Traditionally brands within industries such as food and pharmaceuticals have manufactured their own products. This gave companies the control they need to ensure brand standards and specifications are maintained.
Alongside the brand manufacturers, contract manufacturers produce own-label product for retailers and other higher volume, lower margin suppliers.
This is where it gets interesting! The demands made by the supermarkets for high, consistent quality at low prices have driven the contract manufacturers to invest in the best possible equipment from the development lab through to the factory. This enables them to deliver consistent, scalable quality across the board ensuring that the specification developed in the lab is sustained through to the high volume manufacturing that delivers the economies of scale which help to drive down cost.
To maximise production volume and plant efficiency, contract suppliers manufacture for a range of customers and, as production switches from customer A to customer B, it is vital there is zero cross-contamination. Production lines must be thoroughly cleaned and prepared – but in the shortest possible time.
Downtime costs money!
Meeting these combined objectives has seen the emergence of the Super-Manufacturer, a high efficiency, high quality, low cost manufacturer who can produce a range of product to the tightest specification at remarkably low costs
Challenging the brands
Historically, premium products have been manufactured in-house. The cost of lower volume, in-house manufacture is offset by the guarantee of consistency and the maintenance of brand value.
This is how it used to be!
With the emergence of the Super-Manufacturer, the landscape has changed…
The Super-Manufacturer produces consistent product to the tightest specification – exactly what the brand manufacturers are doing; but the scale of the Super-Manufacturer means they can deliver versatile, validated quality at lower costs than the brands.
If you can’t beat them….
Of course the brands are fighting back. Several leading brand manufacturers are now migrating their production facilities into separate subsidiaries and investing in the best available plant and machinery. Just like the Super-Manufacturers, these new generation brand manufacturers need volume to run efficiently. They too are starting to take on sub-contract manufacture for private label brands.
Read more at Validation & Scalability