Pouria Garrett

I’ve had 3 journalists reach out this week looking for perspective on the “state of CPG”. The underlying question seems to be: how bad is it? My thoughts: things were easier in 2020, 2021. Yes, capital was widely available. But the consumer was also ripe and ready to spend on goods (more time at home, stimulus checks, and new exposure to CPG through social channels). Acquisition costs were lower. Maybe most importantly there was a general sense of optimism, and a belief, that brands could grow to be big and category-leading (no matter how much $ they were losing), with less consideration for fundamentals. Goes without saying, there’s been a major shift in sentiment from investors and retailers - now more cynical - and we’re coming down from an intense high. It can’t be overstated just how much of a hangover we’re experiencing. It's not only harder to grow and sustain your business (in major contrast to 2 years ago) but it’s, arguably, not as fun. So many people have lost the belief that you can build something out of nothing, create a habit that was never there before, become indispensable in people’s lives without them even knowing they needed it (hi, Bachan's). The hangover clarifies what always mattered: fundamentals, resilience, discipline, patience. And the founders that will win are those that work through the short-term pessimism, double down on their value proposition, and execute. Shout out to Athletic Brewing Co. as a great example of resilience and category definition throughout the boom and bust.

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Talking with my friend and consumer/CPG investor Scott Caras this morning. He sees hundreds of pitches from emerging CPG brands every year, and has invested in and sold some awesome brands like Grillo's Pickles and True Botanicals. "The thing that so many companies are missing is an actual strategic plan, backed with numbers, about what the company is going to look like over the next 3-5 years, and the prioritized initiatives that it will take to get there. Having that or not having that is a kind of a game-changer when talking to investors. It shows a level of thoughtfulness about the business that separates certain teams from others and makes an investor a lot more comfortable." My takeaway: Investors are OK with taking some risk - that's literally what they get paid to do. It's your job as a founder/exec to help them understand the risks that you plan on taking, and why those risks will produce an upside outcome for you both. P.S. - We're cooking something up with Olivia Gold aka the OG of strategic planning on this one very soon...stay tuned.

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🚨The Robots Are Coming for CPG Marketers AI is on the rise, and some fear it will replace human marketers altogether. Good thing I’m in sales! 😌 Kidding. I don’t think robots are coming for CPG marketers. But tech definitely will. CPG brands have started to disrupt customer relationships. They’re employing tech to make their promotions even more effective. — Brach's Candy Corn: A sweepstakes that generated excitement for their first ever candy corn club — Buffalo Wild Wings x Bud Light: Giveaways with instant rewards that drove foot traffic and brand loyalty. — Stella Artois: An instant win sweepstakes that grabbed attention and increased brand awareness. If you're in retail and you're not leveraging sweepstakes, instant rebates, and targeted marketing campaigns… You're missing out on a golden opportunity to connect with customers and drive sales. Get on board or get left behind. 🚀 Are you using tech to drive your sales and engagement? How is it so far? #CPGmarketing #LoyaltyPlatform #sweepstakes #instantwin #customerengagement #retailtech

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I have worked extensively across the CPG brand life cycle…from dying zombie brands (Triscuit in 2007) to hyperbolic, DTC growth engines like Dr. Squatch. Here’s the weird thing I’ve discerned. Your team is most in control very early on. Every move has enormous impact. One small-ish seeming operational mistake could lose your only national distribution slots and end you. Once you are $500M and above..the obsession with control only grows in intensity but now exists in inverse proportion to your actual control over demand. This is why enormous humility is required at both stages…but for different reasons. Startup humility is about surviving the roller coaster of your own ignorance and ego. Moving fast and learning fast. Midmarket humility is about tweaking what little you really control in a business driven mostly by consumer behavior and retail ecosystem shifts. And disciplined, almost pessimistic, skepticism… Do not hire folks who just lived in the latter fish bowl for your startup. No matter how cheap they come. Do you see why?

