Industrial Maintenence and Plant Operations

“We don't have a lot of
overhead costs. It allows
us to be flexible.”
operates a product
development lab in
McComb that has
the capability of
handling all the lines
and products made
in all the Hearthside
plants across the
country. In addition
to the R&D facility,
the company has
added a smaller bar
test line inside one
of its Grand Rapids
facilities and a small
R&D facility in
Eugene.
McNamara sees
real growth in this
area of the food
industry “as people look to
where they want new ideas
for products to come from. A
co-manufacturer might have as
well-developed an R&D team
as a traditional manufacturer.
That’s evolving.”
Contract manufacturing
presents challenges beyond
meeting customer demands and
supplying the R&D necessary
to keep customer products at
their finest. Occasionally, when
customers see greater than
expected success with products
processed in co-manufacturing
facilities, the companies will
eventually choose to process
the products themselves, as the
cost of employing the technol-
ogy to do so is overshadowed
by the savings generated from
processing the products them-
selves. Though the contract
itself, which specifies terms
such as length of agreement,
provides a certain level of
stability to the contract manu-
facturing business, the ability
for food companies to opt out

added a fourth Roskam facility
to its stable.
With the exception of the
Golden Temple acquisition, all
of the Hearthside Facilities are
involved in the company’s pri-
mary focus, which is co-manu-
facturing bar and snack prod-
ucts for what McNamara calls
“premier food companies.”
Contract
Manufacturing
“We’re building a com-
pany and consolidating in
these categories — baking,
cookies, crackers, bars,” says
McNamara. “Companies look
to co-manufacturers. Small
companies look to us because
they don’t have the resources
to launch and commercialize
products. Big companies do it
due to the potential complexity
of a product or in categories
where the cycle of innovation is
such that they’d be continually
investing millions of dollars
every year to bring the product
to market. We built a company
in these categories that had
the scale for the premier food
companies to bring their ideas
to market.”
McNamara estimates that
Hearthside currently has over
100 contracts that govern their
business, with 80 to 85 per-
cent of the business devoted to
contract manufacturing. When
acquiring new businesses, in
many cases Hearthside also
acquired the clients previously
contracted with the facilities
being purchased.