Private label, contract manufacturing or OBM: who owns what

By the Silk Foods Ceylon Editorial Team

Sri Lankan food manufacturing is having a good year. Export Development Board figures reported by Daily FT on 1 September 2026 put processed food and beverage exports up 19.23 percent to USD 405.23 million across the first seven months of 2026, inside total exports of USD 10.48 billion. Local shelf demand has moved with it, and a first-time founder now has three credible ways to get a product made.

Most founders compare the three on price per unit. That is the wrong first question.

The three routes differ in what the founder ends up owning: the formulation, the trademark, the certification permit, the print files, and the right to take any of it somewhere else. Price differences of a few rupees a jar close over a year. Ownership decisions do not.

What separates private label, contract manufacturing and OBM

The three routes sit on a single ladder, and the rung is decided by who supplies the recipe and whose name goes on the pack. Private labelling means the manufacturer supplies a formulation from its own portfolio and the buyer puts a brand on it. Contract manufacturing means the buyer brings a recipe and the manufacturer produces it at scale. OBM, own brand manufacturing, means the manufacturer owns the formulation and the brand, and the other party buys finished stock to distribute.

Silk Foods Ceylon (SFC) runs the first two as services and the third as a supply relationship. More than 50 ready-to-go SKUs sit in the private-label portfolio, the in-house research and development team locks new formulations for contract manufacturing, and a distributor who wants stock without a brand of their own buys product already made.

One point is worth stating early, because it decides most of what follows. A founder on the private-label route owns a brand and no recipe. A founder on the contract manufacturing route owns a recipe and a brand. A distributor on the OBM route owns neither, and pays less for that reason. All three are legitimate. Only one of them is a manufacturing business.

How the same three routes compare on lead time, minimum order quantity and line fit, alongside co-packing, is set out in which co-manufacturing service fits a brief. The transition that usually precedes the decision is covered in moving from a home kitchen to a first contract manufacturing run.

Who owns the recipe, the brand and the permit?

Ownership in a Sri Lankan food launch is not one thing. It is at least seven separate assets, held by different parties under different instruments, and a founder who assumes they move together is usually wrong about at least three of them. The table below sets out where each one sits under each route.

What is owned	Private labelling	Contract manufacturing	OBM supply
Formulation and recipe	Silk Foods Ceylon	The brand owner	Silk Foods Ceylon
Trademark on the pack	The brand owner	The brand owner	Silk Foods Ceylon
SLS permit agreement	Signed by brand owner and manufacturer	Signed by brand owner and manufacturer	Held by the manufacturer
Food premises registration	The Matale site	The Matale site	The Matale site
Artwork and print files	The brand owner	The brand owner	Silk Foods Ceylon
Title to finished stock	Brand owner on despatch	Brand owner on despatch	Distributor on purchase
What moves to another factory	The brand, not the recipe	The recipe and the brand	Nothing

Read the last row first. It is the only one that costs money to get wrong. A brand owner who spends two years building a private-label spread into a national listing, then falls out with the manufacturer, keeps the name and the customer relationships and starts the formulation again from a blank page. A brand owner on the contract manufacturing route carries the specification out of the building.

The fourth row is the one nobody expects. Registration of food premises under the Food Act No. 26 of 1980 is granted in respect of a premises rather than a business or a brand. The certificate runs for two years, has to be displayed at the site, and cannot survive a structural change to the premises without written notice to the Food Authority. No version of any of the three routes moves that registration to the founder.

The trademark is the cheapest asset a founder can secure

Trademark registration in Sri Lanka runs through the National Intellectual Property Office under sections 103 and 104 of the Intellectual Property Act No. 36 of 2003. Registration gives the owner the exclusive right to use the mark and to assign or license it, is valid for 10 years from the date of application, and is renewable for further 10 year periods on payment of the prescribed fee.

Ten years from the date of application, not from the date the certificate arrives. That distinction matters for sequencing. Filing early costs the same as filing late and starts the clock sooner, which is the opposite of how founders usually treat it.

The practical error is ordering artwork before the mark is searched. Print files are cheap to redraw and expensive to recall once 12,000 labels are sitting in a store room, and a label reprint on a live SKU pushes a shelf date by weeks rather than days.

The print side of that timeline is worked through in artwork and print lead time as the private-label gate.

