo.to/7956.

CPA will then return to Natural Products Expo East in Philadelphia, Sept. 20 to 23. This show, along with its counterpart Expo West, always attracts hundreds of visitors to the CPA booth with new and established brands seeking information about how to bring their products to market. Keep up with all CPA events at pwgo.to/7957 PW out, they make money because they can run your product at a great quality level all day long, and then shut it down and move on to the next company’s product. You get value out of a dedicated partner that’s looking to make your product in a sellable, cost-effective way, because you can leverage economies of scale without having to build [a plant] yourself.”

What if a CM/CP gives away my trade secrets?

Food and beverage CPGs—like any other industry—rely on having an edge over the competition. Therefore, an emerging brand with a closely guarded formula or especially sustainable package design, for example, might be reluctant to allow an outside party like a contract manufacturer into their inner information circle. However, those on the panel say it would be unethical and not very profitable to sell those secrets, not to mention the damage to a CM/CP’s reputation.

“The food industry is small, and we all know each other,” said Valenti-Jordan. “If you behave unethically, we all know it. And honestly, no emerging brand is worth enough to sacrifice a decades-old reputation to steal somebody’s formula and make a thing out of it. Even if they were successful, the value to [the CM/CP] is already lost, and they’re going to lose probably 40% of their business from doing something like that.”

Krombeen also mentioned that once a startup and CM/CP have partnered, it’s the contract manufacturer’s responsibility to guard anything confidential. “A co-manufacturer and packager is there to make and package products. They’ll take that recipe and own it as much as [an emerging brand] will let them own it, securing the raw materials and everything else. They just want to make that product, move on to the next one, and keep going.”

How do I pick a CM/CP when there are so many out there?

The number of contract manufacturers available can be overwhelming to an early-stage brand just getting started in the industry. To save time, the panelists recommended the Contract Packaging Association (CPA) which has updated lists and can help steer a startup toward the best fit for their particular product. Conversely, Google is not the place to start searching, according to Valenti-Jordan.

“Every list that I’ve ever run across [on Google] is out of date within about six months. I would encourage networking and finding people who know people in the industry for recommendations. It’s going to be much more effective to find a CM/CP that way than consulting a giant list online.” —Michael

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