CPG Secrets
@CPG_Precision
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Family Office Principal; CPG & Real Estate Investor & Operator. Here in the trenches.
Joined September 2021
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Last Seen Profiles
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I first joined Twitter to observe and learn, an experience which has since transitioned into paying it forward and sharing knowledge. I recognize I haven't detailed my background so here it is:
(1) I started my career in investment banking doing M&A work before moving into
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@Rick_Zullo
@kwharrison13
Super interesting
But the answer “you don’t get it and that’s why you will never work at a tier 1 VC” is just lazy.
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You the manufacturer committed to a 20% MCB at Sprouts — do you know what a 20% MCB will cost you per unit? Does your broker?
Let’s work through the numbers.
🧵
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Amazing, a $5M raise at a $100M valuation which sort of feels like an investment in a “plan” instead of a “product”.
But here’s what’s interesting about this deal.
D'Amelio Brands secured a $5m investment from Fifth Growth Fund as it looks to expand into the food and beverage space.
Soon D'Amelio Brands will be launching a snack brand that's expected to hit shelves in the fall.
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@PrivatEquityGuy
I read this and went straight to when my b-school professor talked about the DCF:
“Cash flows occurring closer to T-0 are weighted more / (worth more) than cash flows occurring further out from T-0”.
Great life advice
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I figure Cliff Bar does ~$500B run-rate rev so at $2.9B the implied forward revenue multiple is probably just under 6.0x. Thoughts?
@cpgwire
@KivaDickinson
@VictorMartino01
@_cameronkm
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2+ years ago, an off shelf at Whole Foods was $24,000. In 2023, the cost of an off shelf is $40,000.
The simplest way to diversify away from this spend short of saying “no more”, is hiring a merchandiser espec in ur strongest regions.
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Energy drink giant Celsius considers move into food, water
So we’ll be talking about this for the next 3 months
@guhlo
@EyeforRetail_
@cpgwire
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To all my CPG masters, sorry for my temp disappearance. Stories to come but in short I had to raise capital, reorganize and restructure some of our portcos, exit two companies — and I got engaged!
I’m back and here to stay.
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Idk how many Mad Men fans we have here on CPGTwit, but I’m rewatching (on Season 3) and on some level this quote resonates with me.
“You’re good. Get better. Stop asking for things.”
Anyone else a fan or should I just 🤫?
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Wondering if folks on here would find regularly shared syndicated data for Natural Snacks similar to what
@BevInsights
is doing (follow if you don’t already)?
@RosenZone
@cpgwire
@therealDBcoop
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Interested in hearing from my fellow CPG brands on how you approach trade budgeting: do you rely on tools built by your broker or on tools built within your org? Moreover, I’d love to hear about the level of granularity employed in your tools? …
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I’m in the market to buy an analytics company like SPINS or IRI so I can then mandate all data be available to suppliers for free.
Two questions:
(1) What value would you assign to either company?
(2) Who’s with me?
@cpgwire
@thecpgguy
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@RosenZone
@BevInsights
@cpgwire
@therealDBcoop
Be on the lookout for the first post (of many, maybe)!
In the meantime, here are the parameters for SPINS:
*Natural Products Industry (NPI)
*Category - SS Chips & Pretzels & Snacks
*$3,089M in $ Sales/Yr for Total US MULO
*$387M in $ Sales/Yr for Total US Natural
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@hitsamty
Have been in meetings with him: awfully decent human being, a true deal maker through and through, and fluent in the numbers on everything he looks at.
Sharpest guy in the room.
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If you’re an emerging brand with your eyes set on Costco, an established brand praying a rotation comes in or if you’re someone who’s curious about the Costco model vs ROM — then this is worth a listen or three.
TIG Talk: Navigating The Costco Of Today: Getting Expert Help To Succeed With Jeremy Smith And Terry Meyer -
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This is cash dilution at work: shipped $32K, $11K came back in cash received.
Simple walk-thru like the one in this article is just one reason I’m here in the trenches!
Thank you Jordan 👌
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@landon20s
Put it this way, if I’m raising $ for a new beverage, I’m including
@guhlo
as an advisor / board member (assuming he’s “on board”)
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Savage
“Walmart now accounts for one-third of all online grocery sales”
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Genuinely, how do CPG folks feel about ECRM?
