Nowadays Co-packing is a much used and well integrated concept in all manner of different industries. Yet it’s still a relatively young industrial activity, which has managed to become very diverse, but certainly also very mature, in its short development phase. The following description provides an overview of Co-packing’s diversity of possibilities, using Co-packing’s development in the Netherlands. This could simplify the search for the correct co-pack partner.
1. Jobbing
The first co-pack activities in the Netherlands were created at the end of the nineteen sixties and the start of the nineteen seventies. With the arrival of the modern distribution (supermarkets), selling single items over the counter changed to self-service, with the need to bundle several units. As this didn’t instantly involve large numbers, this didn’t particularly fit in with the structure and possibilities offered by production companies, which meant there was a need for external support. Various entrepreneurs saw this as their perfect opportunity and started a co-pack activity. This therefore generally involved secondary types of packaging which were mainly done manually. Plenty of manual work and flexibility were the characteristics of this start phase. The sector had grown into around 250-300 players by the nineteen eighties, which all offered co-pack activities. This also included various social workplaces. The first transport companies also started offering this as value added logistics at the same time.
2. Co-packing
The sector underwent an important development in the mid nineteen eighties. Various traditional co-packers increased the added value by also offering the primary packaging step as a service. This created a great deal of interest from the larger A brand manufacturers, as a result of the enormous flexibility the co-packing sector could provide them with. This did, however, go paired with a great deal of hesitation, as these manufacturers would also be handing over the brand name’s interests and risks to external parties. This is why the packaging of naked products (primary packaging) was only offered by a very limited number of parties during the early years. The co-pack sector customers continued to mainly use the sector for temporary capacity support during short-term internal capacity problems, for promotional packaging and with fast new market introductions. This development also led to increased specialisation per product segment.
3. Co-making
Co-making was also launched in addition to co-packing in the early nineteen nineties. This meant co-packers weren’t purely used for packaging the product, but also did part of the actual production for the customer; for example blending and mixing. This was still all done on location by the co-packer and largely as back-up capacity, or rather temporary support, alongside the own activities.
4. Co-manufacturing
We saw another important change in what the large A brand players were thinking at the end of the nineteen nineties. Production was no longer seen as a core activity. Companies wanted to strategically and structurally contract production out to specialists and production facilities were sold to specialists, or rather co-manufacturers. This change meant that some traditional co-packers developed into production specialists, whilst the private label manufacturers also started producing for the A brands.
Today we still see the historic development in all sections of the sector. Each segment still exists and functions under the co-packing or contract packaging term. The existing companies within this sector are therefore often active within one of the historic segments, plus they often also specialise in a special product segment like: food, chemicals, pharmaceutical or non-food, etc. The sector therefore offers something for everyone’s needs from a strongly developed specialism, which means contracting out is often better and cheaper than doing it yourself, in addition to being an attractive alternative. Modern active companies know how to make full use of the opportunities and possibilities offered by this sector.