- Post Holdings plans to spend $86 million to construct a new 215,000-square-foot manufacturing facility in West Jefferson, Ohio, according to a press release. The project is expected to create 200 new jobs during the next four years.
- The facility will likely produce protein drinks for Post's majority-owned BellRing Brands, which oversees the Premier Protein brand. The centralized location will help BellRing better serve customers in North America and meet demand in the fast-growing protein beverage category, the company said.
- The new Post facility would continue a series of new construction projects announced by food and beverage manufacturers in recent months as they look to boost production, especially for products in fast-growing and trendy categories.
As consumers pay even more attention to health and wellness, a shift that has gained momentum during the ongoing pandemic, brands like Premier Protein are poised to see additional demand for their offerings. A new facility would allow BellRing to meet shopper interest for Premier's shakes and powders, as well as potentially some of its other brands including PowerBar, Joint Juice and Dymatize.
In some ways, Premier Protein has become a victim of its own success. Post CEO Rob Vitale said last month during the company's fourth-quarter earnings call that the brand posted strong growth, with consumption up 30% during the summer. But he noted that similar to Post's Bob Evans frozen sides, "capacity constraints are limiting brand metrics."
Food companies such as Post and BellRing have been scrambling to increase output across a host of areas in order to meet heightened demand. Data compiled by Food Dive show half of the states in the U.S. have seen at least one new food industry facility this year.
It's not just better-for-you brands that have seen an uptick in demand. In November, Mondelēz International announced plans to invest $122.5 million to boost capacity at its Richmond, Virginia, location that included the installation of a high-speed production line for Oreos. A week earlier, J.M. Smucker said it would invest $1.1 billion to build a new manufacturing facility and distribution center in Alabama to produce its Smucker's Uncrustables sandwiches.
Post's purchase of Premier Protein in 2013 for $180 million has proven to be a shrewd investment given the healthy trends that have infiltrated the food space since then. In his 2021 annual letter to Post shareholders, Vitale said Premier Protein, with only $18 million in earnings before interest, taxes, depreciation and amortization at the time of the purchase, had been "a great product and a so-so brand."
Post, which took BellRing public in 2019, plans to distribute a significant portion of its stake in the company to Post shareholders in early 2022. Nearly a decade after it was acquired, the once "so-so" Premier Protein brand stands to be a major part of BellRing's future.
Other major CPGs are devoting more attention to their healthy beverage brands. PepsiCo's Evolve, a maker of plant-based bars, shakes and powders that uses pea protein, was overhauled in March with new packaging, advertising and flavor profiles to raise brand awareness. PepsiCo purchased Evolve as part of a $465 million deal with Hormel Foods in 2019 that also added Muscle Milk to its portfolio.