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How to Avoid Legal Mistakes with Your Co-Manufacturer: Expert Contract Tips for Food, Supplement & CPG Brands
In Episode 6 of the Better Batch Podcast, hosts Alex Koves and Peter Suddard sit down with Lauren Handel, founder of Handel Food Law and one of the country’s top legal advisors to emerging food, beverage, and supplement brands. Lauren specializes in helping CPG companies and co-packers structure bulletproof agreements that prevent disputes, protect intellectual property, and set the foundation for sustainable, scalable manufacturing partnerships.
Whether you’re navigating a co-manufacturer contract for the first time or have been burned by vague pricing terms, IP confusion, or lack of insurance clarity, this episode is your go-to guide. We dig deep into contract law for batch manufacturers, exploring everything from pricing models and specification writing to risk allocation, indemnification, and what to do when things go wrong.
Key Takeaways
1. Treat Your Co-Manufacturer Contract Like a Prenup
A strong contract prevents headaches down the road. Lauren recommends tackling worst-case scenarios before they happen—dispute resolution, IP ownership, and exit strategies need to be built in upfront.
2. Specifications Are the Cornerstone of Quality
The most critical part of your manufacturing agreement is what your lawyer can’t write—product specifications. Brands must own the QA language and clearly define material quality, testing methods, and safety standards.
3. Choose Transparent Pricing Models to Avoid Conflict
Opt for a tolling model + pass-through pricing (ideally with no markup) to ensure visibility and fairness in fluctuating raw material costs. This gives you control without sacrificing transparency.
4. Don’t Skip the Insurance Conversation
Contracts should require product liability, recall insurance, and errors & omissions coverage. Many brands and manufacturers overlook this, leaving dangerous gaps in risk protection.
5. Nail Down Intellectual Property Terms Early
Ambiguity around formulas, process know-how, and supplier lists can lead to IP theft or disputes. Contracts should clarify what’s shared, what’s protected, and what happens if things go south.
6. You Can’t Enforce What You Can’t See
Include audit rights, inspection rights, and requirements for shared documentation to protect your brand. Without transparency, IP clauses are just ink on paper.
7. Fee Shifting = Real Accountability
The biggest lever for motivating fair behavior? A fee-shifting clause that makes the loser pay attorney fees. This changes the game for smaller brands facing legal battles with larger manufacturers.
Actionable Steps For Food, Supplement & CPG Brands:
- Work with a lawyer before signing your co-manufacturing agreement—not after problems arise.
- Require detailed specs for every batch, and hold the manufacturer to testing protocols.
- Demand visibility into material sourcing, pricing, and insurance coverage.
- Define ownership of IP and limit how your proprietary information can be used or disclosed.
Actionable Steps for Contract Manufacturers:
Be prepared to share pricing structures and justify increases.
Understand your legal obligations—especially around non-conforming products and raw materials.
Don’t demand exclusivity unless you’re also guaranteeing capacity.
Get proper insurance, and ensure your team knows the limitations of liability in your agreements.
About the Guest
Lauren Handel is a leading attorney in the U.S. food and beverage industry, and founder of Handel Food Law, a boutique firm advising brands, manufacturers, importers, and distributors. Her expertise spans co-manufacturing contracts, labeling compliance, IP protection, and dispute resolution. Lauren is known for helping early-stage and scaling brands navigate the legal complexities of growth while avoiding litigation.
Learn more: https://www.handelfoodlaw.com
🔗 LinkedIn: Connect with Lauren
About the Hosts
Alex Koves: As the President and CEO of Mar-Kov, Alex leads the charge in delivering purpose-built software tools that simplify complex manufacturing challenges. His background in operations management fuels his passion for helping businesses optimize their processes. Connect with Alex on LinkedIn.
Peter Suddard: Peter has worked with batch process manufacturers for years, helping them scale and improve their business. He has extensive experience ensuring customer success and driving product enhancements, making him an invaluable resource for manufacturers seeking to scale. Connect with Peter on LinkedIn.