ReScale, a Boston-based startup spearheaded by former Trader Joe’s executive Julia Megson, has officially emerged from stealth mode after securing $2.3 million in funding led by Baukunst. This financial backing, which also includes support from Dartmouth Angels and several angel investors from the consumer packaged goods (CPG) sector, aims to tackle a significant challenge faced by small and medium-sized CPG brands: the complexities of sourcing, negotiating, and managing external manufacturing partnerships.
Megson, who serves as CEO, emphasized the urgency of this issue, stating that many brands with revenues under $100 million struggle to find co-manufacturers capable of producing their products. “Finding a contract manufacturer is still mostly done by word of mouth,” she noted, highlighting the outdated methods that dominate the industry. With approximately half of small- and mid-sized food brands relying on white label manufacturers, the process of sourcing new manufacturing partners often feels like starting from scratch for each new product. “We spoke to hundreds of brands that all said it’s their biggest problem. It’s a mess,” Megson added.
ReScale’s platform aims to streamline this convoluted process. The startup’s dashboard is designed to help brands expedite product launches by simplifying the steps involved in manufacturer matching, contracting, and ongoing management. Early adopters of ReScale’s services include a restaurant chain distributing products through Target and a venture capital-backed hot sauce brand that boasts a presence in over 2,000 retail locations. “For rapidly growing food brands, scaling manufacturing and production is an opaque, complex, and time-intensive process,” remarked Matt Thoms, general partner at Baukunst. “ReScale solves these problems.”
The startup’s approach is particularly timely, as many brands still rely on traditional methods such as trade shows and networking to identify potential partners. Megson pointed out that even Trader Joe’s, a major player in the private label market, employs similar tactics. “Food and beverage manufacturing is really offline,” she explained. After her tenure at Trader Joe’s, Megson worked as a consultant for emerging CPG brands, which exposed her to the challenges these brands face in securing manufacturing partnerships. This experience ultimately inspired the creation of ReScale.
ReScale’s platform, which is set to launch officially in the coming weeks, consists of three primary components. The first is a comprehensive search tool that has already identified around 9,000 potential co-manufacturers suitable for emerging CPG brands. The second component features user-friendly tools akin to TurboTax, guiding brands through the onboarding process with co-manufacturers. This approach aims to demystify the often convoluted requirements associated with manufacturing partnerships. The third component is a dedicated customer support team comprised of industry veterans who can offer expert advice without the hefty price tag of traditional consulting services.
To ensure the accuracy and reliability of its database, ReScale employs a combination of web scraping, artificial intelligence, and self-service profile updates from manufacturers. Brands can filter their searches based on various criteria, including product type, geographic location, and necessary certifications. ReScale generates revenue through monthly SaaS subscriptions for brands seeking to find contract manufacturers.
As brands navigate the complexities of securing manufacturing partnerships, ReScale also offers tools to automate the exchange of crucial documents such as non-disclosure agreements and requests for proposals. This automation helps streamline the negotiation process and allows brands to seek guidance on bids from ReScale’s advisory team. Megson noted that the platform’s services extend beyond initial searches, addressing potential pitfalls that could lead emerging brands into “predatory situations” or unfavorable contracts.
With plans to expand its offerings to include connections to legal experts and additional service providers, ReScale aims to create a more transparent and efficient ecosystem for CPG brands. By addressing the critical pain points in the manufacturing process, ReScale is poised to become a valuable resource for small and medium-sized brands striving to scale their operations effectively.