What does it take to build a successful CPG business in 2024? In this episode I invite on a panel to talk through industry trends, founder survival, and finding the support you need to grow your business.
My guests are:
- Christine Couvelier
- Sachi Kittur
- Tricia Ryan
Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at Foodbevy.com to learn about becoming a member or an industry partner today.
Succeeding in CPG 2024
Jordan Buckner: [00:00:00] Welcome everyone to today's episode of the start to scale podcast. For this conversation, I actually wanted to welcome some of our new Foodbevy members from Food Biz mentoring, which is a think tank of food and beverage experts that assist entrepreneurs to scale up and succeed at retail. And we're going to have a conversation today about a couple of different topics, but have some really great.
Insights that we will be able to see, take away and use for your business. So with me today, I have Christine Couvelier , who's the co CEO, Sachi Kittur , who's the director, and Tricia Ryan, who is also a co CEO. And so what is really unique about this team is that they're all entrepreneurs with food business.
And it is through that struggle of moving to retail that they have connected with over 50 experts from the concept stage to getting that retail listing that has created this new business venture. So welcome everyone and let's get started. I want to start the [00:01:00] conversation day with Tricia. So Tricia, new product success rates have had some pretty grim numbers over the years.
I'd love for you to share some light on, you know, what does that success rate look like for new companies and products entering into the market?
Tricia Ryan: I think it's a bit of a wife's tale, but we've always heard, and you stand at trade shows, 80 percent of the people at that show may not be there in the next two years.
So the failure rate. seems to be very high. So only 20 percent may succeed. And yet what's interesting in doing a little digging around this subject area was that Mintel, which we all go to for a lot of our resources and research, has now suggested that that's really improved significantly and that in fact, the failure rate has declined significantly, if not even down to like 60 percent you Which, wow, it's doubled the success rate.
And what can we attribute that to? I think it's that market research is available. We can read a lot online. You can buy some low subscription rates. We've got other Food Bevy [00:02:00] providers of market research. The fact that retailers are now just not this mom group, they are educating. A lot of them have entrepreneurial programs, which are helping.
People get a good head start. And then the fact that we've got things like social media and the new world of the way to reach consumers around this topic. And so people have done a lot better. And there are some categories that are very highly successful, something like the baby food category has significant success rates, like up in the 80 and 90 percent range Bakery products are in that 70 71 percent Confectionary 78.
Well, those fast people love their snack foods and desserts, etc. They're all well above the norm with regards to and we see a lot of food products coming out in these categories. So I think things look really good for the entrepreneur and the future, and there's a lot of investment from venture capital groups right through trying to help entrepreneurs with their success, because we know that really 60, 70 percent of [00:03:00] the people employed across North America are part of the , food and beverage industry and the entrepreneurial industry, not the major CPG firms.
So I think this is an important number and factor, and it shows well that people are doing so well these days.
Jordan Buckner: No, that's really great to see. And I know that, you know, there's a lot of new tools and resources that exist now that didn't even five, 10 years ago to make it really easy for a company to, you know, start a new website and get market research and get a lot of data to help grow their brand.
So absolutely love that. So, you know, there's a lot of emerging founders who are listening to this podcast. You know, what have you found that those emerging kind of food entrepreneurs have over traditional CPG innovators?
Tricia Ryan: Well, you know, we could always say we know they're nimble, but when it comes down to it, it's sort of the three C's.
They know the consumer and they know it well. They are competitive and they're very responsive in, in, to conditions. So if you think of the three C's and think about where your opportunities are you know, it is the survival of the fittest. And yet the [00:04:00] fittest may be a fat cat with a big budget.
And yet we do see that it is the entrepreneur that is bringing the . New products to market, and it's been very you know, reflected in the market research that all of this effort is making food less expensive, which is a big issue today on us, particularly with what people are talking about at retail and how much it's going to cost to put a meal on your table or snack foods and the fact that competition makes us more profitable.
