Will Madden is the co-founder of Whole Brain Consulting—a robust team of experienced food industry experts that provide a wide range of services, from co-manufacturer sourcing and contract negotiation to R&D, food quality, food safety and supply chain, logistics and operations management services. He’s been a trusted partner to Hyde Park Group for many years, helping commercialize new products for our innovation clients.
We recently interviewed Will on the state of co-manufacturing during and post quarantine. Here’s what he had to say:
What changes has COVID-19 brough to the co-man world?
We are seeing a lot of contract manufacturers prioritizing their larger clients and leaving smaller companies out in the cold. Co-mans are also streamlining products and run sizes for all customers, as well as targeting lower changeovers. In addition, most co-manufacture facilities are not allowing any audits or plant visits.
Has demand for co-manufacturing services increased during the pandemic?
With the massive shift toward preparing meals at home, co-mans who produce grocery and retail products are running day and night to keep up with demand. However, manufacturers that produce for food service are nearly at a standstill.
What types of Clients are seeking co-man help?
Big Food companies, with soaring sales and a retailer distribution advantage, are turning to co-man as they outgrow their private infrastructures. It’s difficult to start first time partnerships with a co-man correctly, since many are already working at max capacity. Right now, projects that would normally take 40 hours are taking more than 80.
Are Clients producing more SKUs or fewer?
Big Food is producing a much larger volume of a reduced number of SKUs, discontinuing many smaller SKUs in response to retailer demand for simplified product lines. Retailers don’t want to reset shelves right now, and are trying to keep the number of in-store employees at a minimum. Companies are concentrating on their core, top-selling products, and most new items are delayed or cancelled due to lack of capacity and inability to conduct line trials.
What is happening to smaller brands? Are they still able to secure a co-man partner?
Unfortunately, many of their contracts are being cancelled. Retailers are eliminating smaller and local brands to streamline their inventories. Consumers are minimizing time in the grocery store and their shopping trips are a race to checkout, eliminating impulse purchases and curtailing browsing and trial of new products. Smaller brands suffer the most. It seems as though every small company in the country is looking for extra capacity at co-manufacturers. Smaller brands who lack distribution should consider the Direct-to-Consumer game right away, because new retailer distribution will take some time to return to pre-COVID standards.
Do you think these changes are here to stay?
The backlog of new products will probably take a year or two to work through the system, but only time will tell.
How should companies think about producing and launching new products right now?
It absolutely can be done, but they will see the most success with alternate approaches to distributions, especially DTC. Build a loyal online following, be there with your portfolio, ready to go to retail when things open up again. DTC helps build a direct link to customers, so when retailers begin seeking out additional SKUs again, you’ll cut through the clutter and show retailers a proven, true value proposition.
Hyde Park Group Food Innovation connects marketplace and consumer insight to extraordinary culinary design and proto-cepting. Working with Whole-Brain-Consulting, we help commercialize ideas and bring them to market. For further information please contact Mary Haderlein or William Madden through LinkedIn.