Contract Manufacturing vs Your Own Line: The Real Break-Even
The spreadsheet that says owning a line is cheaper at your volume usually forgets four costs. Here is the version that includes them, and the volume at which the answer actually flips.
01What a co-packer's price really covers
A per-case co-packing rate bundles the line, the labour, the changeovers, the QA and the idle time between your runs. It looks expensive per unit because all of that is visible in one number.
Your own line hides the same costs across a dozen budget lines, which is what makes the comparison feel favourable when it is not.
02The four costs owners underestimate
- Changeover and CIP time — often 15–25% of available hours at low SKU volume
- Working capital tied up in raw material you now have to buy ahead
- QA headcount you cannot share with anyone else's production
- The cost of a line sitting idle while you build demand
03Where it flips
For a single-SKU beverage in cans, ownership tends to win somewhere past sustained volume in the low millions of units a year — and only if that volume is steady rather than seasonal.
Seasonality is the killer. A line that runs eight months and idles four has to earn its keep in eight.
04The middle option people skip
Tolling — you own the formula and the raw material, they own the line and the labour — sits between the two and often gives the better answer for a brand at 500k–2M units.
It also keeps your formulation in your control, which matters more than the per-unit saving if the recipe is the business.