So I think it's a win win for everybody. So think of the three Cs.
Jordan Buckner: I love that. So kind of backing, keeping going with that trend on talking about the consumer, Christine, you are resident trendologist. Can you share how and why the consumer has changed over the last couple of years?
Christine Couvelier: Absolutely. So as a trendologist, I'm looking into the future of food.
I'm thinking about what's going to come next. And the biggest. Margin of something that hasn't changed is that consumers know more than ever before. They continue to know more. There's more choice out there and they're learning more about the product. So let's talk about some of the trends [00:05:00] that are in that culinary crystal ball for 2024.
Let's start with health and wellness. You know, there is a demand for healthier options. Again, consumers know more than ever before. So they're wanting to talk about natural ingredients, organic products, items with specific health benefits. Thinking also of transparency and clean labeling. Consumers are really conscious about the ingredients.
They're going to read your label. They're going to want to know what's in it. Convenience is a trend that hasn't gone away. It's only gotten more popular. So certainly the rise of online food delivery and delivery platforms, that's something that five or ten years ago we wouldn't have been having this conversation.
So that's a space to do your homework in. And the ready to eat and on the go options. Absolutely, busy lifestyles mean we have to provide a solution for people leaving the office and coming home and putting dinner on the table. Don't forget about that. Ready to eat also should think about healthy options.
Sustainability is. Huge. It's neither a trend nor a fad. It's just something that is part of our food world right now. We [00:06:00] know a lot about the environmental concerns and the environmental impact on food choices. People are talking about eco friendly packaging and then there's the food waste. Well, you know, countries and companies must come together.
They must come together. be providing solutions and you know, any of your listeners are welcome to reach out. I am a voice of food waste and we think about it a lot at Food Biz Mentoring. The only way is up and that's upcycling. Now moving on to plant based and alternative programs. Alternative proteins.
Remember that we used to have vegetarian burgers that the box tasted better than the vegetarian burger. That's very different. Nowadays. There are plants in plant based offerings and it's a huge rise in popularity. It tastes great. It's healthy for you. Technology and personalization is something we are going to continue to watch through 2024.
Really think about mobile apps and digital platforms. That consumer experience is really important. Customization in technology and personalization [00:07:00] is important because consumers are going to be having the ability to customize their food and beverage orders. That's huge. My tip to your listeners is to continue to do your category and competitive analysis.
So you're paying attention to all of these things and in technology, that's exceptionally important and ethnic and global flavors huge right now, not only thinking about tastes around the world, but really thinking about the cuisine and its authenticity. It's not just a pasta sauce from Italy. Does it come from Tuscany and what makes it?
unique that it comes from Tuscany. We don't want to forget about social media influence, because people certainly still eat with their phones. We see that all over the place, but take that as an opportunity to use that social media influence to promote your product. And alcohol trends, well, all around craft beverages, artisanal cocktails, really pushing the envelope, not only in the alcohol, but watch for a huge increase in mocktails.
And I'm going to leave you with a treat. [00:08:00] Watch out for sweet garlic next year. It's a cross between leek and garlic looks like a green onion, but you eat the whole thing.
Jordan Buckner: I love those trends. I was so excited. You know, one that I've been particularly following is the rise of, I'll call second and third generation.
Global flavors and cuisine, especially in the U. S. And in Canada, there's a lot of 2nd, 3rd generation people are now growing up and say, hey, I love these foods that may be like my grandmother. Grandfather made me my, my mother or father, but you're kind of getting a little bit in time away from the, you know, their country of origin.
They're saying I want to bring these flavors back. And there's a. Really large increase in those second or third generation individuals, especially from Asia from around the world who were living in the U. S. and Canada, who are now craving those flavors of of childhood have been following a lot of brands.
You've seen a lot of success there.
Christine Couvelier: Absolutely. Because food memories and nostalgia are huge in innovation.
