Many beverage brands don’t own a winery, brewery, or distillery. They work with a contract producer or co-packer that makes, bottles, or cans the product for them. Lindsey Zahn P.C. drafts, reviews, and negotiates contract production and co-packing agreements for brand owners and producers, and makes sure the arrangement works under federal and state alcohol and food rules.
A good agreement does more than set a price. It decides who owns the recipe and the label approvals, who holds which permits, who is responsible if a product is recalled or a regulator asks questions, and what happens to your inventory and formulas if the relationship ends.
Choosing the right structure
Contract production can take several forms: a producer making product under its own permit and selling it to the brand owner, an alternating proprietorship in which the brand owner holds its own permit and uses another company’s premises, or a co-packing arrangement for non-alcoholic and food products. Each structure carries different permit, labeling, tax, and recordkeeping obligations. The firm helps you choose the one that fits your business and documents it correctly.
How the firm helps
- Draft, review, and negotiate contract production, custom crush, and co-packing agreements
- Advise brand owners and producers on which party needs which federal permits and state licenses
- Address ownership of recipes, formulas, trademarks, and label approvals (COLAs)
- Set clear terms for specifications, quality control, minimums, pricing, and payment
- Allocate responsibility for regulatory compliance, recalls, insurance, and indemnification
- Plan for termination, including transfer of inventory, packaging, and formula and label approvals
- Coordinate with alternating proprietorship, distribution, and private label arrangements
Frequently asked questions
What is the difference between a co-packer and a contract producer?
The terms are often used interchangeably. In alcohol, a contract producer usually makes the product under its own federal permit for a brand owner. Co-packer is the more common term for non-alcoholic beverages and food. Either way, the agreement should spell out who is responsible for permits, labels, and compliance.
Does a brand owner need its own TTB permit?
It depends on the structure. In some arrangements, the producer’s permit covers production and the brand owner may need other federal or state authorizations to sell the product. In an alternating proprietorship, the brand owner holds its own permit. The firm can tell you which applies to your plans.
Who owns the formula and label approvals?
Ownership should be addressed in the agreement. Without clear terms, a brand owner can face delays moving production to a new partner. The firm drafts provisions that protect your recipes, formulas, and label approvals.