@EyeforRetail_
@thecpgguy
@max_blessen
@Matt_Goodcrisp
@iiiitsandrea
@nickywonka
@guhlo
@RosenZone
@willnitze
@Friedweiss1
@drewfallon12
@_cameronkm
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Quick tidbit on natural channel store performance:
Park Slope Food Coop in Brooklyn, NY absolutely crushes it:
*Park Slope is a component of National Coop Grocers (“NCG”)
*U/S/W averages minimum of 4.5 to 6.0x what we do in Whole Foods (for context)
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@VictorMartino01
Have you flipped thru Sprouts’ Q4 investor deck? 3-400 new stores in expansion markets!
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If you’re routing extensive resources and limited capital towards your Whole Foods business, and paying for outside merchandising, do you have a handle on how each store ranks on a regional and global basis?
🧵
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@ElonMuskAOC
I only call it Twitter, saying “I was on X yesterday and saw…” sounds like I took drugs and stared a tree for 45 minutes.
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@cpgwire
(1) La Colombe
Acquired at 3.0x Forward Sales ($900M GV)
(2) Nutrabolt (C4)
Acquired at 4.6x Forward Sales ($3.0B GV)
- -
While either of these deals may end up being decently accretive as the year closes out, the value is in KDP’s DSD network.
Eyes on 2024
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For CPG's, you must prioritize your channel & customer list and this very much becomes an exercise in risk management.
For instance, say your product averages 25 UPSPW in Whole Foods, therefore you may expect to see 10 to 12 UPSPW in Grocery and 1 to 2 UPSPW in Drug.
If you
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Had the pleasure of catching up w/
@guhlo
— thoroughly enjoyed our talk.
The consummate experience from folks on here, incl Mark, is categorically & utterly invaluable to founders & operators alike.
And w/ Mark, he comes at it with compassion and generosity — keep it up!
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Just re-watched The Prestige for the 4th time — such a great film. If you haven’t seen it, you must, it’s one of Nolan’s best.
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I had the pleasure of speaking with
@Matt_Goodcrisp
, super sharp and bright mind who absolutely “gets it”.
It’s amazing: Twitter is 1% of the knowledge and experience cultivated by its members.
Like an iceberg, all the CPG knowledge is below the surface.
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Conducting PP analysis is crucial, and it echos with the concept of “growing profitably” about which I often post. That you understand % Merch Efficiency is just as imperative as understanding your Lifts for each tactic.
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@RosenZone
The craziest thing is it looks like a rest stop off the NJ turnpike, exit 6 before six flags.
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The
#38
issue of
@RosenZone
Express Checkout just hits different.
It’s like having a Bloomberg terminal but for all things CPG.
🔥🔥🔥
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2023 Trade Planning is upon us and many CPG’s still standing have myriad micro/macro data points to incorporate into their 2023 strategies: what are the top 5 points to consider?
@KivaDickinson
@VictorMartino01
@_cameronkm
@Matt_Goodcrisp
@_dhruv_1
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Here’s a fact: this concept of “above/below the line” doesn’t get talked about enough.
To the extent of simply managing a CPG P&L — and all the way on thru to how one manages the accounting — the treatment of different activities (reducing price vs paying slotting) is
@CPG_Precision
@willnitze
Yes above vs below. Above is anything to do with cutting price. (Trade, coupons). Below is “marketing” including advertising working & non working, market research, insights, branding agency etc.
I would combine A&P%NR and R&D%NR to see how much investment in future growth.
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It’s safe to say that each write up from
@EyeforRetail_
is 10 out of 10 in wisdom and lessons.
Follow, your brand depends on it!
If your CPG brand is expanding in retail but struggling with velocity and visibility of what is happening in stores, you need a sales team.
But a sales team is challenging to manage. It’s a huge investment of time and money.
The team requires systems, a process to follow,
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@PanoKPhoto
A display or promotion secondary to a brand’s primary shelf placement. There’s the in-aisle, “primary” placement and then there’s the End Cap “secondary” placement.
By the way,
@Matt_Goodcrisp
good looks!!! Love seeing you own more and more sq ft at store level.
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Here’s the Natural Snack Category over the latest 52wks at the largest conventional grocery in the US, and this incl. Private Label.
Why share this?
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@Will_Schryver
When I was analyst, the headline was more like “Wall Street not working junior bankers hard enough, upping hours to 168hr work weeks”…
What is this weakness!?!
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Doing my monthly walk-thru of my local
@WholeFoods
and noticed new cracker items in the Cracker & Crispbreads POG.
Packaging / branding definitely unique to the set. Time to give them a try!
