Making the Choice: Contract Packager or In-House Packaging?

packaging facility with packed kraft paper pouches

The product packaging process is indispensable and can substantially influence your business operations.

Brands are frequently confronted with an important choice: to delegate their packaging operations to a contract packager (co-packer) or manage it internally. Both options present unique advantages and disadvantages, requiring an in-depth understanding to make an informed decision.

The Pros and Cons of Working with a Contract Packager

These are the pros of working with a contract packager:

  • Expertise and Quality Control: Co-packers offer specialized expertise, producing high-quality packaging that meets industry standards for competitive or niche markets. For instance, contract food packaging companies will have facilities that meet FDA regulations.
  • Cost Effectiveness: For businesses, especially small businesses or those experiencing variable demands, the financial prudence of outsourcing is undeniable. It presents a more cost-effective solution than establishing and maintaining an in-house facility.
  • Scalability: One of the undeniable and remarkable advantages is the ability to scale production up or down. This allows you to swiftly adapt to market demands, seize new opportunities, and manage fluctuations in your production requirements.
  • Focus on Core Competencies: With co-packaging, businesses can focus on their core activities, such as product development, marketing, and sales, instead of getting overwhelmed by the packaging logistics.
  • Access to Better Technology: Contract packaging services companies typically possess the most advanced packaging technologies. This investment could be excessively costly for standalone companies.

These are the cons of working with a contract packager:

  • Reduced Control: Outsourcing entails relinquishing a certain degree of control, which can be a concern for products that require special handling or have specific packaging needs. You should choose a contract packing company that can handle your unique needs.
  • Dependence on an External Company: The potential for delays, quality inconsistencies, or the contract packager encountering business obstacles can directly influence your supply chain. Working with contract packaging services companies with experience and years of expertise is best.
  • Coordination Challenges: Collaborating with an external entity necessitates robust communication. However, this can occasionally result in misinterpretations or postponements. You will need to work with a contract packager who can communicate effectively.

The Pros and Cons of In-House Packaging

These are the pros of in-house packaging:

  • Complete Control: In-house packaging ensures total control over every aspect of the packaging process, including packaging design, packaging materials, and timelines.
  • Seamless Integration: In-house packaging operations can align better with in-house manufacturing, reducing lead times to create a fully packaged product.
  • Long-Term Savings: In-house packaging can be a more economical option for businesses with high-volume production in the long run.
  • Flexibility and Customization: Being in control allows for more flexibility in packaging design and quicker implementation of changes.

These are the cons of in-house packaging:

  • High Initial Investment: In-house packaging setup requires a significant upfront investment in equipment and infrastructure.
  • Resource Intensive: It requires dedicated personnel, physical space, ongoing maintenance, and raw materials. Upgrading to the latest packaging technologies requires continuous investment.
  • Management Complexity: Running a packaging line is complex and takes focus away from other business areas.
  • Difficulty in Scaling: Adjusting to market demands can take much work.

Work with a Contract Packaging Partner that Understands You

Choosing between contract packagers and in-house packaging is a crucial decision influenced by factors like scale, budget, product nature, and business strategy. Contract packagers like T.H.E.M. offers flexibility and expertise, while in-house packaging provides control and integration.

Trust T.H.E.M. to be your contract packager!