US FMCG Manufacturers Reconsider Reshoring Amid Shifting Global Dynamics
Reshoring initiatives among US-based FMCG manufacturers are gaining renewed attention as geopolitical tensions and supply chain vulnerabilities push companies to reassess global production strategies. However, cost factors, labor shortages, and infrastructure gaps continue to temper the industry’s ability to bring manufacturing back home at scale.
Reshoring—once accelerated during the COVID-19 pandemic due to global supply chain disruptions—has not consistently materialized into large-scale domestic production. While FMCG companies remain cautious, many are rebalancing operations by diversifying manufacturing bases rather than fully exiting offshore locations like China.
According to recent industry analyses, manufacturing in the US can cost up to 30% more than in China, making cost-efficiency a key barrier. Additionally, automation in domestic facilities requires significant upfront investment. For CPG brands operating on tight margins, these financial constraints remain a major consideration.
Labor availability poses another challenge. While the US labor market remains tight, certain FMCG sectors, including food processing and packaging, struggle with talent shortages. Conversely, regions such as Mexico and parts of Southeast Asia offer a balance of cost-efficiency and skilled labor, making them increasingly attractive nearshoring alternatives.
Nevertheless, select FMCG categories have seen moderate reshoring momentum. Health-focused and premium goods—such as organic food, personal care, and dietary supplements—have shown potential for domestic production where speed-to-market and quality control are crucial. These segments benefit from shorter supply chains and increased consumer scrutiny over product origins.
Government incentives are also influencing company decisions. US federal initiatives and state-level tax breaks are beginning to make domestic manufacturing more viable in regions prioritizing advanced manufacturing and clean energy integration, creating synergies for sustainability-minded FMCG brands.
Reshoring is unlikely to be a one-size-fits-all solution for FMCG firms. Instead, the trend points toward a hybrid model that leverages a mix of onshore, nearshore, and offshore production to optimize cost, resilience, and consumer responsiveness.
As FMCG manufacturers navigate this transition, strategic supply chain planning and investment in automation and workforce development will be critical to gaining competitive advantage in an increasingly fragmented global trade environment.