What to Ask a Co-Packer Before You Sign Anything

Why the questions come before the contract

The questions you ask before you sign are what determine whether the contract actually protects you.

Most founders approach a co-packer negotiation backwards. They receive a contract, review it with an attorney, and negotiate terms they did not understand before they were already on paper. The questions in this resource are designed to be asked before any contract is drafted, so that the answers inform what you negotiate and so that you do not discover the problems after you are already committed.

A co-packer who is difficult to question before a contract is signed will be difficult to work with after. The way a co-packer handles your questions tells you as much about whether you want to work with them as the answers themselves. A co-packer who answers directly, provides specifics without being pushed, and welcomes your diligence is signaling that they run a professional operation. One who evades, deflects, or becomes defensive when asked reasonable business questions is signaling something else.

The questions are organized into four categories: production and operations, quality and compliance, commercial terms, and relationship and continuity. Each category covers a different dimension of risk in the co-packer relationship. Work through all four before you agree to any terms or sign any document. The extra time you spend asking questions before signing is worth far more than the time you will spend resolving problems after.

The pre-signing standard

You should be able to answer every question in this resource before you sign any co-packer agreement. If there are questions you cannot answer because the co-packer has not provided the information, that gap is itself information. A co-packer who will not answer reasonable pre-contract questions is not a co-packer you want to be locked into a contract with.

Production and operations questions

What you need to know about how they actually make your product before you trust them to make it.

Start with capacity and scheduling. What is the co-packer's current production capacity, and what percentage of that capacity is already committed to other clients? How far in advance do you need to schedule a production run? What happens if you need to adjust your order quantity after the schedule is set? What is the lead time from purchase order to delivery? Understanding their capacity constraints before you launch prevents the scenario where your distributor needs product and your co-packer cannot schedule a run for six weeks.

Ask specifically about minimum order quantities and run sizes. What is the smallest run they will produce for your product type? What is the economic minimum that makes a run viable for both parties? How does pricing change at different volume tiers? A co-packer whose minimum run size is 1,000 cases when your launch plan calls for 200-case runs is not the right fit at your stage, regardless of how good the facility is.

Understand their ingredient and raw material sourcing. Do they source ingredients on your behalf or do you supply them? If they source, what happens to the cost if a key ingredient becomes unavailable or the price spikes? Who owns the raw material inventory sitting in their warehouse? What is the process if an ingredient fails a quality check and a production run is delayed?

Production schedule lead time. How far in advance must orders be placed? What flexibility exists for schedule changes?

Minimum run sizes. What is the smallest economically viable production run for your product type?

Ingredient sourcing and ownership. Who sources what, who owns raw materials on-site, and what happens when ingredients are unavailable?

Equipment and line specifications. What equipment will be used for your product, and is it dedicated or shared with other brands?

Quality and compliance questions

Your brand is on the product. Their quality failures become your quality failures.

Ask for their quality control documentation before you accept any verbal assurances about their QC program. What certifications does the facility hold? When were they last audited, and by whom? Can you see the most recent audit report? A co-packer who cannot produce current certification documents and recent audit records either does not have them or does not want you to see them. Both are serious problems.

Understand the QC process specific to your product. Who performs quality checks during production? At what points in the production process are checks conducted? What happens when a quality failure is identified mid-run? What is the process for a recall if a quality issue is discovered after product has shipped? Who bears the cost of a recall, and what are your rights if the co-packer's QC failure causes you a reputational or financial loss?

Clarify regulatory compliance ownership. Who files TTB formula approval and maintains the approved formula on record? Who handles state-level product registrations? If a labeling change triggers a new COLA requirement, who manages that process and who pays for it? In a co-packer relationship, regulatory responsibilities are sometimes unclear. Make them explicit before you sign.

Ask about their documentation practices. Will you receive a Certificate of Analysis for every production run? How long do they retain production records? What documentation is available if you need to trace a production issue back to a specific run or batch? Brands that grow into chain retail and institutional accounts will need this documentation. Make sure the co-packer can provide it.

The question that reveals everything

Ask them to describe the last quality failure they had and how they handled it. A co-packer who says they have never had a quality failure is either very new or not telling the truth. A co-packer who describes a specific failure, explains what caused it, and walks you through how they resolved it and what they changed is demonstrating the kind of operational maturity you want in a production partner.

Commercial terms and relationship questions

The commercial terms determine your financial exposure. The relationship questions determine your risk of disruption.

On commercial terms, the most important questions are about pricing transparency and escalation. How is your production price calculated? What specific cost components make it up? Under what conditions can the co-packer raise prices, and with how much notice? Is there a cost escalation clause in the contract, and if so, is it tied to a specific index or at the co-packer's discretion? A production price that feels competitive today can become unworkable if the co-packer has unlimited discretion to raise it.

Understand the payment terms and their implications for your cash flow. When is payment due relative to production? Is there a deposit required before a run is scheduled? What are the penalties for late payment? What happens to your inventory if you fall behind on payments? These terms have a direct impact on how much working capital you need to maintain to keep your production schedule on track.

Ask about exclusivity and competitive conflicts. Do they currently produce any brands that compete directly with yours in the same category and price tier? Are they willing to sign a non-compete for your specific product type? What is their policy if a competitor approaches them to produce a similar product after you are established as a client? You do not always need exclusivity, but you need to know whether your production partner is also producing for your direct competition.

On relationship continuity, ask about their financial stability and ownership situation. Are they independently owned or part of a larger company? Have there been any ownership changes in the last three years? Are they currently profitable, and are they investing in the facility? A co-packer who is financially distressed, facing an ownership transition, or underinvesting in their facility is a co-packer who may not be there in two years when your brand needs them most.

The bottom line

The questions you ask before signing a co-packer agreement are the most powerful tool you have for protecting your brand, your quality, and your supply chain. Ask all of them. Accept nothing less than direct, specific answers. And treat any reluctance to answer as information about what working with that co-packer will actually be like once you are locked in.

Want a complete co-packer RFP and evaluation toolkit?

The Co-Packer RFP Template gives you a structured document for formally soliciting proposals from multiple co-packers, with all four question categories built in and a scoring framework for side-by-side comparison.