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@xcvnick
@RosenZone
@cpgwire
*Slotting: Cost of doing business and getting onto retail shelves
*Free Fill: Supplier agrees to provide up to X number of cases and covers the cost
*Pipe Fill: Retailer orders a heavy amt of product at launch to fill authorized stores and shelves
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@RosenZone
@xcvnick
@cpgwire
*Clarification*
Working Capital loans can work as a viable method of financing operations (in general), but for what MS will use the capital, debt is an expensive way to pay for things like slotting, free fills and pipe fills.
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@RosenZone
@BevInsights
@cpgwire
@therealDBcoop
12 Subcategories in order of 52wk $ Sales (Mulo)
*Puffed Snacks & Straws
*Popcorn
*Tortilla & Corn Chips
*Potato Chips
*Pita & Bagel Chips
*Chips Veg & Other Alt
*Popcorn Microwave & Unpopped
*Pretzels
*Snacks Other Alt
*Pork Rinds & Meat Crisps
*Snack Mixes
*Snacks Variety Pks
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@Roth_Overlord
@moseskagan
Nada, and then you leave rent growth assumptions out of your UW and therefore rely on in-place rents vs growing market rent at 3 to 5% just because.
But on the other hand, for sure this test case has had ripple effects in markets across the country. Of that I have no doubt.
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$4.49 “Promotional SRP” ($1.00 OFF)
($4.49 SRP - $3.09 Landed Unit Cost + $0.62 Allowance) / $4.49 SRP
= 44.98% Retail Margin
This means your 20% MCB is “enough” to hit $1.00 OFF deal at Sprouts.
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@agazdecki
I think distribution is a function of product and the loop continues. But more importantly, for operators managing $25M to $50M brands looking to grow to +$100M thru M&A — profitable distribution is a key to getting there.
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@cpgwire
At +$50M run rate, 41 employees, and $7M to $10M marketing budget currently, they’re burn is likely mounting and the $85M for inventory, free fill and slotting is probably just enough to double the business to $100M/yr.
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This is a great one — it angers me — but still a goodie.
The underlying trend persists: people say they want to snack healthy but that doesn’t align with what they end up purchasing because what they end up purchasing is driven by satisfying a craving (thank you Lay’s) or when a
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Spins, 12wks w/e 01/01/2023
(1) In Total US Mulo, SS Chips Pretzels & Snacks category sales volume down 5% while retail sales up 8% propped up by 13% inc in Avg Price and Base Price. The Avg Promoted Price also climbed 14% indicating a pullback in the depth of promoted activity.
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@cpgwire
@foundedbycelebs
“Ight team, sales are down 50% so the sensible thing to do now is throw darts at a dartboard, see what sticks. Any ideas?”
We pivot to personal care…
“Love it, spend all our money on the hype and this one’s a winner”
🤦♂️
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I love working with brands on tackling these problems because only “a little” will often result in “a lot”.
Keep sharing!
@gefensk
good & bad problem: can not stay in stock because we keep beating our dsd’s sales expectations lol
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Here’s a savage data point surrounding Pepsi/Celcius:
*Thru exclusive contracts Pepsi has access to 61% of the college population
*Synergy
#1
- According to John Fieldy, Celsius already resonates w/ 18 - 24yr demo
*Synergy
#2
- Food Service
Celsius reaping the benefit of tapping into Pepsi’s distribution network.
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It’s been 3 years and 3 different brokers — yet we continue to fail in getting into Publix.
The key obstacle: the KeHE AM for our category just doesn’t like our brand and because of that Publix is missing a staple brand in their Mindful Snacking set vs ROM.
Happy Monday
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Straight up, there’s no market research or consumer M&A banker that’ll inform more than simply following this man right here
@guhlo
Alluring facts to me from $CELH Q2 report
Averages 20 skus per store !
Continues to grow sales in club channel & Amazon
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(1) Aaron Greenwald is the roll-up king
(2) Gut check says the market responds positively to the divestiture from Hain’s pov
(3) Our Home also picked up Pop Secret from Campbell
***Haven’t been able to pin down who’s backing Aaron’s shopping spree, anyone have some info on
Another Deal for Our Home 🥨
BFY snack platform Our Home has acquired ParmCrisps from Hain Celestial Group.
Clearlake Capital sold ParmCrisps along with Thinsters to Hain Celestial for $259M in 2021.
