Co-packing: selling filling and packing capacity by the shift

Paid for hours, formats and shifts

Quotations build from line speed, expected efficiency, crewing and the time a format change takes, then wrap it all in a minimum run charge. Because no product margin exists, an efficiency loss cannot be recovered anywhere else; a line running below its quoted rate simply converts profit into overtime. The commitment is a booked slot on a named line, and a customer arriving late with material still occupies it. Cancellation and rescheduling terms therefore matter more here than in most supply agreements, since the asset being sold cannot be stored.

Format decides the capital, not the product

Investment concentrates in change parts: filling heads for different neck finishes, cartoner tooling, sleeve mandrels, case formats, labeller change kits and the storage that keeps them findable. Depth of format coverage is what wins work, and each addition has to be justified against the volume it actually wins. Suitable demand is lumpy by nature — launches, promotional packs, seasonal formats, multipacks and sample runs a brand's own plant is not configured to handle. Steady high-output work usually returns to the brand's own line once it justifies the tooling. Change parts bought for one account are worth tracking as such, because their reuse across other customers is the whole argument for owning them.

Materials arriving from three directions

Bulk product from the brand, packaging from suppliers the brand nominated, and consumables you buy yourself all have to converge on one shift. Goods-in reconciliation is the operation's control point: quantities counted, damage recorded, shortages raised before the line is crewed rather than after. Overfill consumes brand-owned product you will be asked to account for, and component wastage above the agreed allowance is chargeable. Residual materials at the end of a run — part-used labels, odd cases — need a documented decision, because they cannot be quietly absorbed into your own stock.

Hygiene, allergens and somebody else's audit calendar

Running many brands through shared equipment makes changeover control the centre of the quality system: cleaning between products, allergen separation, line clearance confirming no previous packaging remains, and coding checks so a wrong date or lot never leaves the building. Customers audit against retailer codes of practice as well as their own standards, and that audit calendar belongs to them. Traceability has to link brand-supplied bulk lots to finished pallets, because a withdrawal decision taken by the brand depends entirely on records your plant holds. Scheduling therefore obeys hygiene sequence as much as commercial priority, and a job inserted out of order can cost more in cleaning than it earns.

Where line hours stop scaling

Capacity is finite and perishable, and growth means adding lines, shifts or a building — each a step change rather than a gradual one. Short runs are the quiet killer: a schedule packed with small jobs converts available hours into changeovers and leaves the plant busy and unprofitable. Late artwork approval, incorrect brand-supplied components and last-minute promotional changes are the recurring disruptions. Systems need scheduling by line and format with changeover matrices, lot-level traceability across owners, material reconciliation per job, and labour planning able to flex a shift at short notice. Purchasing is confined to consumables, cleaning materials and spares.

Frequently asked questions

How do we charge for a run that stops because the brand's material was wrong?

Write it into the agreement as standing time at an agreed hourly rate, triggered once the line is crewed and cannot run for reasons outside your control. Without that clause the discussion happens after the event, when the customer's buyer has no budget for it. Pair it with a materials specification and a defined notice period for delivery of brand-supplied components, so the trigger is objective rather than a matter of opinion.

Who is responsible for the finished product's compliance?

The brand owner normally carries responsibility for the product placed on the market, including its composition and its claims, while the packer answers for the operation performed: correct materials used, correct coding, hygiene controls followed, accurate records kept. That division works only where the specification is complete and signed. Ambiguity gathers around artwork, date coding rules and pack quantity declarations, which is exactly where withdrawals begin, so approve those in writing every time.

How do we protect against a customer taking the volume in-house?

Assume it will happen once a product grows large and stable enough to justify their own tooling, and shape the portfolio accordingly. The defensible work is what a brand's own plant cannot easily do: unusual formats, short runs, promotional assembly, allergen-segregated products, seasonal peaks. Investing in format flexibility and quick changeover keeps you in that space, whereas pricing long steady contracts as though they will continue forever leaves the plant exposed when they end.