Qualified launch customers
Specify product / package duties, trial requirements, campaign sizes and actual commercial commitments. A prospect forecast is not equivalent to accepted minimum-volume demand.
RTD beverage co-packing facility planning
RTD beverage co-packing plant planning.
Price usable customer capacity.
Build the product / package envelope, customer commitments, conversion economics, operating costs and launch cash before selecting a flexible RTD line.
How DPS can scope the process and investment decision.
Start with the business outcome
A new RTD co-packing operation earns from qualified billable production, not theoretical equipment availability. DPS can connect process / package requirements, OEMs, utilities, controls, site and project delivery. The owner must define customer obligations and whether revenue is a conversion fee or a finished-product sale before any price, cost or ROI calculation is useful.
RTD includes different products, preservation routes and packages. Confirm each actual qualified route and supplier scope; no universal aseptic, alcoholic or shelf-life capability is established by one line. Customer qualification, contracts and product / package release remain explicit owner / specialist responsibilities.
RTD beverage co-packing facility planning: product and operating requirements.
Commercial ownership boundary
Separate customer-owned ingredients / packaging from co-packer-owned materials. Conversion-fee revenue and conversion cost must exclude the same customer-owned items; working capital follows actual ownership and payment terms.
Campaign and utilization model
Include cleaning, product / format change, staffing, quality release, storage and dispatch. Flexible equipment can increase qualified coverage while short campaigns reduce useful billable time.
RTD beverage co-packing facility planning: compare process and equipment options.
Choose launch products and packages that share a verified operating range.
Map customersProduct, package and commitment basis.
Qualify the routeOwner and specialist process / package trials.
Build campaignsMinimum runs and transition requirements.
Confirm economicsConsistent revenue / cost ownership.
Resolve before procurementDo not design around every conceivable RTD product and call the resulting nameplate capacity billable.
Coordinate process / filler packages, site and required operating services.
Select feasible dutiesProduct, package and quality basis.
Map all interfacesUtilities, controls, cleaning and storage.
Cost the full scopeOwner, DPS and specialist packages.
Include operating resourcesStaff, quality, support and overhead.
Resolve before procurementA skid purchase is not a new co-packing factory budget.
Treat qualification, commissioning and demand as staged gates.
Prepare the siteUtilities and specialist readiness.
Test representative productsCustomer / package acceptance.
Ramp real campaignsStaff, yields, transitions and orders.
Reconcile billable outputActual contribution and cash need.
Resolve before procurementInitial inventory and receivables can consume cash before expected utilization is achieved.
Equipment duties, utilities and supplier responsibilities.
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| System | Operating duty | Relevant DPS guide | Confirm before purchase |
|---|---|---|---|
| Process engineering | Turn measured requirements into an interface and duty specification. | Process engineering ↗ | Actual product envelope, baseline data, qualified trials and responsibilities. |
| Utility supply and return | Meet the duty where the process actually uses it. | Utility infrastructure ↗ | Peak overlap, recovery, quality, point-of-use conditions and isolation. |
| Instrumentation and controls | Execute the agreed sequence and record meaningful equipment states. | Automation & controls ↗ | I/O, alarms, recipe authority, backups and acceptance tests. |
| OEM and field interfaces | Connect the selected equipment to the existing operating train. | Installation & integration ↗ | Mechanical, electrical, software, site access and integrated acceptance. |
Conversion-fee co-packing vs finished-product manufacturing.
Both models can be evaluated, but their revenue, variable costs, inventory and working-capital boundaries must agree.
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| Decision | What to compare | Acceptance evidence |
|---|---|---|
| Conversion fee | Customer-owned ingredients / packaging excluded from both fee and conversion cost | Billable accepted quantity and actual service boundary. |
| Finished-product sale | Net product price includes all owned materials / packaging costs | Correct contribution and inventory / receivable funding. |
| Facility design | Qualified products / formats and campaign demand | Full capital, additional fixed expense and realistic ramp. |
Unsupported utilization, inconsistent pricing boundary and operating value.
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| Observed condition | Measure before design | DPS / team decision | Economic basis |
|---|---|---|---|
| Unsupported utilization | Use qualified customer / campaign demand. | Phase realistic scope and launch. | Billable good kg at conversion contribution. |
| Inconsistent pricing boundary | Clarify material / packaging ownership. | Model fee or finished-product sale consistently. | Net contribution after the correct variable cost. |
| Short campaigns | Measure / model qualified transitions. | Coordinate flexibility and practical run lengths. | Useful production after changeover, not nameplate capacity. |
| Hidden startup funding | Build all capital and owner launch costs. | Include ramp, fixed payroll and working capital. | Full initial cash and year-one operating cash. |
Compare site, staging and complete operating scope.
Assess whether retained equipment and a suitable building can support the qualified RTD product / package mix, campaign pattern and customer requirements. Establish condition, interfaces and the real utility / cleaning gaps.
Investment boundaryUse a separate adaptation budget, retained-asset risks and complete launch cash. Keep conversion-fee and material ownership boundaries consistent; a low asset purchase price is not the full cost of accepted customer production.