There is a second ownership marker on the pack that founders rarely notice. The Food (Labelling and Advertising) Regulations 2026, gazetted as Extraordinary No. 2494/47 on 26 June 2026 and in operation from 1 July 2026, require a business-to-business food product to carry both the manufacturer’s name and address and the distributor’s name and address, along with batch number, dates of manufacture and expiry and a complete ingredient list, plus the statement Not for retail sale in bold at not less than three millimetres. Two named parties, printed on the pack, in a fixed relationship. The label states the ownership split whether or not the contract does.

Why does the certification file stay with the factory?

The Sri Lanka Standards Institution (SLSI) grants an SLS mark permit once the agreement is signed by the brand owner and the manufacturer and the relevant payments are made. Two constraints in the scheme decide how portable the result is. One permit covers one brand. And the mark has to be obtained for every location at which that brand is made.

Put those together and the certification file turns out to describe a factory, not a company. A brand owner moving production between sites is not transferring a permit. A new location is a new assessment against the same standard, with the site-side evidence rebuilt from the beginning: the quality management system, the process flow chart with inspection points marked, the sample rounds, the on-site assessments.

The research and development team at the Matale facility watches this land the same way most quarters. A founder arrives with a product that has sold well through direct channels for a year, a target listing date about eight weeks out, and a settled belief that the recipe is theirs. It usually is not. The version that sells was adjusted for retort, for glass-jar headspace and for batch-to-batch consistency at 1,500 units by whoever ran those trials, and the adjusted version is the one that has to be certified. Sorting that out on paper before the first commercial run costs a meeting. Sorting it out after a listing costs a season.

Buyer's checklist: settle these before the first order The trademark application filed, or at least searched, before any artwork goes to a printer. A written statement of who owns the formulation, signed before the first sample is costed rather than after the first order. The name that will appear on the SLS permit agreement, and confirmation that it matches the name on the pack. Confirmation of which party is named as manufacturer and which as distributor on the label, since the labelling regulations require both. A note of which SKUs the permit covers, given that one permit covers one brand at one location. The artwork print files held by the brand owner in an editable format, not only as a proof supplied by a third party. A stated position on whether the recipe may be sold to another buyer, and in what category. A realistic date for the first commercial run, counted back from the shelf date rather than forward from today.

What the manufacturer-side audit stack actually contains is set out in the certification stack for a Sri Lankan contract manufacturer, and the category question of when the SLS mark is required at all is covered in SLS certification for a Sri Lankan retail listing.

Which route fits a first commercial run?

For a founder testing a category rather than a specific recipe, private labelling is the faster and cheaper entry, and the trade is that the formulation is not an asset. First-run minimums at Silk Foods Ceylon are 1,500 jars for spreads in 300 g glass, 1,250 bottles for beverages in 200 ml and 180 bottles for capsules, so a first private-label SKU is a single-day run on the semi-liquid line rather than a capital project.

For a founder whose product is the recipe, contract manufacturing is the only route that leaves the specification in their hands. Budget 2 to 4 weeks from a locked recipe to a first commercial run, and 6 to 10 weeks when formulation work has to run first. That second number is the honest one for most first-time founders, because a kitchen recipe is rarely a production specification.

OBM supply fits a distributor with a route to market and no interest in owning a product. It is the lowest-risk route and it builds the least. A distributor who wants to become a brand owner later starts the ownership work then, at a worse moment, with a customer base attached to somebody else’s name.

There is a fourth answer that gets given more often than founders expect: not yet. A brief with no trademark search, no view on who owns the formulation and a shelf date already promised to a buyer is not a manufacturing problem. It is a sequencing problem, and two weeks of paperwork ahead of the run is cheaper than any of the alternatives.

The cost of getting the sequence wrong later, when an audit chain has to be handed from one site to another, is set out in switching co-packers and the audit chain handover.

Service snapshot: contract manufacturing and private labelling at Silk Foods Ceylon Service: Silk Foods Ceylon manufactures a brand owner's recipe at the Matale facility, or supplies a portfolio formulation under the brand owner's label. Capacity: 3,000 jars per day on semi-liquids, 2,500 bottles of 200 ml per day on beverages, 200,000 capsules per day, 15,000 patties per day and 30,000 nuggets per day. First-run minimums: 1,500 jars for spreads and preserves in 300 g glass, 1,250 bottles for beverages in 200 ml, and 180 bottles for capsules. Lead time: 2 to 4 weeks from a locked recipe to a first commercial run, and 6 to 10 weeks when formulation work runs first. Certification: BRCGS and FSSC 22000 V6 audited, with SLSI clearance and Sri Lanka Food Act compliance on every retail SKU.

Frequently asked questions

Who owns the recipe in a private-label arrangement in Sri Lanka?

