How to cooperate with contract manufacturer in the food industry

Sascha

Hi entrepreneurs,

I got a question concerning a cooperation with our future contract manufacturer. We are a food startup business and invented a new bakery product for restaurants, bars, etc.

Producing a product in this field requires high skills and a specialized machine park - both things which we don't have.

Therefore we found a producer which is able and willing to produce the product for us in small batches at the beginning. At the moment we are considering which cooperation might be the best for our company. Does anybody have experience in working together with contract manufacturer or can give some advice?

The problem I have is the dependence on the manufacturer and to give away our idea. By contract we can manage that the producer only delivers us with the new product. But for him there are other clients (e.g. Aldi, Lidl and other discounters) which are more important for him when it comes to producing capacities in general and the priority of delivering products.

My idea is now to not only have a producing contract but to give the manufacturer shares of our company so that they have an interest in the success of the product and more focus on it.

What do you think of this idea?

Thanks for your input and help :)

Sascha

Shahriar

Try sourcing the product from small manufacturer. They will comply more with the contract while keeping most of the contract subtle but few things quite strict like the idea of the product.

Hope it helped!