#257 Co-Man Due Diligence 101 with Riot Energy and Kelley Drye & Warren LLP

In this episode of the Startup CPG Podcast, host Daniel Scharff sits down with Laura Jakobsen, founder of Riot Energy, and Daniella Carelli, Special Counsel at Kelley Drye & Warren LLP, for a deep dive into co-manufacturer due diligence — finding the right partner, evaluating them properly, and getting a solid contract in place before things go wrong.Riot Energy has scaled from an early-stage beverage brand into nationwide distribution across Whole Foods, Costco, and convenience, all while pushing co-packers to produce a next-gen energy drink with no artificial sweeteners, no added sugar, and real ingredients. Laura brings the brand-side battle scars; Daniella brings nearly a decade of legal experience representing both brands and co-manufacturers, giving the conversation a rare view from both sides of the negotiating table.Together they unpack what actually separates a good co-man relationship from a costly one — not just price per unit, but reporting transparency, yield loss tracking, IP protection, and the kind of contract flexibility that only shows up when you ask the right questions upfront.Listen in as they discuss:Why the "partnership approach" matters more than price when evaluating a co-manufacturerThe three reporting buckets every brand needs from day one: attainment, inventory, and shipping/receivingA real contract clause example — flavor-swap flexibility when ingredients don't show up on timeHow to protect trade secrets when a co-packer has full visibility into your recipe, including working with flavor houses to fragment the formulaWhat to actually look for during a facility walkthrough, from hairnets to batch cards to QA cultureWhy founders should build their own baseline co-man agreement instead of just redlining the co-packer's templateThe case for flexible payment terms over the lowest per-unit price — and how that impacts cash flowWhy yield loss tracking is one of the most overlooked (and costly) blind spots for early-stage brandsWhen a PO-to-PO relationship is fine — and when it's time to invest in a formal long-form contractHow to test whether a potential co-man will actually be a partner, not just a vendor, before you sign anythingEpisode Links:Laura Jakobsen – Founder, Riot Energy: LinkedInRiot Energy Website: https://riot.energy/ Daniella Carelli – Special Counsel, Kelley Drye & Warren LLP: LinkedInKelley Drye & Warren LLP – Consumer Packaged Goods Practice: https://www.kelleydrye.com/industries/consumer-packaged-goodsDon't forget to leave a five-star review on Apple Podcasts or Spotify if you enjoyed this episode. For potential sponsorship opportunities or to join the Startup CPG community, visit http://www.startupcpg.com.Show Links:Transcripts of each episode are available on the Transistor platform that hosts our podcast here (click on the episode and toggle to "Transcript" at the top)Join the Startup CPG Slack community (35K+ members and growing!)Follow @startupcpgVisit host Daniel's LinkedInQuestions or comments about the episode? Email [email protected] music by Super Fantastics