Top Companies in the food and beverage industry always take advantage of a chance to introduce better foods in the market in shorter periods. One key method is through OEM (Original Equipment Manufacturer) services, which allow businesses to focus on their brand while outsourcing the production process to specialized manufacturers. Food and Beverage OEM –What does it stand for, and what are the advantages for your business?
So, in this post, we are going to discuss how OEM applies to the food business and why it is the right decision for your product.
What is Food And Beverage OEM?
Food & Beverage OEM means working with a manufacturer that develops products within specific guidelines and under the guidelines of the food & beverage OEM company. In this model, the product itself, including its contents, name, and look and feel, is managed by the brand, while the process of actually making the product is controlled by the OEM.
This comes in handy for businesses, for instance, that wish to sell customized products but need more production machinery. The OEM works on the design of the company’s featured product and brings brought to the market, fully branded, for distribution.
How Does OEM Differ from Other Manufacturing Models?
There are other similar options, such as contract manufacturing and private label services, and OEM stands out because of the level of customization it offers. Here’s a brief comparison:
➜ OEM: With OEM, you have complete control over the product. From ingredients to packaging design, everything is customized as per your brand vision. You invest in recipe development, product R&D, and custom packaging. While OEM involves higher upfront costs, it gives you a unique product that no one else can replicate. It’s perfect for premium or highly differentiated products.
➜ Contract Manufacturing: In contract manufacturing, you provide your formulation or idea, and the manufacturer produces it. It offers good customization at a lower cost than OEM. However, some elements, like packaging or sourcing, may be standard. It’s best suited for startups or mid-sized brands looking to scale production without heavy R&D investment.
➜ Private Label Manufacturing: Private label means you choose from the manufacturer’s ready-made products and simply apply your brand label. It’s the cheapest and fastest option, but lacks product uniqueness. Suitable for those who want to enter the market quickly and test customer response.
Pros & Cons of Food And Beverage OEM
| Factor | Pros | Cons |
|---|---|---|
| Cost Efficiency | Reduces manufacturing costs as brands don’t need to invest in production facilities. | Higher per-unit cost compared to in-house manufacturing. |
| Time to Market | Faster product launch since the OEM has pre-established production setups. | Limited customization options, as OEMs may have standard formulations. |
| Expertise & Quality | OEMs have specialized knowledge, certifications, and quality control processes. | The brand has less control over product quality and consistency. |
| Regulatory Compliance | OEMs often handle certifications like FSSAI, FDA, and GMP. | Dependence on OEM for compliance updates and audit readiness. |
| Scalability | Easy to scale up production without significant capital investment. | Risk of supply chain disruptions if the OEM faces production issues. |
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Benefits of Food And Beverage OEM
➣ Product Customization: OEM services provide companies with total customization since they can be made to produce products according to the vision of the company. Whenever it is a new product like a snack, a drink, or a supplementary product, OEM manufacturers operate within the specifications of the particular brand, thereby creating a unique product in the market.
➣ Cost-Effective Production: Constructing a new production facility is very expensive, as far as the amount of capital that is required to put up the structure is concerned, as well as the number of years it will take before it is complete. One major advantage of outsourcing OEM food manufacturing services is that the firm does not need to invest in product development when this service provider is readily available to manufacture their products.
➣ Focus on Branding and Marketing: Since the OEM does the manufacturing of the product, the actual brand holder can free up time and resources to market their product and also explore the markets more. This releases much time and effort that can undeniably be channeled into expanding the business and reaching out to the target market.
➣ Scalability: It becomes very hard to scale while the demand for your product is increasing, which is the main challenge that incumbent firms face. In effect, OEM manufacturers can expand their operations depending on the increasing demand, and there is no need for additional facilities and workforce among businesses.
To read more information, visit our blog: Best Beverage Contract Manufacturing Service In India.
When to Consider OEM for Your Business
Food & Beverage OEM is an ideal solution if:
➜ You have a winning concept but need help to afford equipment for food production, or any production for that matter.
➜ You’d like to centralize the production process while keeping the ownership of product formulation, content, and packaging strategy.
➜ You want to ramp up production, while they wish to do something other than build production plants on your own.
Thus, you want to deal with manufacturing less than branding, sales, and marketing.
All types of businesses, ranging from new emerging ones to established FMCG brands, employ OEM services to launch new products into the market in terms of quality. It is widely used, especially in commodity segments such as beverage contract manufacturing, where accurate ratios and high production volumes are of special importance.
Cost Approach in OEM Food And Beverage Manufacturing
Understanding the cost structure is key when deciding whether OEM is the right model for your food or beverage business. Here’s a simplified breakdown of what you can expect in terms of costs:
1. Product Development & R&D: You’re starting from scratch with OEM, so recipe formulation, shelf-life testing, and packaging development are involved.
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Cost Range: ₹1.5 – ₹5 lakhs (depending on complexity & innovation)
2. Tooling & Equipment Customization: If your product requires custom molds, machinery setups, or production lines, there may be one-time setup charges.
