Growth, Pressure, and Risk
The co-manufacturing and private label trends are no longer in the shadows in the dairy retail industry; they are taking center stage. According to the Private Label Manufacturers Association, natural cheese ranked first among the top 20 store brand food categories in 2025, with sales exceeding $9.8 billion. Dairy milk ranked third on the list. As retailers push for more innovation and speed, store brand programs continue to expand, and that growth has a direct impact on how dairy products are made.
Partnering with a co‑packer can be an effective way to grow a brand while offering benefits to both companies. These risks affect both companies, but with the right guidance many can be managed and transferred through appropriate insurance coverage.
Production capacity, food safety, and capabilities are the obvious boxes to check, but making sure the right insurance coverage is in place matters just as much. Strong risk management starts with the right questions and the right structure behind the coverages and contracts.
Here are a few key considerations for brand‑owners:
Warehousing Services
If the co‑packer will also provide warehousing, review contract terms for care, custody, and control, and confirm limits match the value of the stored product.
Continuity Plan
If the co‑packer is your sole producer, consider how you will manage lost sales if their plant shuts down. Review your business continuity plan and discuss dependent business
Appropriate Recall Coverage
If the co‑packer has recall coverage, determine whether it is limited product withdrawal coverage or true Product Contamination Insurance. Limited policies typically cover only the co‑packer’s own recall costs, whereas PCI can also address third‑party expenses and help protect key customer relationships.
Yes/And: Our Take
Co‑packing will continue to shape how dairy brands innovate and grow, but the strength of these partnerships depends on more than production capabilities. By asking the right questions and putting the right coverage in place, companies can protect their investment and strengthen the partnerships that support their growth. Now is the time to evaluate where your current approach stands, connect with a Client Executive today.
