There's a point in a growing food brand's life where the volume outgrows the kitchen it started in. The orders are bigger than a restaurant back-of-house or a shared hourly space can handle, and a decision arrives that shapes the economics of the business: do you make your product yourself at scale, or pay someone else to make it for you?
Paying someone else, outsourcing to a manufacturer or co-packer, is a completely legitimate choice, and for some brands it's the right one. For others it quietly caps the business. The difference comes down to a few things worth working through before you commit, because switching later is expensive.
What outsourcing actually gives you
Handing production to a third-party manufacturer has real, immediate advantages.
You carry no capital cost and almost no fixed overhead. There's no kitchen to fit out, no equipment to buy, no production team to employ, no building to run. Your cost becomes almost purely variable: you pay per unit produced, and when you're not producing, you're not paying. For a brand that wants to stay light, or isn't sure of its volumes, that's genuinely valuable.
It also removes an entire operational burden. Production, with its staffing, compliance, maintenance and food safety, becomes someone else's problem, and you get to focus on brand, sales and product development.
But it costs you more than the invoice.
What it costs you
A co-packer takes a margin. You pay more per unit than it costs to make, because the manufacturer has to make money too. At low volumes that's a fair trade for avoiding fixed costs. As you grow, that per-unit premium becomes a larger and larger sum you're handing to someone else, on every single unit, forever.
You give up control. Your recipe, your quality, your consistency are now in another company's hands and run to their processes, not yours. For a product where the quality is the point, that's a real risk.
You give up flexibility. Co-packers work to minimum order quantities, often high ones, and to their production schedule, not yours. Iterating a recipe, running a small batch, responding quickly to a change in demand, all of it gets slower and harder when you don't control the line. For a brand still refining its product or riding uneven demand, those minimums and lead times can be a serious constraint.
And you may give up part of your brand story. "We make it ourselves" is, for a lot of food businesses, not a detail but the whole proposition. Hand production to a factory and you can lose the thing customers were actually buying.
The crossover is mostly about volume
Underneath all of it, make-or-buy is largely a question of volume against fixed cost.
At low volume, outsourcing usually wins. You avoid fixed costs you couldn't yet justify, and the co-packer's margin on a small number of units is a price worth paying for not carrying a facility.
At high volume, making it yourself usually wins. Once you're producing enough, the fixed costs of your own operation spread across so many units that your cost per unit drops below what a co-packer charges, and the margin you were handing over becomes margin you keep. The more you make, the more that compounds.
Somewhere between the two is a crossover point, the volume at which your own production becomes cheaper per unit than buying it in. Knowing roughly where that sits for your business is most of the decision. Below it, buy. Comfortably above it, and planning to grow, and the case for making it yourself gets stronger every month.
The option most brands forget
Here's where the decision is often framed wrong. Operators tend to see it as a choice between outsourcing and building their own expensive facility, and because building is so costly and slow, they outsource almost by default, even when the volume and the brand would both favour making it themselves.
But building isn't the only way to make it yourself. Renting a production kitchen gives you in-house production, your team, your recipe, your quality, your control, without the capital cost that makes people outsource in the first place. It turns "making it yourself" from a seven-figure commitment into a predictable monthly cost, which changes the maths entirely.
So the real question usually isn't "outsource, or build a factory?" It's "outsource, or make it yourself in space you rent?" And once building's capital barrier is removed, a lot of the reasons brands outsource, the cost and risk of their own facility, fall away, leaving only the genuine ones.
Read: Build vs Rent: The Real Cost of a Central Production Unit
Read: Should We Build a Kitchen
You don't have to choose for everything
Make-or-buy also isn't all-or-nothing. Many of the best food businesses keep the part that defines them in-house and outsource the rest.
Pret makes its salads fresh in-house because fresh assembly is central to the brand, but outsources the dressing pots that go into them. The principle is simple: make what carries your quality and your story, buy what doesn't. Keeping your signature component in your own hands protects the thing customers care about, while outsourcing the commodity parts keeps you light where control doesn't matter. Done well, a hybrid gives you the economics of outsourcing on the parts that are fungible and the control of in-house production on the parts that aren't.
Read: When do you actually need a CPU?
So which is right for you
Honestly:
- Outsource when the product isn't core to your brand story, your volume is too low to justify your own operation, the recipe is simple and stable, and you value zero operational overhead over margin and control.
- Make it yourself when the quality or craft is the point, you're at or heading past the crossover volume, you need to iterate and control the product, co-packer minimums don't fit how you sell, or you simply want to keep the margin you're otherwise handing away.
- Do both when some of your product is signature and some is commodity, which, for most food businesses, is the honest answer.
And remember that "make it yourself" no longer means "build a factory." That's the shift that's changed this decision for most growing brands.
The bottom line
Outsourcing trades margin and control for low commitment and no overhead, which is exactly the right trade when you're small or the product isn't the point, and the wrong one once you've scaled and the quality is your brand. The crossover is mostly about volume, the nuance is usually a hybrid, and the thing that's changed the whole calculation is that making it yourself no longer requires building your own facility. Work out where your volume sits, be honest about what's core to your brand, and the answer is usually clearer than it first looks.
Weighing up whether to bring production in-house? Talk to us about the numbers for your volumes →.
