KANSAS CITY, Mo. – Business strategy sessions are always popular during the American Association of Meat Processors (AAMP) Annual Convention and the 2018 event, held this past July, was no exception. A panel of processors shared stories of their companies’ journeys from small mom-and-pop shops to manufacturers of meat products that are sold regionally and nationally and how their roles as co-packers has fueled their success.
Chad Lottman, who owns and operates Diller, Nebraska-based C&C Processing said putting another company’s name on product from his plant was not a sticking point for him.
“I’m comfortable concentrating on production,” he said, adding that he takes pride in seeing his co-packing partners’ brands that his company processed out on the market, from coast to coast. “I have no problem putting someone else’s name on our products, but most of our private label has come to us with their own products,” said Lottman, who is also serving as the president of AAMP in the coming year. “We’re really doing more co-packing than we are private labeling.”
Co-packing has become a business focus even at the expense of promoting his company’s namesake products.
“As much as I’d like to see our name spread out a little further, we’re focused on the production side of it and we don’t push our own brand much at all.”
Fritz Usinger is the fourth-generation owner of Milwaukee-based Fred Usinger Inc., a 138-year-old sausage company founded by his great-grandfather. He said products made under his family’s name brand have always made up the biggest part of the company’s sales, but processing for other firms is growing. Usinger said most of the private label and co-packing business his company does is for specialty products for customers who might want to make production claims, such as grass-fed, certified humane, antibiotic-free or certified organic. Usinger’s co-packing production makes up about 35 percent of its business today.
Usinger said working with co-packing partners usually means working with them to develop a formula or being given a recipe to follow with the goal of keeping Usinger recipes exclusive to that brand of sausages. “Obviously my brand is more valuable to me than the co-packer I work for,” said Usinger. He said the customers his company co-packs for get the same attention to quality and service that the company has become famous for, “but my spices and that sort of thing, I like to protect.”
Joe Maas, co-owner and president of JTM Food Group, Harrison, Ohio, related a story of a colleague in the sausage business who stubbornly refused to sell his product if it meant putting another company’s label on it even though the other company was several towns outside of his market. Maas, whose family-owned company processes fully cooked meat products for foodservice customers, adamantly tried to talk him out of the decision for the good and growth of his business. He told him, “What are you talking about? Are you crazy? Absolutely put his name on it. What do you care? All you want to do is get this stuff made and sold,” he said.
Maas said it isn’t uncommon for his plant to run product for a co-packing partner until the order is complete and, for any remaining product in that batch, switch to his company’s label.
When it comes to R&D of products for co-packing partners, the panelists varied on their policies and practices.
“I’ll private label my product for you or if you tell me you like my product but wish it was hotter, spicier or had a little more cayenne in it or whatever, I will be glad to develop that for you and I always have,” said Maas. He added that he will also work with customers to duplicate other products. “If you like the chili down the street and you would like me to copy that, I will do that; I have done that.”
It isn’t uncommon for Maas to be approached by someone with a formulation for a product who wants to sell it to him. But that approach isn’t a good strategy for him.
“I’m not interested in buying recipes that I have to market, sell and ship,” he said. “I’m tickled to death to make your product for you, to develop it for you, because I have a little bit of a monopoly at that point. You can’t exactly buy it from someone else,” he said.
Usinger said he too, will work to develop recipes for established meat companies, but he sometimes takes a different approach to newcomers to the industry. In certain cases, it makes more business sense for him to refer a customer to a spice company that might have a recipe for a product they are seeking. In those cases, Usinger will contact the spice company and have the blend sent to his plant and then process the product. “That way I don’t waste a lot of time developing something for an unqualified customer.”
AAMP’s 2019 convention and expo will be held in Mobile, Alabama, July 25-27.