The Ultimate Guide to Choosing a Contract Filling & Packaging Company

• March 25, 2024
• Resources

A contract packager, also known as a contract manufacturer, is a company that provides services that are either not performed by the primary company or are needed to address capacity constraints, cost, or capability limitations.

There is a range of variation among contract manufacturers. Some liquid filling contract manufacturers for consumer-packaged goods (CPG) offer ancillary services such as kitting, shrink wrapping, 3PL, and more. Some contract manufacturers are limited to solely filling, capping, and labeling bottles, jars and tubes; while other contract manufacturers provide turnkey solutions that include product and package design, creating and validating formulations, and procuring the complete bill of materials (BOM) for the finished goods.

When selecting a contract manufacturer, the company must assess its internal needs, as well as the certifications that may be required for its product composition and end use by the customer or consumer.  For example, in the food services, medical device, over-the-counter and nutraceutical sectors, industry specific certifications and third-party audits may be mandatory. Such qualifications intersect with cGMP guidelines and the contract manufacturer’s Quality Management System (QMS). Contract filling and packaging companies, such as U.S. Continental, place a high priority on continual improvement relative to quality enhancements by following ISO standards, updating their QMS annually, and training team members per documented process and procedures to ensure adherence to internal and external quality guidelines.

How does a company start the process of evaluating a contract filling and packaging company that is right for them?

Quality Standards, Certifications, and Regulatory Compliance

Start by confirming industry certifications, compliance, regulatory and labeling requirements. Although many contract manufacturers will provide guidance, it is important that the brand owner also be familiar with state and federal guidelines. When shipping product to international markets, each country will have its own import requirements. One resource that may prove helpful when conducting information gathering is to contact one of the leading associations for the industry for your brand(s). Leading associations will often provide guidance or targeted resources to address your specific needs. Another source for international label and compliance guidance is Testing, Inspection & Certification companies such as SGS, Intertek, or Bureau Veritas.

Production Capacity and Volume

Next, find a contract manufacturer that has the capacity to meet your demand. Some contract manufacturers have a minimum order quantity (MOQ) of 2,000 units while others may start at 25,000 units. The small scale contract manufacturers cater to brands that are in early start-up phase, or mature brands in niche segments that have minimal distribution or lesser turns, or for companies that seek to keep minimal inventory on-hand. For products that are sold at higher turns in retail or with large direct to consumer turnover, utilizing a large scale manufacturer may be essential to ensure timely shipments to your customers.

Level of Service

After identifying the size of the company, evaluate the level of service needed.  A TOLL provider (where your company supplied formula and all materials) aligns well for companies that have a broad range of established internal resources, whereas a turnkey contract filling and packaging manufacturer is well suited for companies that do not have the internal resources for product design, formulating, procurement, warehousing, and more.

If your company’s need is for TOLL, meaning that your organization is self-sufficient regarding procurement, supply chain management, warehousing to store raw materials and components, formulators for products that have chemical ingredients, etc. than you are seeking a contract filler and packager that offers modest levels of blending or batching, and a primary focus on contract filling of liquids only.

If your needs, however, are for a robust range of services, then you are seeking a turnkey provider that not only offers contract filling services of liquids, and packaging, but additionally the full support of product and packaging design, procurement, warehousing, formulating, batching, and more. Some contract filling companies also offer Kitting. Kitting is when a variety of stand alone items are combined into one package, typically in a sealed bag, or chipbox, or another container. Companies like U.S. Continental offer both TOLL and turnkey manufacturing solutions for contract filling, packaging, and kitting.

Cost and Budget

The next criteria to evaluate is budget. Some contract manufacturers have steep startup costs and higher margins, whereas others work on lesser overhead and streamlined margins. Each has their advantages. The high-cost provider typically offers added-value services that off-set the sticker shock of the higher price point. The lower budget manufacturer often relies on the brand owner to ensure that all compliance and regulatory requirements are properly adhered to – and may be limited relative to expedites, fast turnaround, sourcing, product development, or support with outside agencies. To ensure that you are receiving the cost that is best aligned with your needs, qualify your Request for Quote (RFQ) with comprehensive scope-of-work details. Doing so will help ensure that each quote you receive is aligned with the specific services you need.

Delivery Schedule

For some brands, scheduling is done far in advance, meaning that quick turn times may not needed. Advance planning in some industries generates purchase orders many months ahead of delivery dates. For other industries or in certain conditions, unplanned orders may be required, which triggers the need for turnaround times that exceed industry standards. Be sure to clearly state the turnaround time, and specific due date for the order to be shipped or picked up on the RFQ (and include on the subsequent purchase order).

Location / Freight Logistics

For light weight items, location is less critical. Small items may be air shipped when needed without significant increase in cost of good. Heavy and large cubic feet items may have logistic cost management factors to be considered. With that in mind, the location of the contract manufacturer may be a critical success factor in your selection of a liquid filling contract manufacturing vendor. It is essential that you evaluate the cost and timing to ship products from the contract filler to the destination. Some contract manufacturers, such as U.S. Continental, are equipped to support 3PL (third-party logistic) requirements and can assist in managing your post-production warehouse and shipping needs.