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Contract Packager, are small, one-off Organic orders worth obtaining Organic Certification?

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#1 Jonco

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Posted 04 February 2020 - 07:36 PM

First, some background: We are a contract packager. This means that company A has item 123 that they need help packaging so they send us the bulk product and packaging/labels and we package the bulk item in the retail packaging and send it back to them/ their distributor. Some contracts are long term/ high volume, some contracts are short term/low volume, we'll take just about any job we are capable of.

 

We have one customer with a large enough project that it will most likely justify organic certification by itself, but the more organic jobs we can get the more financial sense it makes. 

Once we are a certified organic facility, would small jobs that only ever run an item one or two shifts be worth it? Does anyone have experience similar to our situation?



#2 FSQA

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Posted 04 February 2020 - 09:52 PM

Generally speaking i would say yes, as it opens a channel of more customers for your site.

 

If you do handle any Allergens on the site, it can help to communicate the team on the segregation and changeover parts of the processing.

 

Once you adapt to a certifying body, it is easier to add/remove products based on your production cycles (as long as the supplier can provide organic certification of the product).

Based on the processing you conduct, you will be certified as a packager, so the organic certification will be only for your processing and handling of the product.

 

Hope it helps.



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#3 Ryan M.

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Posted 05 February 2020 - 12:12 AM

The real answer is..."it depends".  If you have sufficient volume without the one off organic items to cover your overhead and provide steady revenue and net income for the company then they are not worth it.

 

But....if you can get those customers to pay a premium price for running their organic item once, or twice then it would be worth it. 

 

The real PITA comes with adding the items to your organic summary plan.  For each new item you have to get it approved by your organic certifying agency BEFORE you run it.  Some organic certifiers are better and more responsive than others with this so choose wisely.  I would recommend QAI as I've always had good response from them.  Additionally, the more items you have on your organic summary the more you pay annually for the organic certification so keep that in mind.

 

Someone else mentioned allergens...you probably have a pretty good allergen program, but of course this cannot be stressed enough when you do contract packaging, especially if you don't have direct control over the raw materials / ingredients.



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#4 Laboratory.PVS

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Posted 05 February 2020 - 05:00 AM

Yes, as mentioned above smaller jobs pay a premium price. 

 

We're a wine contract bottler, exactly same business set up as you have described. Some jobs last a couple of hours and others last days. 

 

Whilst only one or two of our customers are organic, we still hold the certification as it is becoming increasing popular. When you are contractor, at least for the ACO code, as you do not own the product when auditing against the code there are a lot of non applicable clauses. It also depends on your competitors activity. We don't see this as a food safety or quality decision, but an economical one. 



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#5 Jonco

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Posted 05 February 2020 - 04:29 PM

Thank you for all of the excellent feedback!  :smile:



#6 AC2018

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Posted 05 February 2020 - 06:44 PM

We are in the same line of work as you (contract packager) and we used to have an organic certification prior to myself being hired on as the QA. I let the certification dissolve since we were no longer packaging organic and the couple of new customers who were interested in us packaging their organic products did not justify the cost to keep up with the certification

 

I agree with the input that everyone has shared thus far and you really have to look at is it worth it for you. Sometimes you can get the customer to cover part of the cost of the certification, especially if you are just gaining it for their products. Or have them sign a contract of a certain amount of units they will guarantee so that again, it's financially worth it for your company. 



#7 Jonco

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Posted 05 February 2020 - 08:16 PM

Thank you AC2018.

 

My challenge is getting management to understand that for Organic contracts they will need to account for the cost by one of the methods you mentioned and especially to build in a longer lead time to submit it to the certifying body.  They have gotten used to being able to have a fairly quick turn around, and are balking at the idea of a "slow down".  :doh:

We'll figure it out.  :cool:



#8 Ryan M.

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Posted 06 February 2020 - 04:02 PM

Thank you AC2018.

 

My challenge is getting management to understand that for Organic contracts they will need to account for the cost by one of the methods you mentioned and especially to build in a longer lead time to submit it to the certifying body.  They have gotten used to being able to have a fairly quick turn around, and are balking at the idea of a "slow down".  :doh:

We'll figure it out.  :cool:

 

 

Put a call in QAI or another certification body and pick their brain.  Discuss your situation and they should be able to give you price quotes for certification and how much for each additional item on the organic summary plan.  If I recall they may have this information on their website.

 

https://www.qai-inc.com/

 

Then you only need to see if they can give a lead time estimate of adding products to the organic summary plan. 

 

In one of my previous jobs we would make custom ingredient and flavor blends for food companies so I had to add organic items pretty often.  QAI was our certification body for organic and our typical lead time was 5 business days or less.  It really only lagged when we had trouble sourcing the necessary documents for the ingredients.  However, another company I worked before it took weeks to get an item added.  We didn't use QAI, we used CCOF.  They were more of a PITA on many things and somewhat inconsistent.



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