Below is the latest edition of Modern Retail’s Supply Chain Weekly newsletter, which goes out on Mondays at 10 a.m. ET, and dives into all things logistics and supply chain during a tumultuous time for the retail industry. To receive this weekly in your inbox, click here.CPG manufacturers in the U.S. are sitting on excess capacity that’s just waiting to support a new wave of brand growth.
Keychain, a platform that connects brands with manufacturers, released its 2026 CPG Intelligence Report this week, which included a survey of over 1,000 CPG manufacturers. Results showed that one major theme they’re grappling with is significant overcapacity: About 1 in 10 factories is running more than half-empty, and about 1 in 3 has at least 31% of its production capacity unused.
“You have more machinery and more people available to run it, but very few factories are running 24/7. Most are running one to one-and-a-half shifts a day,” said Keychain CEO and founder Oisin Hanrahan.
How did we get here? Hanrahan said it’s partly a result of investments made six to eight years ago, when manufacturers took advantage of 0% interest rates and tax breaks to build out their products. Then Covid-19 arrived, disrupting overseas options and consumer behavior. Hanrahan said that time led manufacturers to invest in more capacity to meet forecasted demand.