Jordan Buckner: Exactly. I love that. So, you know, Sachi, perhaps use the founders of chili kind of [00:09:00] know, you know, not only about some of these food trends, but also the pain points of entrepreneurship.
You know, you. Kind of came from experience of leaving a corporate position and technology HR to start a food business. And like many of our listeners, I'm sure you've had some interesting experiences and insights. I've been following your journey. We've been working together for over a year now. So it's been exciting to see what you've been going through.
Sachi Kittur: Yeah, absolutely. First of all, thank you in advance for all the 911s, Jordan. So I know I've reached out to you, but this is the case in point of why a support system in an ecosystem really, really goes a long way as a newbie entrepreneur. Thank you. I'm going to give you a quick shout out. So what are the stressors?
You know, there are quite a few, but here are the ones that I often hear fellow founders speaking about. And I'll tell you the first thing, and I'm sure , you've come across this too, is that there's just a high level of stress. Being an entrepreneur in the macro environment that we're in, and that's [00:10:00] just a reality, you know, cash flow, sales pressure, having to do it all things, you know, so many single points of failure.
So that is a, I'd say that's the number one challenge right now. And not far behind it is this constant struggle to find product market fit and onboarding customers, retail customers you know, at a pace that supports, you know, reasonable growth and cash flow. I think kind of related to point number one, there's this whole you know, notion of hustle culture that work life balance, if I'm an entrepreneur, work life balance is just not, not an option for me.
And I'd say it's actually on the contrary, more important as an entrepreneur to keep that balance. And so I think that being overworked and being at risk of. Burning out. I think entrepreneurs are two times more likely to actually experience burnout in the workplace. So really, really important. Again, let's talk about the current macro environment.
[00:11:00] Lack of cash flow funding is limited and given the high cost of entry coming into CPG, that becomes a really, really critical success factor. So in this environment, Big challenge, right? Being able to have access to cash and also the unpredictable revenue cadence that typically comes with the CPG industry.
Last point. Entrepreneurs, we try to do it all and we just have to learn to take a step back and maybe even say no to opportunities.
Jordan Buckner: A couple of those things you mentioned just really resonate with me as well. You know, you hear about tech companies that have unlimited vacation policies and yet no one takes the vacation.
I feel like as entrepreneurs, we have unlimited break. Well, you know, time where, as you know, we control our own schedule. We can take as much vacation as we want, as many breaks as we want. Yet we never do. And it's that fact that it is a limit. We can work all the time and keep working. And so it's so important that we set those boundaries for ourselves and force ourselves to take that time off and really hold that time dear.
Sachi Kittur: Yeah, [00:12:00] such an appropriate analogy with tech. You're absolutely right. We, it's, it's really up to us at the end of the day.
Jordan Buckner: And the 1 thing that I've also seen with so many founders at the early stage and throughout the number 1 cause of stress is and you touched on it is money. The reason that founders are so stressed is because most businesses are not profitable early on and they're on this constant.
Downward spiral of always feeling like they're running out of money. I was there with TeaSquares where for five years we're running out of money. And that's really hard to deal with.
Sachi Kittur: It is. Listen, I'm not trying to downplay the importance of cash, but my mentor. Being in the same situation, my mentor said something really important, which is Sachi, why are you in a rush?
What is the rush? Why don't you slow down? Why don't you spend less? Why don't you, you know, hold off on the marketing? And so, which is so true. We're always feel like there's a rat race, but that rat race is really in our own mindset. So a hundred percent.
Jordan Buckner: It [00:13:00] is, I think, you know, barring from tech, again, that's something that we've been pushed to believe is that we have to, Sell our company or be successful in three or five years.
And if it's not, then we're a failure. And I love that idea of extending , that time. So leaning into that, like, what are some other strategies that you've found for managing these stresses and supporting that resilient mindset?
Sachi Kittur: Well, I think the number one strategy that I say to every founder, especially early stage is kind of what I touched on earlier in the conversation, which is build a support system.
