Finding snack manufacturers for your new brand

Finding snack manufacturers is an important part of building your brand.

When I was recently traveling to Georgia, I saw Romanian snack foods on shelves in supermarkets from a brand I used to love as a kid. I thought to myself: wow, this is so cool!

This made me curious about how to build a successful snack company, so I started researching the process. As part of my research, I called multiple manufacturing facilities in Romania and in other parts of the world to understand what industrial manufacturing entails.

In this article, I’ll share the key things to look for during the process of finding a snack manufacturer that fits your product and business.

How to find snack manufacturers

Ok, first things first. How do you actually find snack manufacturers? Well, I kept it simple and just used my old friend, Google.

You can search for terms like “chocolate bar manufacturer”, “snack contract manufacturer”, or whatever your product is.

As a first filter, make sure they produce the type of product you want to make, have all the required certifications, and offer low minimums.

Another thing you can do is browse industry directories.

Or you can look at brands similar to what you want to build and identify who produces their products. This is a bit of detective work, but it’s worth it. However, avoid doing this with products made by large snack brands because they might have their manufacturing in-house. Or they use some of the largest manufacturers that require volumes you likely don’t have the budget for as a new brand.

Once you gather 5–10 options, the fun begins and you start reaching out.

​White label vs private label manufacturers: which one to pick

As you start doing your research, you’ll see that many manufacturers in the snack food industry offer both white label and private label production. So what’s the difference?

White label means they already produce that snack (usually for their own brand), and they will just put your brand name on it. So you don’t have to develop a new recipe or create a new product.

That might sound attractive because it reduces time to market and cost, but in reality, it’s not a good idea if you want to build a company.

That’s because you don’t have any differentiation, so it’s very difficult to explain to customers why they should buy your product.

Private label, on the other hand, is a much better solution. It means the manufacturer produces a new product just for you and your brand.

So you have to develop the recipe, the manufacturing process, and the branding and packaging.

This is the better choice if you want to create a differentiated product.

I know it might be too early to think about selling a business you haven’t even started. But I like to consider exit requirements early because I don’t want to be in a situation where my exit multiple is lower than it could be just because I didn’t think of these aspects in the beginning.

Producing private label products is also more attractive to investors and industry peers, who are typical buyers when you sell your business.

I worked with private equity investors during my time at McKinsey in the United States, so I can tell you they do very thorough due diligence when investing in a company.

And the moat (or differentiation) of a product is something they look at all the time.

How to reach out to manufacturers

Once you have a shortlist of manufacturers that look like a potential fit, the next step is to start conversations.

I started by sending an email where I included enough information for the manufacturer to understand what I was trying to build. For my research, I told them I wanted to build a crispy cereal bar where the cereal is bound with chocolate instead of syrup.

This is what I included in that outreach email:

• the type of product (e.g. bar, baked snack, coated product)
• a high-level description of ingredients
• the intended format and positioning
• an estimate of expected volumes

And I asked the manufacturer to provide:

• minimum order quantity for this type of product
• price range at different volumes
• constraints related to production lines, ingredient sourcing, and formats

This helped the manufacturer quickly assess whether they were a good fit.

💡 If you need help with your outreach, I included a simple outreach template and a list of key questions in the guide to evaluate your idea.

Considerations for finding the right manufacturer for your snack brand

There are many things to consider when choosing a manufacturer. Here are the most important ones:

Minimum order quantities (MOQ)

Minimum order quantity (or MOQ) is the lowest amount of products the manufacturers will produce per run. 

They can either express this in units (e.g., 10,000 bars) or weights (e.g., 500kg). When you look at their websites, try to find the MOQ. They usually publish it.

Some manufacturers only work with very large MOQs, while others also work with newer brands that need lower MOQs.

At the end of the day, their MOQ will determine your costs and profit margins. So try to pick something that you can fit in your start up budget.

And the manufacturing cost is also one of the drivers of how to price your product, so of course you want to negotiate the lowest possible cost while still maintaining quality.

Process compatibility

Another very important thing is that manufacturing processes can’t be easily changed. That’s because industrial machines are custom-built to support specific processes like coating or extrusion.

So in practice, your product needs to fit existing production lines. This is also one of the ways to validate your product before starting the brand.

Because if manufacturers don’t have the capabilities to make it, you will have to build your own manufacturing plants, which is extremely expensive and not suitable for a start-up with low capital.

