Factory, LLC Opens Up Manufacturing Arm

Factory, LLC’s name got a little more literal as the food and beverage investor and brand incubator opened up a 75,000 square foot co-manufacturing facility this year.

The new facility, located in Pennsylvania’s Lehigh Valley, began operations in Q1 this year and can currently manufacture powdered beverages and supplements, including sticks, tubs and boxes, but intends to be able to manufacture any powdered food or beverage format in the future. It will open up new lines to produce bars later this year, according to Factory managing partner Richard Thompson.

To create the co-packing site, Factory established a new subsidiary, Factory Manufacturing, and partnered with flavor and formulation house Allen Flavors and ingredient supplier AgroAmerica – which specializes in sourcing bananas, pineapples and other natural ingredients – to financially support the project.

“We just weren’t getting the service levels that we wanted, we weren’t getting the innovation that we were looking for, and we weren’t getting the pricing and the costs that we were trying to get in the marketplace,” Thompson said. “So with those three things, we just went ahead and pulled the trigger to build what we called Factory Manufacturing.”

Factory’s brand partners include hydration beverage brand Roar, marshmallow maker Stuffed Puffs, honey snacks company Honey Stinger and Pipcorn, among others. Thompson said the new co-packing site is already producing powdered lines for Roar and Honey Stinger, as well as powdered beverage brand Hydrant.

Thompson said the company opted to prioritize powder manufacturing (as opposed to ready-to-drink) as a bet on the future of CPG, noting younger generations “hate plastic” and also favor the ability to customize their drinks with reusable water bottles. He noted that the powder lines can cover a number of categories, including sports hydration, immunity drinks and more.

“As we see the trend trending away from individual-serving water containers, we think the hydration space in sticks, tubs and boxes is going to grow immensely,” he said.

As for bars, Thompson noted that other co-packer’s pricing for bar production has increased immensely and the minimum order quantities (MOQs) are high. He also criticized a lack of innovation in the bar category, which the new Factory plant will prioritize; the company intends to open two lines for bars, one focused on R&D and the other on production.

“We wanted to work on bars because we’ve got plenty of these smaller companies that come to us all the time looking for good innovation in the bar space,” he said. “I think there hasn’t been a lot of innovation, there have been a lot of Me Toos or tweaks, and so we think there’s an opportunity to do something there.”

Plans for the plant began about 12 to 14 months ago, and Thompson said Factory was able to get the project from conception to production thanks to his team’s experience in manufacturing and the support of Allen Flavors and AgroAmerica.

The facility currently employs 15 people full time running a single shift, but it will be hiring as second and third shifts are added, and when bar production goes online in the second half of this year.

Ultimately, Thompson said, the addition of a co-packing site is another tool in Factory’s belt as it looks to become a one-stop shop for the brands it partners with, adding manufacturing alongside innovation, strategy and package design. While the company will contract manufacture for brands it hasn’t invested in, Thompson said they will prioritize brands they’re interested in forming deeper partnerships with.

“We’re looking at co-packing for other brands that we might invest into, because obviously that’s kind of the target we’re looking for,” he said. “We don’t really want to just become a clear co-packer, we’d like to be – let’s call it a ‘Co-packer with benefits.’”