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Posted one week ago about building a consumer software / CPG community here in Atlanta. The list that was 10 names long 7-days ago, is now almost 40 people and growing. I ask that if you know of anyone, please keep referring them. I have spoken to hundreds of consumer founders over the past 3 years, there is one common theme, they have no one to ask questions to and lean on for advice. At Hatched® Dating we do not view other consumer software / CPG companies as competition but friends. We can grow together! #consumersoftware #consumer #consumerproducts

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Harsh truth for early-stage alcohol and CPG brands: All revenue is NOT created equal. Here's what I mean 👇 Retail revenue is a function of velocity (how quick your product sells) X points of distribution (how many doors sell your product). Velocity is really the key metric most brands should be focused on, but it's of course only half of the equation. It IS possible to brute force your way to more revenue by opening more doors. But unless you can execute incredibly well and drive high, predictable velocity across nearly all of these doors, it may be a mistake to do so. Upholding strong velocity is the key. Here's the punchline: There's a big difference between doing $1mm in a controlled number of states/points of distribution with STRONG velocity versus $1mm in a vast number of accounts with weak velocity. $1mm in less accounts with strong velocity is almost ALWAYS better. Strong, predictable velocity is a foundation for scale and growth. This is the way! 

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Is your head buried in CPG campaigns? I feel you and know how to help. We created AirBaton™ with all of you in our thoughts because we’ve been there. If you’re a: 🦤CPG brand manager 🦤marketer working in or with CPG agencies 🦤fellow sales guy in beer marketing, CPG or retail… And you’re overwhelmed with everything on your plate… Let’s talk! I have some ideas that could help you clear your days for much-needed time off. You still have half the year to make this happen! 😉 #cpg #marketing #vacation

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I started at MarginEdge 90 days before the pandemic. I was figuring out a new industry and totally new type of marketing in a time where uncertainty was high and the learning curve steeper than I could have imagined when I signed that offer letter. The situation created a B2B marketing crash course of sorts, which would have been far more “crash” if it weren’t for people like Joe. Joe and I met every quarter - virtually at first and then over lunch. It was invaluable to have someone who could relate to what I was navigating and I was the incredibly grateful recipient of his wisdom and insights. I have benefited so much from Joe’s experience and when I think of voices that need to be amplified in our space, his is at the top of the list. Joe just launched the Zero to Twenty podcast aimed at empowering early stage, B2B marketers with the same Joe-magic that I got to experience over countless lunches and calls. When he asked me to on it I said yes before he finished the sentence. I love this episode. It captures so much of the hard-earned lessons that we’ve uncovered over the years but I mostly love it because it captures so much of the magic Joe brings to a conversation. If you are, or know, someone navigating marketing in an early stage startup - this podcast is a must-subscribe. If you want to feel like you’re at the table at Unconventional Diner with me and Joe, exchanging ideas and learning from each other, this episode is a must-listen. And I feel like I can’t make this post without acknowledging the courage it takes to create content, especially content you care about. Joe’s step into this space is so needed and his voice in this choir is one of the best - but creative endeavors take a healthy dose of vulnerability and require an even healthier dose of support. Please subscribe, listen and share with those who might benefit. He’s the best and I’m thrilled he has this platform to share his wisdom, insights and magic. https://lnkd.in/eQjcFEM2

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Have you ever wondered why giants like PepsiCo, Google, Microsoft, and Apple are constantly collaborating with or acquiring startups? As part of my role as GM of PepsiCo Labs,a big part of my job is to identify the needs and challenges in the business that can be solved with emerging tech and take action to address them. It is safe to say that enterprises have a lot of resources. However, they often lack the agility that startups inherently possess. Startups, on the other hand, are innovation powerhouses, unburdened by legacy systems or hierarchical decision-making. They move fast, pivot quickly, and bring disruptive ideas to the table. Enterprises that crack the code on successfully embracing startups infuse this dynamic spirit of innovation throughout their expansive, established business operations, leading to leapfrogging ahead. Startups and enterprises complement one another with their unique strengths while solving each other’s problems. After reviewing thousands of startups and collaborating with hundreds of them successfully, the magic is real. A real-life example of this magic is Bringoz Bringoz is a last-mile orchestration and optimization platform. They bring visibility and effectiveness to our frontline. They have cutting-edge technology, we have the scale. Together, we are improving the daily operations of thousands of associates. #InnovationPartnership #Startups #EnterpriseCollaboration