There are so many amazing organizations out there. Founder groups associations you know, obviously Foodbevy is right up there. How many times have I reached out to you? And I think it's a testament to the fact that we have access to resources and we can get our questions answered so much more quickly.
So build on that ecosystem and invest the time. The other thing I often find is that everyone's, you know, we go on LinkedIn, we go on social media and wow, oh my God, everyone's so successful. But look at [00:14:00] me, you know, and I think there's a, you got to stay in touch with reality. Social media is a skewed lens of very small, a certain point in time in the entrepreneurial journey.
Majority of the time, we're all facing challenges and failures. And I love, I want to do a sort of a podcast that I've been listening to a fair bit, which is wisdom from the top. By Guy Raz and it's unbelievable. All the Fortune 500 companies faced such significant failures. In fact, many were on the brink of bankruptcy, Netflix, Airbnb, Apple, Best Buy, Lego, to name a few.
Go listen to that podcast. There's others as well. And you will get a real objective perspective on all the success you're having. And I think you touched on embrace a growth mindset. Take the time to learn about what other founders did right or didn't do right. And I think you can really avoid a lot of growing pains if you [00:15:00] just invest the time.
We talked about the macro environment. It's changing product that you start with is likely not going to be the one . That you take off the ground. I think you've talked about this a lot, Jordan. And so you got to adapt and you got to be able to pivot. And I love this term that I heard at a recent seminar, which is don't be a laptop entrepreneur.
And it's so easy to just sit behind your laptop and and go through your to do list. I actually think, and myself included, we all need to go out there and network more. I know Foodbevy, you have some. fabulous events and resources. Food biz mentoring, obviously highly focused on creating a community that entrepreneurs can tap into.
So really, really important. And I'm sure there's more things, but those are the kind of the top five that come to mind.
Jordan Buckner: My first real business was a meal kit company and I was a laptop CEO for the beginning. I realized like, Hey, this isn't working. And so I really pushed myself out of my comfort zone to go [00:16:00] meet customers where they were.
And I basically, we started setting up demo tables in the apartment buildings and people came home to work. And I basically scheduled 1 every night. So I was constantly out there meeting people. You learn so much more than just sitting behind. A computer screen and really building genuine relationships, because, you know, every business is about building strong relationships with your customers, your suppliers, your network and everything between 100 percent so kind of along with that.
You know, I know Food Biz is mentoring has programs to help food and beverage entrepreneurs. Maybe Christine, you can share a few of those. Absolutely.
Christine Couvelier: It's a great segue after Sachi's examples. So we have a think tank of experts at Food Biz Mentoring, and there's a variety of business topics that go over a 12 week period.
Think of it along the lines also with personal coaching. So we look at Demographics, technology, a renewed focus on health and wellness and consumer demand for sustainability. We really focus on design, thinking, marketing and [00:17:00] branding and of course, product development operations from law to co packing and food systems and leadership.
These are, you know, think of it as a survival guide. for entrepreneurs. Where are you going to go to find all of this in one place? We have a lot of guest speakers that are experts. They've learned the what works and what doesn't work and what's missing in food and beverage and finance and marketing and operations and law and entrepreneurships, thinking about different food concepts and regulatory and product development.
You know, all those rules change all the time. Entrepreneurs. Have so much on their plate. So these are the experts that are sharing that, you know, you'll work on. If you attend this, you'll work on and present. You're ready to pitch business playbook. It's invaluable and networking with other people who are going through this and have gone through entrepreneurship and the world of foodpreneur.
Jordan Buckner: I love that, you know, all the things that you mentioned that founders have to learn about is really daunting. And it reminds me of [00:18:00] 1 of the insights that hadn't talked with entrepreneurs this last year is that founders are the ones responsible for the entire value chain of their product from sourcing to production, selling into stores, but then even work with distributors And even making sure the consumer has a great experience.