Define qualified launch customers, package / preservation duties, OEM packages, site, utilities, controls, staff and quality readiness before procurement. Stage the commercial launch around actual campaigns and customer acceptance.
Investment boundaryThe displayed new-facility case has zero historical savings and includes additional fixed operating cost, ramp and working capital. Its conversion fee and variable conversion cost both exclude customer-owned ingredients and packaging.
RTD co-packing plant cost: equipment, installation and launch cash.
Compare proposals with the same product duty, supplier boundaries and acceptance basis. The amount below is a transparent planning example, not a market price range, supplier estimate or DPS quotation.
| Cost bucket | Assumed amount |
|---|---|
| Process / site engineering and supplier coordination | $150,000 |
| Defined process and specialist packaging equipment | $980,000 |
| Mechanical / electrical installation | $330,000 |
| Control / package integration | $180,000 |
| Commissioning and agreed customer-trial support | $120,000 |
| Training / documentation / closeout | $40,000 |
| Defined project scope | $1,800,000 |
| Separate site / facility additions | $700,000 |
| Capital contingency (15%) | $375,000 |
| Separate one-time startup / shutdown cost | $150,000 |
| Incremental working capital | $300,000 |
| Total initial cash | $3,325,000 |
The defined scope assumes applicable freight, procurement charges and taxes are included in the owner’s estimate. Add missing civil, land / shell, OEM, environmental, validation and permitting costs explicitly. Site and field conditions, duty, production access and quoted supplier scope determine actual price. Financing is excluded.
Worked operating case
Hypothetical screening case: 250 days × 7 equivalent useful hour/day × 3,000 accepted kg/h × 55% realization, capped at 2,500,000 kg incremental demand, gives 2,500,000 additional sold kg/year. Net price $1.45/kg less incremental variable cost $0.6/kg gives $0.85/kg contribution. Verified baseline purchase savings are $0, realized payroll savings $0, energy $0, cleaning resources $0 and maintenance $0 per year. Deduct $800,000 additional annual fixed cost. This is a new-operation conversion-fee case: $1.45/kg fee and $0.60/kg variable conversion cost both exclude customer-owned ingredients / packaging. No historical savings apply. The $800,000 annual fixed cost assumes $500,000 fixed payroll, $150,000 occupancy / overhead and $150,000 support / other operation. Startup cost covers owner pre-production expense outside supplier commissioning; ramp models the separate unrealized operating gross benefit.
Calculated from these assumptions: steady annual net benefit $1,325,000; year-one net cash $156,250; cash payback 3.39 years; five-year NPV at 10% is $635,292. Change the assumptions below to test a different case.
RTD co-packing business case: fee margin, utilization and cash flow.
Replace the illustrative inputs with your own measured or quoted values. The five-year pre-tax model uses good kilograms, demand-capped contribution and separately verified baseline savings; it is not a project quotation.
All defaults are illustrative. The initial preset is a new-operation case. It assumes no historical operating savings and includes the defined full additional fixed operating cost. For a new operation, set baseline savings to zero and enter every additional operating and capital cost.
- Initial cash investment
- $3.33M
- Steady annual net benefit
- $1.32M
- Cash payback
- 3.39 years
- 5-year NPV
- $635.3k
- Steady annual cash ROI
- 39.8%
- 5-year net cash ROI
- 64.1%
Includes contingency, startup and working capital
Incremental operating cash before tax
Includes year-one ramp assumption
At 10% annual discount
Net annual benefit ÷ initial cash
Net cumulative gain ÷ initial cash
Modeled incremental sales: 2,500,000 kg/year at $0.85/kg contribution. The demand ceiling limits sales. The base case has a nonnegative five-year NPV at the selected discount rate. Year-one net cash: $156,250.
Realization needed for the target operating payback
42.4%
Minimum capacity realization for a 4-year operating cash payback; terminal recovery excluded. Demand and unit margin must also hold.
CSV export is local. No inputs are submitted.
Cumulative project cash
BaseDownside
Swipe the chart to compare all five years ↔
Inspect annual cash flow and sensitivity
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| Year | Net cash | Cumulative cash | Discounted cash |
|---|---|---|---|
| Initial | −$3,325,000 | −$3,325,000 | −$3,325,000 |
| Year 1 | $156,250 | −$3,168,750 | $142,045 |
| Year 2 | $1,325,000 | −$1,843,750 | $1,095,041 |
| Year 3 | $1,325,000 | −$518,750 | $995,492 |
| Year 4 | $1,325,000 | $806,250 | $904,993 |
| Year 5 | $1,325,000 | $2,131,250 | $822,721 |
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| Case | Annual benefit | NPV | Cash payback |
|---|---|---|---|
| Downside | $672,625 | −$2,086,535 | Beyond 5 years |
| Base | $1,325,000 | $635,292 | 3.39 years |
| Upside | $1,537,500 | $1,334,585 | 3.00 years |
Downside: installed and site costs +20%, realization ×0.75 and unit contribution reduced by 20% of its absolute value. Upside: realization ×1.15, capped at 100%, and unit contribution improved by 10% of its absolute value. The demand ceiling still applies.
