Founders’ Fundamentals podcast shares strategies for enduring CPG brands

20-Nov-2024 - Last updated on 20-Nov-2024 at 14:56 GMT

Source: Getty Images/ isayildiz

Building a successful food and beverage CPG business often requires the right mix of ingenuity – knowing where the market is heading before it is there – and carefully expanding retail distribution while keeping an eye on margins, velocities and cash flow into and out of the company.

Over the last six months, FoodNavigator-USA’s Founders’ Fundamentals once-a-month podcast hosted discussions with food and beverage industry consultants, brokers, investors, marketers and founders, sharing strategies on building financially sustainable businesses.

In 2025, Founders’ Fundamentals will expand to air twice a month starting Jan. 8. The greater frequency means more interviews with CPG thought leaders and more in-depth discussions on topics crucial to startup success from fundraising and securing retail partnerships to deep-dives into market segments.

The Founders’ Fundamentals podcast will air a special end-of-the-year podcast Dec. 11 that will feature insight on how startups can succeed in the new year.

Iced tea vet Seth Goldman: ‘You always want to grow strategically’

To create a financially sustainable company, founders must prioritize capital efficiency by carefully selecting retail partners, as several Founders’ Fundamentals guests shared in separate interviews. This can be hard when major retailers come knocking, as sauce brand Tamarind Heads and United Soda of America shared in separate Startup Spotlight videos.

Eat the Change drove high velocities of Just Ice Tea by focusing on select retailers before expanding broadly in the market, Seth Goldman, co-founder CEO of Eat the Change and founder of Honest Tea shared in the first episode of the Founders’ Fundamentals podcast.

Recently, Goldman shared on LinkedIn that the company is set to make $20 million in revenue for Just Ice Tea across its 6,000 retail locations — the same amount that Honest Tea did 10 years ago with just 15,000 locations, Goldman noted. Goldman’s first ice tea brand Honest Tea sold to Coca-Cola before being discontinued in 2022.

“You always want to grow strategically, even when it is eventually with that later partner. … You may have the desire to go succeed in a Walmart — just because of the dollar opportunity — but when the time is right that will become apparent for a large retailer, and until that time just always be strategic,” Goldman elaborated.

Additionally, CPG startups should strategically expand their product line and not simply chase after all the on-trend flavors that hit the market, said CPG marketing consultant Karen Anderson, CEO of Purple Peak Marketing in episode six of the Founders’ Fundamentals podcast.

“When you look at Red Bull ... for years and years, all they had was Red Bull and light Red Bull. ... I say to clients all the time, there is Coke and there is Diet Coke. So, when you are looking to build out your portfolio, you really do not need a large number of flavors or products — go as deep as possible in your distribution of one to three SKUs before you start blowing out more flavors,” Anderson elaborated.

Jordan Buckner: ‘ Develop both the business and the brand side-by-side’

Resonating with a consumer often comes down to appealing to their practical and aspirational demands – the head and the heart – while making it easy to learn about a brand, Christy Lebor, partner and director of brand development at SmashBrand, told FoodNavigator-USA.

“If a consumer does not know what the brand name is within a second, what you are really doing with your new product launch or new brand launch is you are building the category, [and] you are not building your brand, and that is a problem. In the beginning, it could be good, ... but as soon as you start to get a little bit of success, you are going to have copycats. You are going to have me-toos,” Lebor explained.

However, startups cannot build a business on brand and packaging alone. They must understand the ins and outs of running a CPG business, including building a sales funnel with a focus on those initial fans, Jordan Buckner, founder of online CPG food and beverage community Foodbevy said, in an episode of the Founders’ Fundamentals podcast.

"A lot of founders are really excited about the branding portion and come up with a really cool name [and] a really cool website ... but there is not as much of a core business underneath that brand to be able to support it. It works very well at delivering that initial hype — either towards investors or consumers — but once that hype dies down there is no core foundation underneath to support the business. You really need to develop both the business and the brand side-by-side," Buckner explained.

Part of understanding the business side is knowing how to save money, which can include negotiating free fill cases and slotting fees from distribution agreements, Managing Director at Greenwich Capital Group Andrew Dickow shared during the third episode of the Founders’ Fundamentals Podcast.

“One of the smartest things early-stage companies can do — especially with retailers — is saying no to slotting fees and free fills. So, at an early stage, these retailers will ask you to do that, and you are just simply not in a position to do that early in your life cycle. Down the road when you have a stronger balance sheet or the company is a little healthier, you can. That is one of the best things to do is just avoid those types of relationships,” Dickow noted.

To listen to previous episodes of Founders’ Fundamentals and read a recap of each, please click through the below articles: