Nellson investing up to $50m in new-build bar facility in California

By Vince Bamford contact

- Last updated on GMT

Value sales of nutrition/health bars have risen 5% this year. Pic: © iStock/Hi-Photo
Value sales of nutrition/health bars have risen 5% this year. Pic: © iStock/Hi-Photo

Related tags: Investment, Chief executive officer

Nutrition bar manufacturer Nellson is to invest up to $50m in a new production facility in California.

The business – which makes branded and private-label products - is to replace its aging factory in Irwindale, CA, with a new-build facility that will be located in a site secured in nearby Ontario, CA.

Nellson said it had spent months reviewing options for the Irwindale factory, and establishing what would be required to revamp the facility to meet the evolving needs of its customers.

We concluded this goal can be better accomplished by building an entirely new facility, rather than retrofitting the current location​,” said Nellson chief executive officer Jamie Better.

Operational in 2018

He added that the new facility – set to be operational in the first quarter of 2018 – was being located close enough to the former site that the business could retain its experienced workforce and “all their bar-making expertise​”.

Nellson said features of the new 300,000 square feet site – which will require an investment of between $40m and $50m – will include:

  • Increased capacity and expansion space to support future growth
  • ‘State-of-the-art’ R&D lab
  • Segregated production lines to provide brand confidentiality and allergen control
  • Additional process capabilities for new product formats and shapes
  • New packaging capabilities to support on-trend consumer demands

The announcement of the new factory follows the business making a $15m investment to expand capacity and upgrade operations at its site in Lachine, Canada. Nellson has also spent $10m upgrading its nutrition powder plant in Anaheim, California.

Better added that the decision to build the new plant in Ontario, CA, was the next step in the company’s “aggressive transformation​” since being acquired by New York-based private equity firm Kohlberg in August 2013.

Overall value sales of nutrition/health bars grew 5.3% year on year in the first six months of 2016, according to IRI data. See table below.

NUTRITION/HEALTH BARS

Year on year performance. Source: IRI year-today July 10, 2016IRI is a Chicago-based market research firm (@iriworldwide​) 

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