Formulas, scope and double-counting rules
Initial cash = (defined project scope + site additions) × (1 + contingency) + separate startup / shutdown cost + working capital. Contingency is conservatively treated as spent initially.
Sold incremental kg = min(days × recovered hours/day × constrained good kg/hour × realization, incremental demand). Contribution = sold incremental kg × (net price − incremental variable cost). New-volume labor, energy and packaging belong in that variable cost.
Baseline material benefit uses the verified percentage of actual purchases avoided at unchanged accepted baseline output. It is not a direct subtraction of two loss rates. Count a recovered kilogram once, either as its applicable cash saving or as incremental contribution.
Net annual benefit = contribution + independently realized baseline cash savings − added fixed operating cost. Year one scales gross benefits by the ramp factor while paying the full added fixed operating cost. Do not also count the same launch loss in the one-time startup amount.
Cash ROI = net annual benefit / initial cash. Five-year net ROI = (five-year cash inflows − initial cash) / initial cash. NPV = −initial cash + Σ cash flow(t)/(1 + discount rate)^t. Payback uses annual cash with linear interpolation within the recovery year. The threshold solver excludes terminal working-capital recovery.
This is a five-year screening horizon, not an asset’s entire life. No tax, debt, depreciation, grants, escalation, asset resale or additional replacement capital is modeled. Include recurring service costs in operating expense and use a detailed monthly budget for formal capital approval.
Future RTD plant design: independent energy-cost comparison
This separate worksheet compares two feasible new-plant designs at unchanged forecast output: $12,500 gross energy difference less $5,000 added service = $7,500/year. It is not historical savings and is not added to the preset. Reflect any qualified alternative through the appropriate variable / fixed operating costs, once.
Commissioning tests and performance acceptance.
Agree the design basis.
Use representative products, measured constraints and a documented utility / cleaning envelope. Assign each supplier and owner interface.
Test the complete sequence.
Plan FAT / SAT, instruments, recipes, permissives, quality checks and upstream / downstream handshakes as appropriate to the scope.
Verify economic realization.
After stabilization, compare matched products and operating conditions. Reconcile extra output with sales, and baseline savings with actual purchases, bills and payroll.
Published scope / project context
Published DPS co-packing context helps define project-delivery questions. It does not establish the launch customers, package qualification, commercial demand or operating return for this new RTD facility.
Compare installed scope, continuity and useful life.
Swipe horizontally to compare all columns ↔
| Decision | Targeted intervention | Broader replacement / new operation |
|---|---|---|
| Constraint | A measured gap can be corrected within retained assets. | The verified operating envelope cannot meet product, demand or reliability needs. |
| Cost scope | Include engineering, interfaces, shutdown, commissioning and retained-asset risk. | Include all new systems, site / facility work, OEMs, utilities, ramp and working capital. |
| Benefit | Only incremental contribution and genuinely avoided costs versus the current operation. | Demand-supported contribution less the full additional operating cost versus the agreed alternative. |
| Acceptance | Verify the changed duty and its effect on the complete line. | Verify the integrated new train and the owner’s readiness to operate. |
RTD beverage co-packing facility planning project FAQ
Can conversion fees be used in the ROI model?
Yes if revenue and variable cost share the same per-good-kg service boundary. Exclude customer-owned materials from both and include all additional fixed costs / working capital.
Why does the new plant have zero baseline savings?
It has no historical operating baseline to reduce. Its cash comes from qualified billable production less complete operating costs.
Does a flexible line guarantee customer utilization?
No. Product / package qualification, minimum campaigns, customer commitments, quality release and dispatch all influence useful billable output.
Are these prices or returns a DPS commitment?
No. The example inputs exist to make the business-case calculation reviewable. Actual scope, prices, schedule, savings and performance need project-specific assessment and agreement.
What should the first DPS conversation include?
Bring the product and package mix, operating baseline, commercial target, retained assets, site constraints, available outage window and the capital options you are considering. Mark unknowns for measurement or supplier trials.
Bring an operating baseline and a testable investment brief.
Prepare the information below, export the assumptions you have modeled, and discuss the unknowns with DPS. An unmeasured input is a question to resolve, not a reason to invent precision.
Checklist and model data stay in this browser until you choose to share them.
Sources, assumptions and further reading.
DPS contract-manufacturing and RTD coverage
DPS publishes co-packing coverage and links process / utility / project disciplines. The conversion fee and facility budget here are original hypothetical business-case assumptions, not market rates or DPS quotations.
- DPS service and equipment scope
- DPS industry overview and published project context
- Process engineering
- Utility infrastructure
- Automation & controls
- Installation & integration
Guide assumptions reviewed on 26 October 2026. Qualified site / product teams establish regulatory and food-safety requirements; this guide does not prescribe a validated process.
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