Follow the money

The big are getting bigger as co-packers rise and converge on an infusion of investment dollars.

Sperber
Sperber

As big brands consolidate, their contract service continue to follow suit.

This past October, personal care outsource contractor KDC/Knowlton Development Corp., based in Longueuil, Québec, acquired California-based Cosmetic Technologies and New York-based Kolmar. Less than a year ago the company acquired ChemAid of New-Jersey — all working the personal care sector, and all financed by KDC’s parent company NOVACAP. It’s just one case of a leading co-packer — and by “co-packer” I include packaging as well as upstream and downstream services, too — realizing it needs to expand its national and international footprint in order to grow with P&G and its other leading global brand-maker customers.

In the food-o-sphere, Downers Grove, IL-based Hearthside Food Solutions, the continent’s largest independent bakery and contract food-maker, acquired a former PowerBar plant in Boise, Idaho from a subsidiary of Post Holdings; and acquired Netherlands-based VSI, Europe’s largest producer of sports/energy bars thanks to parent Goldman Sachs and Vestar Capital Partners.

In her November 2015 Cost Cutter column for Contract Packaging magazine, — Part Two of her analysis of co-pack industry maturation — Lisa Shambro cites these two deep-pocketed suppliers and others. Likewise, the upcoming (in December 2016) Personal Best Q&A, Randy Shaw, president of Assemblies Unlimited, is an example of how a one-man shop in 1993 has stood the test of time to become a coast-to-coast turnkey service provider today.

KIK Custom Products, too, has grown since 1993, organically and through M&A activity, from a single bleach plant to a global contractor with $1.8 in sales today in service to more than 70 brand marketers. is growth came with a willingness to cede some control; KIK’s parent CI Capital Partners has sold the company another Big Money investor, Centerbridge Partners.
As the outsourcing supply chain expands, consolidates and globalizes, perhaps the best way to gauge the operational fit and footprint of your outsourcing partners is, to borrow a phrase: Follow the money.

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