Hain Celestial divested Thinsters in April and now ParmCrisps is under new
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One can never “over study” how cash is created, conserved & destroyed: it’s how I learn about co’s.
But with all this talk I’m curious — anyone want to share their cash dilution %’s?
It can be thru UNFI, KeHE or AMZN after it decides to take 30% opex fees and 25% ad fees.
This is cash dilution at work: shipped $32K, $11K came back in cash received.
Simple walk-thru like the one in this article is just one reason I’m here in the trenches!
Thank you Jordan 👌
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@tolstoybb
The top number is number of ppl on the team and the bottom number is the number of hours they’ve been playing. 🤦♂️
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@_westock
@_cameronkm
@taylorshocks
@goatrodeoCJF
@NoBaked
@tiktok_us
The topics are so on point and the guests are tip top — love this podcast!
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@EyeforRetail_
While data for this chain is limited, they did a $100M Series C last year at which point the plan was to open 50 stores over 2yrs.
What’s interesting is they raised another $18.6M of debt in March to also fund new store openings…
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@RosenZone
@Leann_Abad
Keep up the great work Nate!
Between you and
@cpgwire
— this info is crucial to founders & operators alike.
🤙
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@RosenZone
@xcvnick
@cpgwire
That could work, and asset based lending is an effective alternative if the math works out. But given the high rate environment, and with equity being the “cheaper” alternative, ideally this gives them the runway they need until the next capital event.
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(3) Wholesale (Published) List Price
This is the highest price out of KeHE’s warehouse.
For UNFI, you can pull this price from your UNFI SBO Report.
For KeHE, you can pull this price from your KeHE Connect Portal under Item Search or the Brand Item Location report.
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…and if you’ve never heard of or encountered the Sequoia Pitch Deck, it’s a market-proven model for presenting your business / idea:
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Question to CPG’s & Operators:
Are you using outside merchandisers in accounts like Whole Foods, Sprouts, Ahold, Kroger, etc (natural/conventional grocery)?
@RindSnacks
@Matt_Goodcrisp
@EyeforRetail_
@nickywonka
@michaelpan
If yes, have you been able to quantify their impact
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He’ll probably call me “a weirdo” for posting this but idc bc
@derekhalpern
is one of only a few on Twitter with such deep knowledge of the fundamentals in taking a DTC brand and launching into +10K doors, all while limiting the carrying costs of expanding into new doors
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Say bye bye to last year's 20% dilution/spend, now very interested in following their financials as they deploy real investment ($) in marketing and promotional support.
LesserEvil is on track to do around $165 million in revenue this year, up from $103 million last year. In turn, it is rolling out its first major national marketing campaign.
@gabrielabarkho
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@venturetwins
@AdamMGrant
@carlzimmer
@susanorlean
@fbinegotiator
@PaulEkman
@AnnieDuke
@KatherineEban
@susancain
The Wisdom of Crowds by James Surowiecki
The Tipping Point by Macolm Gladwell
The Black Swan by Nassim Taleb
The Almanack of Naval Ravikant by Eric Jorgenson
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@Will_Schryver
Oy, sounds like you were either at Deutsche or Barkleys — while I feel for you, every analyst / associate pays their dues.
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Here are 4 screenshots taken from an Excel-based model I built to budget promotional spend.
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Idea for CPGs
A way for more than one brand to carry the cost of a paid subscription to Nielsen, IRI and/or SPINS with full PoS and Panel data access.
Instead of one brand spending +$100K/yr, ten brands should be able to support $10K/yr spend.
And while Byzzer is a start, it
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@_dhruv_1
@DKmitsos
@iiiitsandrea
@RosenZone
@MGTalksRetail
@NeilRetail
I agree with
@_dhruv_1
, here’s my take:
Impulse is about purchasing items you didn’t plan to buy when visiting a store.
Costco’s model is to get you to purchase a “greater quantity” of an item that you already planned on buying.
It’s no impulse, it’s excess.
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@foodboro
@LesserEvilSnack
@RindSnacks
@JMovsowitz
@MidDaySquares
@drinksound_
@JuneShineCo
@GrillosPickles
@ithacahummus
2023 Look-Back of Top Crossovers: Lesser Evil + Rind
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@willnitze
@cpgwire
Riding the honest train here, I’ll throw back two Lemme Chills followed by one Lemme Sleep and the ‘ole lady ain’t the wiser.
Love this Lemme stuff
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@_dhruv_1
You’re absolutely right — out of our family office, I’ve been operating our snack brand with two others (CEO and COO) and 1 to 2 sales people.