And so that's why we're all so stressed is because we're responsible for so much of the life cycle of the product beyond anyone else in that industry. And so, you know, it becomes a rollercoaster you know, Sachi, I'm kind of curious, like you're talk a lot about kind of, and have a section on mastering the emotional rollercoaster of entrepreneurship.
Can you talk through like what you kind of talk through in that section?
Sachi Kittur: Yeah, absolutely. I think there's, we're kind of taking the stigma away from really tackling the mental health challenges head on. We don't need to brush it under the rug. And I think in the webinar that curriculum that we've put together.
It's really creating a safe and supportive environment where entrepreneurs can be [00:19:00] vulnerable. They can ask those tough questions and you're going to have access to founders and leaders who've actually been in your shoes. And so I think it's that sort of opportunity to talk about the things that often don't get prioritized.
, and the number one thing I can tell you. Is I talked about mental health. I know this firsthand being an entrepreneur, especially come during COVID and coming out of COVID. The isolation is real. Right? We know, I think I shared the stat earlier two times more likely to experience mental health issues.
So I say to every single entrepreneur, and I have to remind myself of this too, which is no matter. What the priority what the risk in the business, it could be something that's going to, you know, open doors if it's at the expense of your mental health, it's not worth it. And so you have to have to prioritize your mental health and well being because reality is, if you do not, there will be no business, there will be no viable business so just making sure that's top of mind.
I think A wise tortoise [00:20:00] told us slow and steady wins the race. I talked about this earlier. You have to celebrate and win every little pivot, every little movement. Tricia's really good. Actually, Tricia and Christine are both really good at reminding even me of that in our conversation. So those little wins will help.
Balance reality with optimism. And one little trick that I do is I know this is going to sound really funny, but one of the things that I'm encouraging really everybody to do is find a mentor. That's actually a bit more on the pessimistic spectrum and, or somebody in your circle. And I actually take a lot of ideas through their gate and it's.
amazing as counterintuitive as it may seem. The blue sky thinking of entrepreneurs really gets balanced out a little bit. , and I can't say enough great things about having , that lens to share some of your ideas. And I'd say really keep your head down. So , my CEO, my last role. I remember a competition, there [00:21:00] were so many competitors, you know, popping up and he never once got up and worried too much about them.
He had a marketing team, of course, that would keep a pulse on it. Head down, figure out your how, your how is going to be different than other co founders and other entrepreneurs. So don't get caught up in that competition. That's social media frenzy. And then we talk about fail fast, you're going to fail.
You got to expect it. There's going to be failures. And so how you pick yourself up, how you learn and get back on track is really going to set the stage and keep your mental health in check.
Jordan Buckner: I believe these, these are such great examples of like practical. And strategic tips for founders to navigate this, this wild journey that we're on.
And, you know, we always talk about as a roller coaster or a journey. But 1 thing that I've learned as well, is it's so important to build and design your business so that you can enjoy it throughout that journey and not just at some potential low. Probability end where you make a hundred million dollars, right?
Like you should [00:22:00] design the business where you go in every, at least every week that you enjoy it and you come out on the positive as best as you can, because those are the companies and the founders who are way more likely to reach the end for some exit. If you love what you're doing.
Sachi Kittur: So you could, I couldn't have said it better myself.
Thank you. Absolutely. You got to love what you do.
Jordan Buckner: This is so amazing. I'm so happy for you to share all those resources and tips. So Christine, Sachi, Trisha, thanks so much for joining today. If you've enjoyed this conversation and want to learn more about how the team can help at Food Biz Mentoring, check them out at foodbizmentoring. com. I'll include the link in the show notes, but definitely 3 amazing links you can learn from and so many more experts so that you don't have to go on this journey alone. Thanks so much everyone.
Sachi Kittur: Thank you. Thank you for having us. Jordan. Thanks, Jordan.
Tricia Ryan: Amazing.