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Investing in Consumer Packaged Goods

2 min read Investing in CPG The CPG space is a solid one to invest in, especially in a post-COVID era. There are specific cues that make startups stand out to investors. You should make sure that any company you are considering investing in has a competitive edge and strong customer engagement. And you, as an investor, are going to need the patience to succeed in this sector. Competitive Edge Investors want a considerable market size in the future, and they want to see a competitive edge. If you have a massive market it probably means there are people in it already. Ideally, you want to find a company entering a market that will be meaningful enough with high growth rates that aren’t over-saturated. An example of this is nonalcoholic beer. It isn’t as saturated as the IPA sector, but it’s meaningful and on the rise. Customer Engagement You can measure customer engagement in a variety of ways. Engagement can happen on the company’s social channels, through different marketing activations, and through other methods being used to reach customers outside of digital channels. Omni Distribution Investors should look for companies with omnichannel forms of distribution. Single-channel and single customer models lead to too much concentration. Also, more channels require more brand awareness opportunities. Getting distribution is hard for the CPG producer. The big firms block out the small firms. Look for companies that have found creative ways to bring the product to market. CPG Takes Time Everything in CPG takes longer than you expect. When you’re investing in a CPG company, you have to be patient. Unlike software, the startup cannot go from one to one billion users overnight. It takes a long time to bring the product to market. The company has to prepare its packaging, get production up and running, be ready to ship, acquire distribution, be able to refill orders, and more. As an investor, you have to come in knowing that it’s a longer cycle and it’s a different risk profile. Once the consumers are in that buying cycle, however, it’s a beautiful thing to see it. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/trends-in-cpg/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

Trends in CPG

3 min read  Let’s look at some trends in CPG in this Post-COVID World. The consumer packaged goods sector consists of companies that manufacture and sell products for consumer use. Examples of consumer packaged goods include mainly food and beverages, but also cosmetics and cleaning products. Solid trends are being seen in the CPG market today, many of which are being derived out of COVID-related necessities. COVID has changed the way we look at, interact with, and, most importantly, shop in our society today. It is no longer enough for a product to taste good; it must also fill a specific need. We have new drives and values, and everything we purchase should align with this in one way or another. This desire for more has led to an industry-wide focus on health, wellness, and function. Functional Beverages The functional beverage sector is now approaching 100 billion dollars a year. The functionality of beverages has moved in step with the functionality and food-as-medicine trends seen recently in the food and supplement spaces. This macro trend is no longer sufficient that a food or beverage product isn’t bad for you or that it’s dye compliant. This product must also do something positive for you. Functional benefits can include cognitive health, pre-workout, post-workout, collagen for your skin and joints, digestive health, immunity building, anti-inflammatory, or combinations of these categories like hydration and wellness. What we’re seeing is a lot more dialed-in nutrition that is tied to different functions, whether those are probiotics and gut health with drinks like kombucha, or sleep aids with drinks that contain magnesium citrate and melatonin. We’re also seeing significant growth on a focus on working from home. Functional beverages that allow you to focus, work, watch your children, and teach school all at the same time are causing a lot of growth across the functional beverage industry. Health and Wellness Another trend being observed in CPG is the movement towards using clean ingredients and promoting wellness. Consumers are getting more intelligent and more sophisticated about what elements are going into the food and beverages we consume. The fewer ingredients- the better. The less processed- the better. The cleaner the ingredients- the better. And we’re just as focused on what we’re applying topically because that’s a part of overall health and wellness. The growth of the natural channel and the healthy alternatives is a long-term trend, and it’s not going to slow down; if anything, it’s going to speed up. This creates a tremendous opportunity for new CPG brands to continue to innovate and move into this space. We now see a move to meatless and vegetable-based proteins, products with low or no sugars, fats, or salts. In wellness, there has been a heightened focus on calm and anti-anxiety-oriented products. Cognitive functionality is a significant and growing trend in food and beverage. Understanding the ingredients set that are available to address ways in which you can get both taste and efficacy is vital. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/trends-in-cpg/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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