Quoting for food contract manufacturing
Whether you are the contractor or the customer, you must ensure that both parties supply the necessary information during the quoting process so that:
- the contractor can provide a quote for the specific products or services that the customer wants
- the customer understands what they are agreeing to, and what they will receive.
Define the terms and conditions
Discuss the following questions and agree on the answers before a quote is finalised to ensure that everyone understands what the quote will cover.
- If the contractor only does specific runs at certain times, does the customer understand that if orders aren't placed by a specified time they may miss the entire production run for that period?
- Are there minimum run sizes that will affect how or when the customer orders?
- What compliance measures does the contractor have in place?
- Is the contract manufacturer able to substitute ingredients for recipes if the usual suppliers aren't able to provide them or is it essential that only particular ingredients be used?
- Who will own the recipe if a contract manufacturer assists with new product development?
- Who will test the product if it requires testing, and who will pay for the tests?
Seek professional advice
When entering into any type of contract manufacturing agreement, you should seek professional advice. Your solicitor can help you to negotiate and understand an agreement that considers all potential risks, and the obligations of each party. You should ask your solicitor to explain the terms and conditions of any contract before you sign, so you understand what you are agreeing to.
Find out about working with business advisers.
Consider the environment
Sustainable products that have fewer negative environmental impacts reflect positively on your business. As social awareness of environmental sustainability increases, consumers are changing their buying habits. More consumers now expect manufacturers to produce products using methods that don't deplete important resources such as water and energy, or impact the environment through waste.
You may find the impact of environmental events or climate change means your business experiences pressure from the supply chain to implement eco-efficiency strategies. Overseas, major retail chains are already embedding environmental requirements into their supplier contracts, which means your business may lose work and miss opportunities if you don't have 'green' or sustainable systems.