Dairy Co-Packing Grant 

Grant Overview

This application is currently closed. 

This grant supports existing licensed dairy processors and dairy brands in the Northeast engaged in or planning to use co-packing arrangements. The program supports dairy processors who wish to initiate new co-packing arrangements as well as those with existing co-packing capabilities looking to scale up production, expand product lines, or establish new co-packing partnerships. Additionally, dairy brands currently using co-packing services or planning to initiate co-packing arrangements are eligible to apply, provided the project focuses on scaling or initiating production of existing products through co-packing. 

Applicants are required to allocate at least 10% of their grant funds to obtain technical assistance or training relevant to value-added co-packing production. Grant funds can also be used to purchase specialized dairy processing equipment and supplies, hire professional marketing and branding services, improve food safety, and cover contract fees directly associated with establishing a new co-packing relationship as part of a start-up project. Routine operational expenses for the applicant or co-packing partner are not eligible. 

Awards 

Grants will range from $15,000 to $150,000 with a 25% cash and/or in-kind match contribution. Approximately $1,100,000 in total funds are available.

Eligibility

Grants are available to applicants in all 11 Northeast states served by NE-DBIC: Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.  

Applicants eligible for these funds must currently be one of the following:

  1. Licensed Dairy Processors: The applicant must be a licensed dairy processor that:
    • Transforms raw fluid milk, dairy components, or dairy mix into an edible product meant for human consumption.
    • Holds a license that permits the sale of their dairy products across state lines, even if they are not currently doing interstate sales. 
    • Is headquartered or based in the Northeast. 
    • Sources or produces milk or dairy components from within the Northeast. 
    • Manufactures products within the Northeast. 
  2. Dairy Brands Currently Utilizing Co-Packing Services: If the applicant is a private dairy brand seeking to expand co-packing services, they must:
    • Provide two Letters of Commitment (LOC): 
      • One LOC from a licensed farm or licensed dairy processor confirming the source of milk or dairy component needed to expand. 
      • One LOC from the partnering co-packer confirming their commitment to process the product for the brand. 
        • The co-packing partner needs to meet the eligibility requirements of a licensed dairy processor above. 
    • Provide proof of market readiness. Acceptable forms of proof of market readiness may include: 
      • Market research that shows consumer demand or trends for similar products in the target market. 
      • Sales data or projections that demonstrate consumer interest. 
      • Documentation of prior sales or established distribution channels.  
      • Letters of Commitment or interest from potential distributors, retailers, or customers confirming their willingness to purchase the product. 
    • Demonstrate ownership of the product, which may include: 
      • Trademark registration or intellectual property documentation. 
      • An agreement or attestation confirming their exclusive right to the product’s recipe, branding, and distribution. 
      • Evidence of prior sales or established marketing for the product.  
  3. Dairy Brands That Will Start to Utilize Co-Packing Services Through This Grant: If the applicant is a private dairy brand initiating a new relationship with a co-packer, they must:
    • Provide two Letters of Commitment (LOC): 
      • One LOC from a licensed farm or licensed dairy processor confirming the source of milk or dairy component. 
      • One LOC from the partnering co-packer confirming their commitment to start processing the product for the brand. See specifi 
    • Provide proof of market readiness. Acceptable forms of proof of market readiness are listed above. 
    • Demonstrate that the relationship will result in a new co-packing arrangement for the brand. 

Definition of a Dairy Brand: A dairy brand is a private business that develops and markets dairy products but may not operate its own processing facilities. Dairy brands often contract with licensed dairy processors, such as co-packers, to produce their products. Unlike farmers, who primarily focus on producing raw milk, dairy brands own the rights to their products’ recipes, branding, and distribution. Farmers can serve as project partners for dairy brands or licensed dairy processors but are not eligible applicants for this grant. 

Definition of a Dairy Component: A dairy component refers to any ingredient derived from milk that is used in dairy product manufacturing. This includes raw fluid milk, cream, butterfat, milk powders, whey, or other milk-derived ingredients that contribute to the production of edible dairy products. 

How to Apply

  • Review the full Dairy Co-packing Grant Request for Applications (RFA) for the complete details on eligible projects/applicants and the application process.
  • Register in WebGrants (may take up to two business days).  
  • Once it is open, complete your application in WebGrants using our Application Guide. This grant opportunity is currently closed.
  • Applicants who do not already have a Unique Entity Identifier (UEI) through SAM.gov are strongly encouraged to start this process during the application period to ensure a timely start to their grant, if awarded.  

Have a Question about this Grant? 

Have a question? Contact Ali Boochever: ali.boochever@vermont.gov | (802) 261-5740, or book an appointment to talk.

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