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Cost Range: ₹50,000 – ₹3 lakhs (based on machinery needs)
3. Minimum Order Quantity (MOQ): OEM manufacturers usually have a higher MOQ compared to private label or white label models due to custom setup and dedicated production.
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Typical MOQ: 1,000 – 5,000 units per SKU
4. Per Unit Manufacturing Cost: This includes raw material sourcing, production, packaging, and labor.
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Per Unit Cost: ₹20 – ₹250+ per unit (varies by ingredients, packaging, etc.)
5. Packaging Design & Branding: Unique, custom-designed packaging adds both appeal and cost.
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Cost Range: ₹50,000 – ₹1.5 lakhs for professional packaging design
🚀 Ready to Launch Your Food & Beverage OEM?
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Food & Beverage OEM Process with Foodsure Services
| Step No. | Process Stage | Key Activities | Timeline (Approx.) |
|---|---|---|---|
| 1 | Initial Inquiry | Discuss project scope, product requirements, and target market | 1-3 Days |
| 2 | Feasibility Analysis | Evaluate raw materials, production feasibility, and cost estimation | 3-5 Days |
| 3 | Proposal & Quotation | Provide a detailed commercial proposal, including MOQs and pricing | 2-4 Days |
| 4 | Product Development | Ingredient selection, recipe formulation, and R&D trials | 7-14 Days |
| 5 | Sample Approval | Prototype creation and sensory testing for final approval | 5-7 Days |
| 6 | Regulatory Compliance | Labeling, nutritional analysis, and FSSAI, USFDA, or other certifications | 10-15 Days |
| 7 | Packaging Design | Designing primary & secondary packaging with branding | 5-10 Days |
| 8 | Pilot Batch Production | Small-scale production to test market response and product stability | 7-10 Days |
| 9 | Final Production Planning | Setting up manufacturing schedules and procurement of raw materials | 5-7 Days |
| 10 | Manufacturing & Quality Check | Bulk production with strict quality control measures | 10-20 Days |
| 11 | Logistics & Distribution | Arranging transportation and warehousing for product delivery | 5-7 Days |
| 12 | Market Launch | Support for launching the product, including promotions & distribution | 10-15 Days |
| 13 | Continuous Improvement | Monitoring customer feedback and optimizing formulation if needed | Ongoing |
| 14 | Scale-up & Expansion | Expanding production volume and introducing new variants | As required |
| 15 | Long-term OEM Partnership | Ensuring ongoing innovation, compliance, and production efficiency | Ongoing |
Why Choose Foodsure?
➜ Industry Expertise: We have supplied to the food and beverage sector for the biggest companies, such as Flipkart and GM Foods, with quality.
➜ Tailored Solutions: The services offered are tailored to meet the specific needs of your product to make your brand distinct.
➜ End-to-End Support: The development, production, and distribution of your product are covered by our services.
➜ State-of-the-Art Facilities: We have elaborate modern structures that have complied with universal safety measures and quality requirements in production.
➜ Scalability: This means that no matter the quantity you want, whether it is only a few or in large quantities, we can always meet the demand.
➜ Proven Success: Marketed in Gustora, Adani, and Amazon, we have always succeeded in any project that has been entrusted to us.
➜ Innovative Product Development: Our team continues to keep our product up-to-date with the current trends and new ideas that will make you stand out in the market.
Read more: Food & Beverage Processing Consultant in Noida, Delhi.
Your Breakthrough Product Starts Here—Let’s Build It Together!
Looking for expert OEM food and beverage manufacturing services? Partner with Foodsure, the trusted name in OEM food & beverage manufacturing. Contact Foodsure at +91 8130404757. We’ve worked with top brands to bring their ideas to life through custom OEM and contract manufacturing solutions. Let’s help you take your product to the next level!
FAQs – Food & Beverage OEM
➪ What is an OEM in the food and beverage industry?
OEM (Original Equipment Manufacturer) refers to a company that produces food or beverage products based on another brand’s specifications. The brand focuses on marketing, while the OEM handles manufacturing and compliance.
➪ How do I choose the right OEM for my food or beverage brand?
Select an OEM based on factors like industry certifications (FSSAI, FDA, HACCP), production capacity, quality standards, ingredient sourcing, and past client reviews.
➪ What are the costs involved in working with an OEM?
Costs depend on product complexity, production volume, raw materials, packaging, and additional services like R&D or private labeling. It’s best to request a detailed quotation before finalizing an OEM.
➪ Can an OEM develop a custom formulation for my beverage or food product? Yes, many OEMs offer R&D services to create custom recipes, but some may have limitations based on ingredient availability or production capabilities.
➪ Who is responsible for FSSAI and other regulatory approvals when working with an OEM?
Most OEMs handle regulatory approvals, but it’s crucial to clarify responsibilities in the contract. Some brands may need to apply for FSSAI licenses under their name. Would you like any additional details or modifications?
