Dr. James Richardson has said a number of times that starting and scaling a CPG brand in today’s day in age is only for the elite—the uber wealthy. I used to disagree with him vehemently (“anyone can do it!”). I still really, really want to disagree with him. I think many of us do. We all love a good rags to riches story. But the numbers don’t lie. The stats don’t lie. The system that’s been put in place around building and scaling a CPG brand just doesn’t lie. I get an extra punch in the face time and time again when I try to argue against this. We’ve created a terribly unequitable system when it comes to scaling a food and beverage brand in this country and everyone’s at fault—the investors, the retailers, the distributors, the co-packers, the service providers, the supply chain actors, and all of the entrepreneurs who go along with it all because “that’s the way it is”. Its sad, but it’s also our current reality. Does that mean that if you don’t come from wealth that you can’t create change within our food system? Of course not. Does that mean you can’t challenge the status quo or fight to promote better health and better nutrition? Of course not. But just don’t try to do that via scaling a premium or BFY CPG brand unless you come from or have access to lots of $$$. If you somehow get through it without having access to wealth at the start, then consider yourself basically a lottery winner. Certainly the exception and not the norm. Pessimistic take? Possibly. Realistic take? Definitely.
Alison Cayne
7mo
Important for you to discuss, and as someone who had the privilege of being able to start and fund a company without needing to support my family, I say it before ever giving anyone advice or my take on anything. .
David Abrahams
7mo
Kyle Koehler this is very true. I launched my brand in 1998. Got 8500 doors in 18 months. Raised 2 million and it was brutal back then. Went bankrupt after 7 years. iLevel Brands represents many small brands. It is almost impossible to make it with all the expenses hitting them in today’s market. Back in the day many could survive the five years before potential failure as the old adage says got them. Right now if any start up can still be up and running after 2 years that is amazing. That said I do think it’s now 1 of every 2 that fail. Our industry needs to wake up or soon it will just be a world where all you can buy are the likes of Coke and Lays. Buyers, distributors we need to take care of our small guys bleeding them dry will kill innovation. If we don’t have them we who make a living in natural CPG will have no reason for being. Let’s change this.
It’s true and for years I had to just put me head down and take “that’s just the way it is”. I refuse to play the game anymore and we are building some disruptive concepts now that I’ve allowed our team to be unbridled from that messed up philosophy. I swear that we need some trauma counseling after that 3 year nightmare however. CPG is for the wealthy and connected. Period The ones who manage to pull it off are more rare than lottery winners!
Axel Brave
7mo
I totally disagree, and you should to! Numbers and stat change all the time. Look at your rev year 1 and today. Is that not growth?! You’re building with honesty, integrity, and aiming for a better world…and that always triumphs. If we can’t chase that, then what’s the point. To me, what you’re doing is winning! It doesn’t matter if your brand is worth $50k or $500mm.
Yea agree with you Kyle Koehler for sure - it takes a lot of capital up front to do it right (team, advertising, POs, the list goes on)
Erica Rankin
7mo
Super, super, broken system. And it’s only going to get worse based on where it’s headed. Hope things can turn around and small brands get REAL support.
Ryne O'Donnell
7mo
You become elite 10-15 years in with a winning product and insane consumer satisfaction focus. Until then, we are all peons (divine peons though).
Joshua Scherz
7mo
Unfortunately, I agree with you wholeheartedly. There are however founders and storylines out there to discover and tell that are muted success stories. Generally though they are boring compared to what gets the eyeballs and def not the hockey sticks that the good Doctor talks about. Grind, grind, grind, build slowly at sustainable growth rates 8-10% a year. Reinvest any minimal profits into inventory, take out your 401k money, but not a salary. Founders doing demos getting hands dirty in the weeds. Rinse and repeat. Not the cash out multiples of 10x or 50x that makes the sexy headlines
Sales Leader | Creative Strategist | Business Development Leader | Building Brands & Communities Through Innovation
7moPete Maldonado care to weigh in?