Exclusive: FedUp Foods expands manufacturing capabilities with Wilmington plant, prepares to move into cold-brew coffee

The Wilmington facility will be FedUp Foods third manufacturing plant, which once fully operational will produce over 200,000 barrels a year across its current functional beverage capabilities, including kombucha and fermented prebiotic and probiotic sodas, a representative with the company told Food FoodNavigator-USA. 

FedUp Foods​ financed the expansion through a mix of company savings, reinvestment of operational efficiencies gained, and some debt, the representative added. 

“The way that we have managed our own growth is really through investing slowly and deliberately and thinking really long-term and not trying to overextend ourselves to take on more debt than we can handle or work with investments that require a short-term return. We are really intentional about how we do things like this expansion project because we want to build something that's going to be successful and sustainable,” said Andreas Schneider, co-founder and VP of sales of FedUp Foods. 

Tapping into demand for a ‘premium product at a lower price point’  

With the new manufacturing facility, FedUp will lay the foundation for expanding into cold-brew coffee, a category that can benefit from the company’s mission of promoting regenerative agriculture and sustainable ingredient sources, Schneider explained. 

The global cold-brew coffee market is expected to grow from $3.16bn in 2024 to $16.22bn by 2032, growing at a 22.67% compound annual growth rate, spurred in part by the increased prevalence of at-home coffee drinking occasions, according to Fortune Business Insights.​

“Behind oil, sugar, tea and coffee are the three major commodities that get traded in the world, and we already do a lot of work with sugar and tea through the kombucha business and for us, being able to engage with coffee growers and engage with regenerative agriculture and what is happening in coffee was really interesting," said Schneider.

While ready-to-drink (RTD) cold brew coffees are widely available on the market today, private-label options have largely not yet tapped into that growing demand, Schneider noted. 

Schneider added, “We see a chance to fill a gap on the shelf with a premium product at a lower price point. I think that is always what we are driving for — is there continued growth in the category? The top brands are really doing well. They are carving out a nice space for themselves. And I think for us, we are trying to help people afford something and expand the market a little bit by having something that is a little more accessible.” 

Leveraging private-label scale to create an environmental impact

FedUp can use its scale as a food manufacturer to unlock sustainability benefits in the supply chain and develop products that resonate with consumers, said Zane Adams, executive VP of strategy for the company.

A single brand might have a hard time purchasing a large amount of coffee, but FedUp can more easily purchase large quantities given its scale, Adams explained. Additionally, the manufacturer can dedicate more of its resources to developing functional better-for-you beverages, since it does not have to worry about the costs of branded products, he added. 

“We are not having to reallocate 40% towards all of the lights and glamour and excitement of what a branded opportunity will be and really focus that energy and intention into really good sourcing, think about packaging, think about ways to make it better in terms of access to retailers and even potentially brands that do not have a good opportunity to work with a supplier,” Adams said.