I’ll give you one example I encountered during my research. Undercover Snacks could not find a manufacturer for their quinoa crisps because cereal bar manufacturers could not work with chocolate as a binder. And chocolate companies did not have the capability to crisp quinoa, mix it with chocolate and shape it as crisps.

This was also a common constraint I personally heard when I spoke to manufacturers for my chocolate cereal bar. 

At the same time, if you want to make gluten free snacks or allergen-free snacks, the manufacturers need to have special certifications for this. And they need to have production lines specifically designated for these types of products.

Ingredient sourcing

Another thing to discuss with a manufacturer is who sources ingredients. Can they do it for you? Or do you have to source your own ingredients?

If they can do it, that’s better because of two main reasons:

1. Economies of scale. Basically they most likely already source these ingredients for other customers, so they get volume discounts that you wouldn’t be able to get if you’re sourcing the ingredients yourself.

2. It validates your product more since you use ingredients that are already used in industrial manufacturing

Another thing to keep in mind is if you need certain certification for ingredients. For example, can they provide sustainable sourcing for cocoa? Or can they source organic ingredients if you want to make organic snacks?

Most manufacturers I spoke to said they would be able to source my ingredients since both cereal and chocolate are common ingredients. So if you have common ingredients in your recipe, they usually should be able to source them.

Quality standards and required certifications

No matter if you choose to make a premium snack or a cheaper snack, it has to have an exceptional taste for it to get repeat sales. You might be able to get a first sale from just marketing, but repeat sales are driven by taste and perceived quality and value for money.

At the end of the day, consumer preferences dictate if a snack business is profitable and successful.

So you have to find a manufacturer that can meet the quality standards for your product. Can they make it look good and use the right ingredients to meet your brand positioning and vision?

Another important aspect is all the required certifications for manufacturing food products. In the US, the FDA requirements focus on safety, sanitation, and traceability, primarily governed by Current Good Manufacturing Practices (CGMPs) and the Food Safety Modernization Act (FSMA). The EU and other parts of the world have similar requirements too.

So you need to learn if the production facilities have all the certifications before you sign the contract.

​Packaging and labeling

Most of the time manufacturing doesn’t stop at just making the product. It also includes packaging it and labeling it properly to meet all the legal requirements.

Ideally, you want your manufacturer to also do your packaging and labeling. Otherwise you add complexity and cost to the process if you have a separate company doing this for you.

You need to ask if they have the capability to package your snack in the format you want. During my research, I talked to a sweets manufacturer who said they can’t package snacks in resealable pouches, only as bars. They simply didn’t have the machines to do this.

When you design your packaging, besides the fun, creative process of designing it, you have to also think of all the legal requirements such as having: ingredient list, allergens, nutritional information etc.

So make sure to ask the manufacturers you talk to if they have experience with labeling and if they can guide you on compliance.

R&D team for product innovation

While you launch with maybe one of a few flavors, you have to think of coming up with new flavors and innovative products later on as your brand grows.

If you have certain annual revenues in mind, you most likely need to diversify your product offerings so you have more SKUs.

So that means that you need research and development (R&D) to come up with new flavors and new products.

Do the manufacturers you talk to have this capability? Do they have a team for R&D? What’s the cost for this service? How fast can they send you samples for new products? 

These are just some of the questions you should ask them. While R&D might seem like something that’s not very important when you start, after 1-2 years when you want to grow the company it becomes very important. So it’s best to learn what your options are from day one.

Responsiveness and professionalism

Another very important thing I like to look a when talking to manufacturers if their responsiveness and professionalism. 

Did they reply quickly? Are they professional when you speak? Do they follow through?

Usually, how someone does one thing is how they do everything.

So if they are punctual, responsive, and make effort, it gives you more confidence that they will be able to produce your snacks and have a good working relationship with them.

Other things to consider

​What I listed above are the main things to think about. But of course, the list is not comprehensive. 

You should also see if manufacturers can offer you fast lead times, what the process and timeline for restocks will be, how they work with 3PLs and so on.

​A lot more questions will arise once you start the conversations. 

Tying it all together

​When you think of how to start a snack business, manufacturing is a key component. Finding the right manufacturer is complex and it requires you to think of many aspects.

But to be honest, this part where you have to think of all these things is my favorite. You learn so much in the process!

This article is a good starting point for how you have to think through it.

💡 I also put together a guide with tools and manufacturer outreach templates to help you as you start reaching out to manufacturers.

Continue reading

• How to start a snack business
• Is a snack business profitable
• Snack business profit margins explained
• How to validate a snack product idea
• How to price a snack