35% growth in FY21 and on track to outpace that in FY22.
So effing proud of my team.
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I’ll tell ya, going from $10m to $25m in topline is unequivocally more difficult than going from $25m to $50m.
Thoughts?
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@EyeforRetail_
I love this post because it reminds me of the philosophy I was taught in b-school.
I started out in I-banking and so in school I joined a competitive program (30 students admitted per year) which prepared us for careers in I-banking / PE.
But above all else, we were taught to
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CPG folks, it’s been quite a while since I’ve been on here:
*Relocated to Palm Beach, FL for work
*On the buy-side, my focus is on finding inefficiencies and creating value for our investors (not just in CPG), right now it’s RE.
*I hope to learn about your progress!
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@DevinKunysz
Walmart: “…and based on this guidance we expect to command 99% share of all grocery sales by 2030 at which point we’ll buy Amazon by bribing everyone on the antitrust panel…” 😅
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Hard to argue this.
That said, if ur a supplier out there then you’ve been made aware that WFM is moving away from outside merch teams as part of their divisional consolidation and restructuring.
@EyeforRetail_
Why Field Sales teams are so essential to build a brand in grocery. Their outputs can’t always be immediately quantified but over time the effect they’ve had becomes clear.
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@alessandroroco
@drinksanzo
@WholeFoods
Do you sell in Direct to WFM or is this a one-off / do you go thru UNFI?
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This is the best part right here:
“Coristine grew its annual gross sales to $103.3 million in 2023 — including $82.9 million in net sales — and got its products into major retailers and corner stores across the U.S.”
*$103.3M with only 20% dilution
*14% EBITDA margin
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Informative AND pretty (top notch formatting)!
Another great write-up from
@drewfallon12
(I see you still have the banker in you ha!)
Allbirds stock trades below $1 per share, or ~$100m market cap
Most people just say 'DTC is hard' when telling the story of allbirds - but there's a deeper lesson in this story, and one that I think every DTC operator should hear
let's break down where Allbirds went wrong 👇👇
93
69
1K
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Goldman and BofA Consumer teams (and lev fin) working day and night at a chance at the fees to be made from winning spin-off assignments…
@drewfallon12
low key, when you’re done with Iris we can open always open up an M&A shop — better yet, a restructuring advisory practice
General Mills is selling its North American yogurt division for $2.1B in cash.
Lactalis is buying the U.S. operation while Sodiaal is purchasing the Canadian one.
General Mills is divesting three manufacturing facilities along with brands like Yoplait, Liberté, Go-Gurt, Oui,
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If you track the data, you’d be amazed by the return profile.
For example, I’ve seen our merchandiser hold secondary placements for 6+ weeks at a time where the average store does 1.5x velocity vs Total TA.
Are your WFM off shelves profitable?
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Passing thru NY area and headed to Poconos for some R&R and investment pow-wow.
Gosh, alt channels like airports are tough and I’ve long viewed the spend there as pure advertising.
Is there a P&L model that leads to profitability or is that folly?
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@RosenZone
Coming back to this with this:
✈ Top U.S. airports Jan-July 2023: ATL takes the lead, trailed by LAX and JFK.
Among them, ATL soars with a remarkable +16% YoY increase, followed by LAX at +12% and EWR at +11%.
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Great write up by
@drewfallon12
The same holds true for CPG’s selling in physical retail.
*As an operator you want to focus on cash dilution: you ship $1.00 and UNFI sends you a check for $0.40, so that $0.60 dilution can be comprised of retailer scans, distributor MCB’s and
Everyone's always talking about brands like Gymshark and True Classic as the
#1
success stories in DTC
I found a lesser-known brand with public financials to tear down that is just as impressive
Let me introduce you to Huel. Let's break em down:
(+ a surprise at the end😉):
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@max_blessen
@JMovsowitz
As an operator of a CPG in BFY, and a principal at a family office w VC investments, understanding how cash cycles throughout the company is first and foremost.
And
@KivaDickinson
for fundraising!
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@DaveGreeny
@itsdreampops
Branding / packing looks great! Curious of the $ cost associated with this placement though — does slotting work the same for frozen as it does for grocery?
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@EyeforRetail_
Take
@RindSnacks
for instance. My guess is they’d see meaningful margin expansion if they moved away from their upcycled philosophy to something cheaper simply to financially engineer the numbers. But they stand by their brand, mission and product. Without the first two, there’s
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