Palm | Kelapa Sawit

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Co-packing is a comprehensive term that covers multiple activities and each co-packer has its own areas of expertise

After you have a food product concept and have written a fairly extensive business plan, it is time to consider the manufacturing of the food product. It is highly recommended that an entrepreneur first use the co-packing option. Co-packing, also known as contract manufacturing, is when you go to an existing food processor and have them make the food product for you. 

1. It minimizes your financial risk
• A small processing plant can cost over $100,000 and building a processing facility to support an untested food concept is a financial risk you don’t need. 
• Your money and time is better spent selling and marketing the product. 
2. Government regulations are very long and hard to understand for the new person to the business
• There are many government regulations you must know about before getting into the business. 
• There are regulations governing the facilities, processing, labeling (to include 5 parts of all labels, nutritional labeling and allergen labeling), food safety plans and naming of the product (standards of identity).
• For an entrepreneur, this is just too much to handle when the success of new products lie in the sales and marketing of your product. There is just not much money to be made in manufacturing.