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CPG leaders tell co-packers what it takes to win

ConAgra, Florida’s Natural and Mars Canada veterans reveal their tips on how to establish and sustain successful—and mutually profitable—co-packing partnerships.

Nulogy’s Tham moderated a lively session with McGee (far left) and Kretschmer. Huessner was also present via Skype video.
Nulogy’s Tham moderated a lively session with McGee (far left) and Kretschmer. Huessner was also present via Skype video.

How do leading brands find the right co-packers for their businesses? How do they evaluate, manage and maintain successful long-term relationships? Beyond good intentions, the devil’s in the details of meeting expectations, structuring contracts, sharing information and measuring results. These were among the topics leading luminaries from the consumer packaged goods (CPG) sector discussed at a town hall-style meeting at late February’s CPA 2013 Annual Meeting in Naples, FL.

 
The panel discussion, moderated by Jason Tham, CEO of contract packaging management systems provider Nulogy, featured three panelists: 
 
Mike McGee, senior contract packaging manager with Florida's Natural Growers, has experience in quality assurance, operations and, since 1999, in contract packaging for Florida’s Natural. He has created, negotiated and administered more than 50 juice and beverage co-packing contracts. The company also co-packs for noncompeting beverage brands.
 
Jon Heussner, director of operations/business with ConAgra Foods, oversees roughly 100 contract manufacturers and packagers, and came to his current position by way of positions in project engineering, plant management and contract manufacturing management—including ConAgra’s own co-packing operations.
 
Karl Kretschmer, recently retired senior supply chain manager for Mars Canada, spent decades in finance, marketing, procurement and logistics and supply chain management. He led the company’s 500,000 sq ft national distribution center project and was also an architect of its contract service provider program. 
 
Why do brands seek contract packagers, and what are the benefits? Faster turnaround time, greater flexibility, meeting capacity surges and avoiding financial risk were just some of the reasons panelists gave. Contract packagers provide the speed and flexibility for shorter-run jobs (seasonal spikes, new products/packages, etc.) as well as providing end-of-line flexibility (custom displays, retail-ready packs, etc.). In contrast, brand-owned plants are designed for longer production runs and fewer changeovers.
 
For instance, the lion’s share of Florida’s Natural Growers’ juice business is in higher-end single-strength or “not from concentrate” juices. But for lower-volume from-concentrate juice, shipping concentrate from Florida to California makes no sense, so for that market, McGee noted how that product was given to a co-packer because “it wasn't economically feasible” to own a plant there based on the lower volume of concentrate product.” 
 
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