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🌶 Hot take: The mandate that CPG founders MUST build to $100M+ in sales to be an attractive M&A candidate for a strategic is misleading. For *many* this thinking can drive the wrong behavior. Behaviors that we saw in the 2021 ZIRP environment. Even if strategics are buying bigger and less often, great outcomes can and are occurring for highly profitable businesses that don’t cross $100M. 🧠 Logic: CPG founders are often anchored on a common long-term KPI: reaching $100M in sales. Even if this is what investors are underwriting, it’s the wrong way to think about what CPG scale means. I spent ~5 years within the finance/strategy organizations of PepsiCo, Danone, and AB InBev. No one is sitting around with a radar detector for brands that reach a specific sales threshold. Strategics split their organizations into sectors and subsectors (categories and subcategories) typically based off geography and product category. 1/ Big CPGs aim to build strategic portfolios (organically and inorganically) within their subsectors of focus that are constantly evolving to meet consumer needs 2/ Big CPGs are trying to drive organic top / bottom line growth by executing an optimal resource allocation strategy BUT they are also competing for MARKET SHARE. When they assess inorganic acceleration opportunities for their portfolios (aka M&A/JVs), they look for emerging or “emerged” brands in subcategories of interest that are: 1️⃣ Sizable enough to drive a MATERIAL MARKET SHARE gain or deceleration of MARKET SHARE loss immediately or in the future. 2️⃣ Profitable/cash-flow generative enough to be accretive or in line with an internal profitability/cash flow benchmark. Ideally the target is highly incremental to the CPG’s existing portfolio of brands with room for further growth in a variety of distribution channels. What defines material market share for an emerging brand? In my opinion anywhere between 0.5-2%+ (no right answer). ESPECIALLY IN PERSONAL CARE in which we’ve seen some brands recently bought for an est. >5x revenue (K18 Hair, Dr. Barbara Sturm), clipping $50-$75M with great margins could equate to a $300M+ exit (the “average successful exit” in CPG). In the $110B soft drinks space (Statista), crossing $100M (just 0.1% share) might not be enough (Oli/Poppi) Main point: build a profitable business that captures material market share of your category, not necessarily a $100M+ business… BUT hopefully, you find yourself doing BOTH 🚀 And one watch out for founders (hopefully not new news): If you’re a later stage company that is on track to achieve a share position in your category that would position you as an “attractive” M&A target for a strategic be extremely vigilant of the terms surrounding any new growth capital. Waiting too long to sell can be a painful mistake but even more painful is when your new PE partner mandates a pathway to 3x MOIC to approve a liquidation event and you’re far from leaping that hurdle.

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I recently learned that gurus and people covering CPG news don't view distribution gains as an indication of a brand or founder's success. Rather, the velocities within these distribution gains are THE STORY and THE BAROMETER. Ok, fair enough. But if this is generally recognized as true, how, on the other hand, can the same people celebrate the 1000th launch of an obscure product/brand in squiggly sans serif font that has a TAM of $100? How does THAT indicate success? Why is this happening? How can folks say that they support founders, yet demean their wins? It's puzzling. We are the ones signing up for your newsletters. We are the ones paying to be part of your communities. For example, I've been turned down multiple times by investors that require a more robust authorization pipeline. I get that. And I've executed against that feedback. This summer will be a clear indication of that. But if authorizations/horizontal growth don't indicate success, what does? Ok. Velocity. Velocity does. Perfy is doing 1000 cases per week in only 68 doors in under 2 months of being live in a region with a new DSD partner. I don't have a merchandising team. I haven't visited the region. I haven't done ride-alongs. I haven't done store visits How is that possible? And do these velocities indicate success? What about our QFC launch? We did 795 cases in 84 days, and for 2 weeks of that, we couldn't even deliver the product to our DSD. What about our Roundy's launch? Our 4-pallet initial order jumped to 12 pallets on the re-order in under 5 weeks. We are also the number 1 product in the New Beverage Discovery program. Does this indicate success for the investor and also the spectator? Or where is the goalpost going to move to now? Also, Thank you to the people who actually cover distribution gains and give founders and teams their flowers. For Perfy, it has consistently been BevNET.com, Inc. (Brad Avery / Monica Watrous) and Foodbevy (Jordan Buckner). Lastly, in this economic climate, if your brand is still going, congrats. You're winning, and I'm pumped for you. YOU ARE A SUCCESS. So celebrate those distribution wins, and pay no mind to the spectators. You're Perfy, Vasa

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Speed of learning is one of the most important founder attributes — and sometimes that means getting support to move faster. I’ve seen folks like Carol do just this and unblock founders and their early growth. It’s powerful to ask for help!

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Just because many CPG companies are adding celebrities as co-founders doesn’t mean you should. The growing trend of celebrity-backed/founded brands can lead to market saturation, diluting uniqueness. Additionally, your brand can become too dependent on that celebrity. What if you are partnering with an actress, and she is shooting a movie for the next two months? What if she is negatively in the news? Are the benefits of lower customer acquisition costs worth the risk? It is definitely for some brands, but for many other brands, it is not. 