The manufacturer does. Private labelling supplies a formulation from the manufacturer’s own portfolio under the buyer’s brand, so the buyer owns the trademark and the artwork but not the specification. A brand owner who wants to hold the formulation uses contract manufacturing instead, bringing or commissioning the recipe.

How long is a Sri Lankan trademark registration valid?

Ten years from the date of application, renewable for further 10 year periods on payment of the prescribed fee, under sections 103 and 104 of the Intellectual Property Act No. 36 of 2003. Registration is administered by the National Intellectual Property Office and gives the owner exclusive rights to use, assign or license the mark.

Can an SLS permit be transferred to a new manufacturer?

No. The permit is granted on an agreement signed by the brand owner and the manufacturer, covers one brand, and has to be obtained for every location where that brand is made. A change of production site is a fresh assessment against the same Sri Lanka Standard, not a transfer of an existing permit.

Does food premises registration follow the brand owner?

No. Registration under the Food Act No. 26 of 1980 is granted in respect of a premises, runs for two years, has to be displayed at that site, and cannot survive a structural alteration without written notice to the Food Authority. It belongs to whoever operates the site, under all three routes.

Can Silk Foods Ceylon develop a recipe that the brand owner keeps?

Yes. In-house research and development at the Matale facility develops formulations for brand owners, with ownership settled in writing before the first costed sample. First-run minimums are 1,500 jars for spreads in 300 g glass, 1,250 bottles for beverages in 200 ml and 180 bottles for capsules.

How Silk Foods Ceylon can help

For a first-time Sri Lankan brand owner deciding between a portfolio SKU and a formulation of their own, Silk Foods Ceylon runs both routes out of one cellular-manufacturing facility in Matale on a single BRCGS and FSSC 22000 V6 audited cert stack, with more than 50 ready-to-go private-label SKUs and an in-house research and development team for brand owners who want the specification in their own name. Capacity runs to 3,000 jars per day on semi-liquids, 2,500 bottles of 200 ml per day on beverages and 200,000 capsules per day, with first-run minimums of 1,500 jars, 1,250 bottles or 180 capsule bottles. Ownership of the formulation is settled in writing at the briefing stage rather than after the first order.

To brief a project, email b2b@esilkroute.com.lk or call +94 76 441 0389 or +94 76 918 5744.

Sources

National Intellectual Property Office of Sri Lanka, Trademarks, 2026, on registration under sections 103 and 104 of the Intellectual Property Act No. 36 of 2003, validity of 10 years from the date of application, and renewal for further 10 year periods on payment of the fee (retrieved 2026-09-05): NIPO trademarks

Sri Lanka Standards Institution, SLS Mark Product Certification, 2026, on the permit being granted after the agreement is signed by the brand owner and the manufacturer, one permit covering one brand, and the mark being required for every location at which that brand is made (retrieved 2026-09-05): SLSI SLS mark product certification

Ministry of Health, Sri Lanka, Food (Registration of Premises) Regulations, made under the Food Act No. 26 of 1980 and in operation from 1 January 2020, on registration being granted in respect of a premises, a certificate in force for two years, display at the premises, and written notice to the Food Authority before any structural alteration (retrieved 2026-09-05): Food (Registration of Premises) Regulations

Ministry of Health, Sri Lanka, Food (Labelling and Advertising) Regulations 2026, Gazette Extraordinary No. 2494/47 of 26 June 2026 made under section 32 of the Food Act No. 26 of 1980, on the business-to-business exemption and its ten particulars, including the manufacturer’s name and address and the distributor’s name and address, and the statement Not for retail sale in bold at not less than 3 mm (retrieved 2026-09-05): Gazette Extraordinary No. 2494/47

Daily FT, Exports cross 10 b record as services offset merchandise weakness, 1 September 2026, reporting Export Development Board data on processed food and beverage exports rising 19.23 percent to USD 405.23 million in January to July 2026 inside total exports of USD 10.48 billion (retrieved 2026-09-05): Daily FT on export performance

Written by the Silk Foods Ceylon Editorial Team. Silk Foods Ceylon (Pvt) Ltd. is a BRCGS and FSSC 22000 V6 audited contract manufacturer in Matale, Sri Lanka, offering contract manufacturing, private labelling, co-packing and in-house research and development for local Sri Lankan brand owners, FMCG companies, hotel and restaurant groups, and distributors. To brief a project: b2b@esilkroute.com.lk, +94 76 441 0389, or +94 76 918 5744.