LITTLE GUYS, big guys and guys of every size are reimagining the ways that their skin care formulas, laundry detergents, cosmetics and cleansers get produced. Well-known household and personal product manufacturers are scaling down their
manufacturing operations, opting to outsource production to
contract manufacturers. Startups get off to a good start by focusing on what they do best and leaving production to experts. Big
or little or somewhere in the middle, a move to contract manufacturing is a move that saves money, time and a lot of headaches.
A lot of heartache, too. Everyone realizes that e-commerce has
changed retail forever—and not just for retailers. Companies that
can adapt and change to this new reality have a chance to make
it; those that can’t may soon find themselves out of business.
“Amazon’s goal is to knock people out of business,” said
one industry executive.“Companies must be innovative or they
Steve Dawes, president, AIG Technologies, noted that many
entrepreneurs are foregoing the traditional brick-and-mortar
route in favor of the online format.
“It’s easier for them to move more quickly on their ideas without having to manufacture their own products,” he explained.
AIG goes further by offering to store products for on-demand
delivery and filling minimum order of just 50 gallons.
“That’s our niche. We give the entrepreneur the opportunity
to test the waters,” he added.
Whether startup or established player, both have specific
needs according to David Chung, CEO, Englewood Lab. He
pointed out that startups with small teams are definitely more
agile and nimble when it comes to creating new products and
launching a brand.
“The approval process is shorter since there are less people
making the decisions and giving feedback,” he explained. “(But)
there has also been an increase in established brands expanding
categories—skin care brands launching makeup and vice versa.”
GAR Labs got on-board with the e-commerce revolution ear-
ly on. CEO Tom Raffy noted that more new projects are sold on
Amazon versus traditional bricks-and-mortar operations.
“(We’ve expanded) our involvement with Google, via its
By Tom Branna • Editorial Director
From startups to multibillion-dollar businesses, FMCG companies are outsourcing
manufacturing operations to focus on what they do best.
Leveling the playing field. Startups can get a head
start by bypassing traditional retail and going
straight to the consumer via the online channel.