Simon Dunn Managing director, Product Chain
There is no question in my mind that a start-up business should, where possible, use an outsourced supplier to get its product off the ground. Contract packers in Europe are excellent and, with advances over the years in private label, they have honed their businesses to offer fantastic supply to would-be brand builders. To my knowledge they understand confidentiality and offer superb research, often inclusive in the price, alongside packaging advice and guidance on supermarket demands for matters such as retail-ready packaging. Outsourced production companies can also offer information on current and up-and-coming label regulations and more often than not distribution into the logistics chain. Western Europe has excess capacity in almost every aspect of fmcg production. The final and most important point is that if the project fails - and many do - you are left with some unsold product that can normally be turned into cash, thus mitigating some of the loss.
Ed Caporn Director of operations, Klein Caporn
Outsourcing production was the only way Klein Caporn was able to launch its brand of premium fresh pasta sauces. With an unproven concept, a heavy capital expenditure would have been a hard sell to investors and an unnecessary risk for us. The main challenge was finding a company that was able to meet our very high standards and that didn't require one tonne minimum runs, but was also able to offer production expertise and the ability to scale up as the business grew. This was not easy, as there are few manufacturers that operate in this space and many were sceptical about spending development time with an unproven business. So we had to find a small manufacturer who was willing to enter into more of a partnership than a strict supplier relationship. As well as avoiding high capital expenditure, outsourcing gives you immediate savings in ingredient purchasing, logistics support, general industry contacts and a partner to bounce ideas off. This comes at a cost, though, as you have to pay their margin.