Navigating economic challenges: financial experts encourage CPG brands to innovate and strengthen operations for long-term success

By Deniz Ataman

- Last updated on GMT

Source: Deniz Ataman
Source: Deniz Ataman

Related tags Venture capital Investment start-up

Despite an overall decline in capital investments over the last year, BevNet Live’s panelists of financial experts encourage CPG brands to continue innovating along the supply chain while “strengthening velocity, sales and margins.”

The prevailing inflation and recent bank failures have significantly affected investments in the food and beverage sector; however, resilient brands that prioritize strengthening velocity, sales, and margins have managed to maintain their competitive edge.

Rates have gone up significantly over the last year. You are going to expect to pay more, but the way I would look at it compared to equity is you’re taking a short term hit against your margin to leapfrog to [where] you can potentially raise at a much higher valuation, not diluted funding​,” Erin Wall, partner/CRO, Lunr explained during BevNet Live’s panel discussion in New York City.

It’s all about finding ways to make sure you’re profitable and as early as possible…I would say continue focus on differentiation…and find new ways to create new markets​,” Wall added.

I think as brands and businesses look forward they need to recognize that they have a path to profitability," ​explained Elliot Begoun, founder, TIG Brands. He underscored that in order for brands to remain competitive, it’s essential “to understand and be realistic about where they are right now."

Despite the volatility of the economy over the last several years, the industry is seeing “more of a sense of calm”​ and regardless of the economic timing, “it’s always difficult to raise capital​,” emphasized Michael Burgmaier, managing director, Whipstitch Capital. 

Food and technology continue to drive investment

In response to climate change and the resource-heavy agricultural industry, food and technology continue integrating to generate progressive and sustainable solutions. According to a Hartman Group study,​ consumers show a strong purchase interest in science and technology to address challenges facing the global food system, including sustainability, ethics, health and food security.

These innovative approaches not only address pressing issues but also cater to consumer preferences for taste, novelty, and nutrition. Consequently, this convergence of food and technology is significantly shaping investment trends in the industry:

Earlier in June, Chamberlain Coffee​ raised $7 million led by Blazar Capital to launch into retail with RTD options and expand its appeal, distribution and consumer base through usage occasions.

While earlier this week, cultivated meat company, Omeat​ launched out of stealth mode after raising $40 million in Series A funding in 2022, backed by VCs S2G Ventures, Google ventures, Bold Capital Partners and Tyson Ventures.

Mycelium producer, MyForestFoods​ is prepping to expand its mycelium bacon portfolio across the East Coast after raising $15 million in Series A-2 funding, highlighting the interest from investors on food sciences as a viable sector to strengthen the food industry's positioning in a challenging economic and environmental time. 

“Being aggressive in a challenging environment”

Wall emphasized that finding ways to utilize credit and debt financing in earlier stages outside of the banking sector, including fintech, although regardless of financing optionality, requires an agile and aggressive business strategy from entrepreneurs.

I think being aggressive in a challenging environment is absolutely the way to go,​” she added. “If you’re the one that can win right now, you’ll have a much longer path to growth and success. Aggressive can mean a lot of things. It might mean you’re aggressive about hitting a broad wide set of retails in an omnichannel environment and figuring out ways to package your products so it ships cheaper than the competition​.”

Begoun emphasized that brands should focus on strengthening its velocity, sales and margins rather than building a business for a buyer, as “new buyers are always going to emerge.”

Related news

Show more

Related products

show more

Replacement Isn't the Future. Variety Is.

Replacement Isn't the Future. Variety Is.

Content provided by ADM | 22-Mar-2024 | White Paper

Successfully navigating the intersection of food and technology can help your business meet evolving consumer demands.

Some home truths about real prebiotic dietary fibre

Some home truths about real prebiotic dietary fibre

Content provided by BENEO | 22-Mar-2024 | Product Presentation

Confused about prebiotics? You’re not the only one! Food developers wanting to work with prebiotic dietary fibre are faced with an abundance of products...

Consumer Attitudes on Ultra-Processed Foods Revealed

Consumer Attitudes on Ultra-Processed Foods Revealed

Content provided by Ayana Bio | 12-Jan-2024 | White Paper

Ayana Bio conducted the Ultra-Processed Food (UPF) Pulse survey, offering insight into consumers’ willingness to consume UPFs, as well as the variables...

Related suppliers

Follow us


View more