Co-packing brings benefits throughout the value chain, for producers and brand owners, retailers and consumers. Tetra Recart® plays the role of matchmaker in the co-packing space, creating new business opportunities for its partners in this dynamic and growing area.
Co-packing is experiencing rapid growth in the food industry, expected to double in size as increasing numbers of actors in the sector see the advantages it brings. Also known as contract packing or contract manufacturing, the co-packing concept creates flexibility and opportunities for product innovation for retailers and brand owners, while enabling producers to get maximum return on their investments in capital equipment.
Tetra Recart, which was launched by food packaging and processing giant Tetra Pak in 2003, provides an alternative to cans and glass jars that has proven as popular with producers and retailers as it has with consumers. Its retortable paper-based package for products including tomato and vegetable-based products, soups, sauces and pet food are easy to open and handle and have a strong environmental profile as they are made with sustainably produced FSC™ marked material and are recyclable.
With manufacturing on four continents and more than 150 brands in more than 50 markets, Tetra Recart has the global presence, the experience, the expertise and the contacts to enable actors throughout the value chain to capitalise on the co-packing opportunities in the market globally. "We are an enabler, a matchmaker," says Thomas Leth, Retail Manager at Tetra Recart. "We can offer retailers or brand owners and producers new business ideas, and then give them the contacts and expertise to follow through. If we can help them grow and expand their business, then we are happy because we are also growing our business."
Peter Arvidsson, Director Sales & Technical Support at Tetra Recart, says that co-packing has multiple benefits for producers who manufacture and package food for clients such as retailers and other brand owners. "Producers who invest in filling lines and co-pack for several brands and retailers can build up their stability," he says. "For them the bottom line is that they need to utilise their equipment, and co-packing helps them get maximum return on it."
There are also logistical benefits to co-packing with Tetra Recart. For example, nine times as many unfilled Tetra Recart blanks will fit into one truck as will empty cans. "With less space needed for transport, there are great cost savings to be made," says Arvidsson.
Another producer benefit of co-packing with Tetra Recart cartons is differentiation. "Those producers that have a Tetra Recart line have an edge in the marketplace as a co-packer, versus the one that has just one package format, such as cans," says Arvidsson.
For brand owners and retailers, the advantages of co-packing with Tetra Recart packaging solutions are also many. A major one is flexibility. "You can quickly move into new packaging concepts, into new products, without making major capital investments," says Leth. "Normally with an investment it can take up to a year before you start seeing the product on the shelves. But with co-packing you can move quickly, test new concepts, and then decide later if you want to go into self manufacturing or not."
Here Tetra Recart can provide expertise and support by testing new recipes and concepts at its Food Lab, where small batches of new products can be evaluated before being launched on the market after as little as a couple of months.
Co-packing with the package format also allows retailers and brand owners opportunities for more innovation in commoditized products like vegetables, beans and tomatoes. "You get new ways to introduce new products to the marketplace that are difficult to do with an old-fashioned package such as a can," says Leth. "Consumers get something new and fresh in an innovative package. Co-packing provides a way for brand owners and retailers to revitalise categories in a way they have not been able to do before."
Retailers also benefit from the same logistical benefits as producers, with nearly a fifth more packages fitting on a pallet compared to cans, as well as space savings on the supermarket shelf and reduced handling time on the shop floor. "It is more money in the pocket because you can reduce costs quite dramatically," says Leth.
The co-packing market is showing strong growth. Co-packing has in recent years expanded to become about half of Tetra Recart's business today, while reports predict that co-packing in Europe as a whole will double in size by 2020. "We see it as a continually growing market with lots of new opportunities," says Arvidsson. "We have started to see some good traction as major retailers report successes, and then the other retailers see this success and want in. The market has reached a critical mass, and there is a big interest."
Leth says that brand owners and retailers that are already on board are expanding from one category of co-packed products into two, and from two categories into three. "And you see co-packers investing from one line into a second one. So the retailers and the producers are seeing the traction in it."
For those interested in the possibilities presented by co-packing, but unsure of how to take the first step, Tetra Recart is there to help. "We can see then opportunities and then support with our expertise," says Arvidsson. "We have a lot of experience of what is happening around the globe, what is successful and what is not. We can help all parts of the value chain to make a success of co-packing."