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Went through the Ibotta, Inc. S-1 today after a great market opening for the company Sharing 3 quick takeaways I thought were interesting for the CPG landscape 1. CPG need for offline trial: It has gotten consistently more expensive to get a consumer to try a product for the first time — iOS14 only accelerated a trend that was happening either way The brands that have persevered with sound unit economics typically have VERY high AOV ($50 minimum, typically much higher) to cover the high cost of acquisition and shipping For a CPG product that is very high barrier to trial — often it means forcing a consumer to buy 10+ servings without knowing if they like it or not If they could buy 1 unit at the grocery store and liked it, they might come back on subscription / or high $ reorder driving LTV Problem is paper couponing is clunky, inefficient, imprecise, wasteful and full of adverse selection that makes it pretty useless for premium BFY brands Ibotta exists to solve this problem 2. Ibotta is ripping: Grew 52% off a $211m base in 2023 with 26% EBITDA margin and is still minimally penetrated They just onboarded a big partnership with Walmart to power Walmart’s loyalty program (Walmart cash) and have their eye on other key retailers (starting with Kroger) S-1 is full of nuggets on the power of the CPG ecosystem, offering a barbell of fragmented brands and retailers with largely non-discretionary purchases and mountains of data CPG is SO BIG and this ecosystem is a huge rising tide 3. Ibotta is still an imperfect system: Redemption requires either post-purchase receipt scanning or consumer refund $ being housed at the retailer (rebate for Walmart cash not cash cash) This is high consumer friction (and perhaps adverse selection) Ibotta claims this is a feature for retailers (it’s a loyalty program with great working capital) but it still locks out a powerful use case: Brand partners with creator to advertise free unit of brand at retailer without consumer going out of pocket Basically a single-unit product giveaway with targeted distribution Targeted promotion, data-rich feedback loop, low-friction for consumer Look for this to be a key area of innovation for Ibotta (and competitors) Key for challenger CPG brands to get CAC down is digital promotion driving physical trial with high precision and high data visibility

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LiveRamp CFO Lauren Russi Dillard joined the PYMNTS "Day in the Life of a CFO" series to discuss why financial leaders should forge more strategic partnerships across the enterprise to navigate today's complex business environment. “We exist for our customers, and if we take care of our customers, the rest falls from there. The finance team’s customer is the business itself. It is a constant that has only become more important.” Watch Lauren's interview to learn more about how CFOs can excel by remaining nimble and leaning into data:

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Today's nugget: Make your creative and messaging stronger. That's the holy grail that will drive recall & tap into the consumer's need & move them to purchase eventually. This is primary. Optimizations, frequency, reach, impressions, etc... mean zilch if your creative isn't strong. Period. #MediaBuying #DigitalMedia #Branding #MediaPlanning #Consumers #Marketing #Performance #Brandformance

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I'm curious how my marketing friends have deployed GenAI in their organizations beyond simple content creation and email/SEO/Web. Full ABM predictive analytics? https://lnkd.in/eFYMQWeN #marketing #ABM

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Spicy Mustard VS Special sauce. Tech companies often want to create a new category because their products feel unique. However, positioning experts advises against this. "You should almost always anchor your product to an existing category," they say. Pitfalls of creating a new category: 1. No existing demand to tap into. 2. Low product understanding. 3. Mixed buyer profiles. The takeaway: Disrupt an existing category instead. For more, check out Growth Unhinged (https://lnkd.in/evxjWjfv) Subscribe to ‘Siliconnector’ Telegram channel for insights and news from Tech world and Silicon Valley: https://t.me/siliconnector

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Could a retail model like Foxtrot work at scale? What's the future of plant-based meat? How should CPG brands think about channel strategy? On the latest The Consumer VC, I chatted with Ashley Hartman & Andrew Bluestein from Bluestein Ventures. Bluestein Ventures invests in the future of food. Some of their early investments includes New Culture, meati™, Vive Organic, Bizzy® Cold Brew, Foxtrot. They are fresh off raising a $45 million fund 3. We discuss: • Going from family office to VC • Differences & similarities investing in inventory and technology businesses • Could the Foxtrot model work at scale and be venture backed? • Retail Reinvention and the Future of Convenience Stores • Future of plant based meat and food tech • Trends in food industry digitization & much more To listen and be the first to know when a new episode drops, subscribe in the comments 👇👇👇 #food #podcast #venturecapital #fundraising #futureoffood #CPG #retail

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