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The Cost of Capital and Executional Risk and Exclusivity

While any joint endeavor between co-man/co-packs and brand owners involves some building blocks like transparency, honesty, and trust, the most complex pursuits require an added level of commitment to manage risks appropriately.

Robby Martin, Engineering Specialist, Bush Brothers & Company
Robby Martin, Engineering Specialist, Bush Brothers & Company

I have recently been on a journey to implement a new line of products for our company, and it has involved stretching the capabilities of one of our contract manufacturing/contract packaging (CM&P) partners in many ways. Trying to bring new products to a successful operational startup in a CM&P environment can prove quite challenging. Solving these challenges often involves combining product and ingredient expertise, which our company brings to the table, with processing and equipment expertise, something our CM&P partner brings to the table.

But what do you do when your expertise and the partner’s expertise combined still leave you short on an acceptable way to accomplish the desired result for the new products? Who solves the problems, and who pays for the solution? I believe the answer lies in a combination of topics we’ve discussed in this column previously: Risk and Exclusivity.


Read article   Read Robby Martin's column on managing today's supply chain volatility.


While any joint endeavor involves some building blocks like transparency, honesty, and trust, among others, the most complex pursuits require an added level of commitment to manage risks appropriately. As we have developed solutions to our new product pursuits over the years, we have found that working through solutions together with our partners always provides the best fruit. I often find our mutual trust and relationship status help us pursue things that neither my team nor my partner’s team are entirely sure we have a solution for. The only way we can pursue these ideas is that we trust each other to work out questions ahead of time related to who carries the risk. We then keep that alignment as we go through the development and launch process.

Who carries the risk, and the cost?

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