Insight:

Lego is getting ready to break ground on its first factory in the U.S.

The company has a facility in Monterrey, Mexico, which currently supplies the U.S. market. But, the upcoming facility in Virginia will help support the company’s long-term growth plans in the Americas.

“Our factories are located close to our biggest markets which shortens the distance our products have to travel,” Carsten Rasmussen, Lego Group’s chief operations officer, said in a statement. “This allows us to rapidly respond to changing consumer demand and helps manage our carbon footprint.”

Indeed, the brand’s supply chain strategy helped it particularly during the height of the pandemic. While much of the retail industry was beleaguered by delays and delivery disruptions, Lego’s strategy of building factories in key areas resulted in a shorter supply chain.

Lego does “a better job of nearshoring their production to the market where it’s going to go,” James Zahn, deputy editor of “The Toy Book,” said in an interview with Retail Dive this spring. “They’re not being transported to the other side of the world. Lego has a better supply chain, just in general,” he said.

The new facility will emphasize carbon neutrality and will be designed to minimize energy consumption and the use of non-renewable resources. All of its daily energy needs will be matched by renewable energy through an on-site solar park.

Lego Group also announced an expansion of its factories in Europe and China. Besides Mexico, the company also has factories in Denmark, Czech Republic, Hungary, China, and Vietnam.