Tag: CPG

For large consumer packaged goods (CPG) companies considering commercializing an innovation, the instinct is to look inward first. You have your own plants where you want to utilize capacity, long-standing supplier relationships, and decades of experience producing at scale.

When a new product idea surfaces, it feels natural to route it through the existing system.

While most CPG companies have built their facilities for efficiency and volume, they may not be as optimal for innovation and experimentation. And your network, while strong, is usually deep in certain categories and thin or nonexistent in others.

You may know every large player in extrusion and co-extrusion, but no one who knows how to make a horizontal multi-layered product. That’s where co-manufacturing (co-man) searches come in.

A co-man is a third-party partner that produces products on behalf of a brand—offering specialized expertise, flexible capacity, and speed that internal plants often can’t provide.

They fill the gaps your network simply can’t solve.

Why it matters to big CPGs

Most global players already work with co-mans—but usually only the biggest ones built for massive runs. That creates a bottleneck. The pool of new viable partners is small, and those plants aren’t designed for the kind of flexibility or agility that innovation demands.

That’s where smaller co-mans shine. They may never produce your national launch, but they’re the flexible, adaptable partners who help validate new ideas and opportunities. Their ability to handle small runs of unique and differentiated innovations gives R&D and innovation teams the space to test, optimize, and validate before scaling.

Smaller co-mans also tend to be early adopters of new production technologies. They work with emerging brands to prove novel approaches, from packaging to processing. Once those methods are validated with an exciting, high-growth startup, the larger manufacturers begin to adopt them.

By overlooking smaller partners, big CPGs risk missing out on the very innovations that could unlock future growth.

The hidden challenges

Hurdles for large companies with billion-dollar brands look different than for smaller emerging manufacturers. One of the most common pain points is volume. Big CPGs’ internal plants are designed for quality and efficiency at scale, which makes them poorly suited for micro-runs.

Network limitations also create barriers. Big CPG supply chain teams know their category cold. They may have relationships that run deep in bars, baking, or breakfast food, but when the business wants to branch into a new space—say plant-based protein or functional drinks—those core embedded contacts may not have the right expertise.

Building new networks from scratch takes time that innovation pipelines don’t have.

Sourcing adds another layer of complexity. Specialty ingredients, unique packaging formats, or sustainable materials take time, money, and energy to find, especially without existing supplier ties. Even with strong procurement teams, big companies often discover that their infrastructure isn’t designed to move quickly in unfamiliar territory.

Finally, there’s the inertia challenge. Large organizations have the budgets and people to pursue innovation, but carefully honed internal processes can slow the work. Layers of approvals, risk assessments, and capital planning designed to protect the organization can make it difficult to move at the pace that retailers and consumers expect.

Smaller co-mans are built to flex into the spaces where internal systems aren’t optimal, while also providing agility and connections.

How to approach the search

When large CPGs look outside, three practices separate the successful partnerships from the costly detours:

• Design an “innovation testing” criteria that smaller co-mans can meet—something that doesn’t require all the standards of a national launch. Keep it flexible and adaptable.

• Think short-term experiments, not forever relationships. Smaller co-mans don’t want to work through 100-page legal contracts for a one-time run. The same goes for quality assurance needs. Scale back expectations to what’s truly required for them—and you—to be successful.

• Pay for effort, not just throughput. Rethink the scaled production requirement of high volume and efficiency, and instead value the time and effort invested—regardless of total output.

Just like your plants are built for scale, chances are your supply chain teams are also running at full capacity. Searching for the proverbial needle in a haystack co-man is often not the best use of their time.

Final thoughts

The largest CPG companies in the world have built systems that are the envy of the rest of the industry. Their scale, efficiency, and reach keep products on shelves across continents at higher margins.

But those same systems aren’t optimized for everything.

When it comes to testing new ideas, entering unfamiliar categories, or producing in small volumes, the machinery of big plants works against you.

Co-man searches provide a release valve. They give innovation teams options when the corporate engine has too much forward momentum in core categories to explore a quick pivot. They connect companies to specialized expertise, flexible capacity, and networks that don’t exist inside the organization. And they turn test-market ambitions into something real, fast.

In a market that rewards speed and precision, the companies that thrive are the ones that know how to supplement their strengths. They don’t rely on infrastructure alone. They look outward, find the right partners, and use those relationships to keep their pipelines moving and their edge sharp.