I’m Mark Gallo and I’m a beverage enthusiast. I have worked in beverage my entire career. Got started working for an Anheuser Busch wholesaler in college and after graduating, I worked shy of 11 years in field marketing and sales for the brewery directly. I then had a short stint at Heineken. For the past 3 years, I have worked at Nor-Cal Beverage Co, a 3^rd generation family owned copacker as self-described “Beverage Orchestrator” on the contract manufacturing business development team. 

Nor-Cal is a large scale copacker producing close to 80 million cases of teas, lemonades, juices, isotonic drinks (sports beverages), sparkling waters and energy drinks. We operate out of 2 facilities–1 in West Sacramento and 1 in Anaheim. Amongst both locations, we operate 10+ lines.

In addition to production, we offer storage services (ambient, refrigerated and frozen) for raw materials, ingredients and finished goods. Our focus has been to build long term meaningful relationships with our partners and reduce customer turn.

Any and all inquiries from a brand to co-pack their beverage should be viewed as an honor. Someone is trusting you to bottle their passion and dreams.

The 1^st step would be to engage in meaningful dialogue. Here a brand should uncover if the co-packer has appropriate equipment, skilled employees, market reputation, appropriate licenses/certifications. In addition, the brand should be willing to share with a co-packer the following: Processing type, Packaging specs, mixing instructions, samples.

From here if a match is made, we would recommend an onsite visit of the facility that would be making your beverage. At this point, pricing and contract terms should be reviewed.

Last step before full scale commercialization would be to organize a small trial run.

Tip: 6 things to look for in a co-packer = Credibility, flexibility, reputation, responsiveness, processes, routines

In my opinion the difference is semantic, similar to how distributor and wholesaler terms are used. The real difference is whether one is a toller vs. turnkey.

A toller has a business model where, brands are essentially “renting” line time and access to one’s quality department. A toller would not be willing to source ingredients, materials nor help develop a formula. Pack fees tend to be lower vs. turnkey.

A turnkey operation has a rolodex of services they offer a brand. They might be willing to source ingredients, materials, offer R&D services, etc. Pack fees tend to be higher here as well.

In talking with beverage entrepreneurs, we have not heard of a project getting off the ground sooner than 8 months. Most common response is around 14 months.

More and more resources are becoming available to help these entrepreneurs take on the challenges themselves or outsource certain aspects.

Another major benefit is how open/transparent young brands are about building in public. They gladly share their journey across all the social channels. Join some communities & post away on LinkedIn, Twitter, Reddit and Instagram.

Resources to check out: Fata & Fleishman / BevSource / Rodeo CPG

At most, co-packers would prefer to work with brands that have a commercial ready formula. Two resources that help brands achieve this are Flavor Houses and/or Process authorities. Along the way, co-packers are willing and able to accommodate formula changes to existing products. 

It starts with not treating a co-packer as a business partner and simply looking at it as a business expense. The other big misstep is not having a contract outlining all agreed upon terms (length, price, volume, payment, downtime charges, audits, etc). Contracts protect both the co-packer and brand.

Supply chain disruptions affect all aspects of our business. Inbound and outbound shipments are delayed which puts immense pressure on warehousing space, which in turn could put production runs at jeopardy.

Delayed materials / ingredients have a ripple effect on production schedules, either pushing out or pulling up runs. One solution creates another problem somewhere in the organization.

Price increase have reached levels where they are no longer absorbable and passed on to the brands. The timelines of such notifications vary from overnight to 30 days’ notice.

Lastly, everyone is adjusting to longer lead times and allocations.

We anticipate supply chain easing up late 2022 or even early 2023. Demand planning and material availability will eventually catch up. New bottle/can manufacturing facilities will be coming online around then from American suppliers (Amcor, Ball, Crown, etc) along with overseas brand establishing factories in the U.S. (CanPak).

Macro trends we are seeing are young brands taking on legacy categories overlayed with an added layer of function:

Energy Drink – lower/more natural caffeine drinks

Sports Drinks – Alternative base liquid (coconut water, cherry, watermelon)

Soda – Pre/pro/post Biotics, adaptogens, nootropics

RTDs – Brands are being mindful of package sizes

My eyes are on the use of botanicals amongst alcoholic and non-alcoholic beverages. 

I continue to rotate amongst the following:

Newsletters: Snaxshot by Andrea Hernandez / Fingers by Dave Infante / Indie CPG

Podcasts: Honest Retail / Liquid Assets

All things BevNet / BrewBound

All things Beer Business Daily

NorCal is excited about the continued growth with our current customer base.

We have just installed one of the fastest P.E.T Hot Fill lines in the U.S. down in our Anaheim facility which will add another 12–14MM cases. In addition, our eyes are set on doubling our can tunnel pasteurization capacity in the near future along with diversifying into wine or spirits-based products. To date, we solely focused on non-alcoholic beverages.