Co-Manufacturing in F&B: Production Agility, SKU Increase, and Changeover Squeeze

Welcome to On the Line with Laminar, our series where we go inside the world of process manufacturing to hear what's really driving change on the production floor.  

In this episode, Sanjay Rajan, Head of Go-to-Market at Laminar, sits down with Bobby McLaughlin, Director of Customer Success at Laminar and former Welch's veteran with hands-on experience in customer operations and product commercialization. They dig into the rise of co-manufacturing in food and beverage, the operational tradeoffs that come with it, and why a growing SKU portfolio puts enormous pressure on changeovers and clean-in-place.

Catch the video or check out the transcript below!

Did you miss the latest episode? Catch the deep dive into clean-label impact on F&B here.

Why Co-Manufacturing Keeps Growing

Sanjay: Chick-fil-A has 27 sauce flavors and doesn't own a single plant. What's driving the rise of co-manufacturing?

Bobby: Really two things. First, branded manufacturers are heavily invested in their existing assets — their plants, their lines, their capabilities — and many of those assets are already capacity constrained. Co-manufacturing gives them a way to meet consumer demand without having to build new capacity themselves.

The second side of it is innovation. Brands want to be agile. They want to bring on new flavors, new product offerings, new containers. And the key to that is speed. If you have a new idea and can't make it in-house, you need a partner who can — someone who already has the equipment, the capacity, the capability. You can trial the product quickly, get it into market, get consumer data, and then decide whether it makes sense to bring it in-house. It de-risks the whole thing enormously.

The Cost-Plus Reality

Sanjay: What are the downsides of the co-manufacturing model?

Bobby: It's a necessary evil. The pros are real — added capacity, agility, the ability to get into new markets geographically without owning a plant or a warehouse. But there's another side to it.

It's a cost-plus model. You're not only paying for your ingredients and packaging — your bill of materials — but then you're paying on top of that to have someone make it for you. And in consumer products, beverages, sauces, margins are already razor thin. Then you layer in transportation costs, warehousing costs, processing costs. It adds up fast.

How SKU Proliferation Drives CIP and Changeover Complexity

Sanjay: Let's talk about what this actually means on the plant floor — specifically around cleaning and changeovers.

Bobby: The first question I always ask when talking to a new customer is: how wide is your SKU portfolio? Because that directly correlates to their cleaning and changeover procedures.

The wider that portfolio, the more time a facility spends in clean-in-place and changeover. When you're going from brand to brand to brand, you're dealing with different allergens, different ingredients, different levels of pungency, different viscosities. The cleaning cycles tend to be longer. And as you add more SKUs to the portfolio, you're natively adding more cleaning time — which means less time the line is actually producing product.

For every new customer a co-manufacturer brings in with a different product portfolio, they're trading production time for cleaning time. It's a direct tradeoff.

The Core Tension: Flexibility vs. Line Utilization

Sanjay: We're working with a large beverage co-manufacturer right now that has lived this firsthand. They started as a beverage company and realized they were spending more time on clean-in-place than on actually running beverage. That's a real problem — because the flexibility that wins them new business is the same thing eating their line utilization.

Bobby: Exactly. And that's what makes co-manufacturers such a natural fit for what Laminar does. They're already hyper-focused on line time, line utilization, production efficiency. Every minute lost to a breakdown, a changeover, or a CIP cycle eats directly into that. There's a natural alignment between optimizing CIP and changeover and the way co-manufacturers think about their business.

What's Next?

That wraps up Episode 4 of On The Line with Laminar.

To see how Laminar's ML-driven CIP and changeover optimization helps co-manufacturers protect line utilization without giving up flexibility, explore our customer stories or talk to the team.

Catch up on episodes you missed here:

• On the Line, Episode 1: Peak Sauce and CIP Bottlenecks

• On the Line, Episode 2: Factory Floor to Founding Laminar

• On the Line, Episode 3: Clean Label and Consumer Demand