In a recent episode of the Founders’ Fundamentals podcast, experts delved into the essential strategies for Consumer Packaged Goods (CPG) founders to thrive in 2025. Ryan Daily from FoodNavigator-USA led the discussion with Daniel Scharff, CEO and founder of Startup CPG, Benji Fitts from SPINS, and Melissa Dolan, Director at Emil Capital Partners, providing crucial insights for the upcoming year.
2025: The Era of the CPG Side Hustle, According to Experts
Aspiring CPG entrepreneurs might need to reconsider jumping into their ventures full-time in 2025. Daniel Scharff suggests that 2025 will be “the year of the side hustle” for CPG founders. Balancing personal financial needs with the capital-intensive nature of the CPG industry means maintaining a steady income while building a brand.
Founders who have established careers should consider leveraging that financial stability to fuel their CPG ambitions. Scharff emphasizes that a consistent income stream can be invaluable in covering the significant expenses inherent in the CPG sector.
While maintaining a day job, Scharff advises founders to remain deeply involved in every aspect of their business. He cautions against premature delegation, highlighting that “CPG founder life is not ‘work/life balance’ life,” especially in the early stages.
Consumer Behavior in 2025: Value and Premiumization Trends
Looking ahead to 2025, Melissa Dolan, Director at Emil Capital Partners, points to a critical economic reality: consumers are beginning to feel financial strain. Despite inflation nearing the Federal Reserve’s 2% target, food prices remain stubbornly high.
Adding to the pressure, US credit card debt surged by $24 million, reaching a staggering $1.17 trillion in the third quarter of 2024, as reported by the Federal Reserve Bank of New York. This increase suggests consumers are increasingly relying on credit to afford everyday necessities. Retailers are also feeling the impact, facing transaction fees of 2-4% per credit card swipe.
Dolan predicts, “A big prediction I have for 2025 is that we are going to start to see signs of the consumer struggling, and I think consumers will be looking for value in many instances or premiumization.” This dual trend indicates a market bifurcation where some consumers will seek budget-friendly options, while others will still prioritize premium products.
Emil Capital Partners’ perspective emphasizes that brands need to effectively communicate value to consumers. Dolan clarifies that value doesn’t solely equate to low pricing. Instead, brands should explore innovative approaches to deals, promotions, and advertising to convey value in a way that resonates with their target consumer base.
Strategic Promotions: Moving Beyond ‘Auto-Pilot’ for CPG Success
Benji Fitts from SPINS highlights the potential for CPG brands to optimize their promotional strategies for better sales outcomes. He advises against setting promotions on “autopilot,” advocating for a more deliberate and data-driven approach to promotional planning.
Fitts critiques the common practice of quarterly promotions as “bad advice.” He recommends that brands align their promotional calendars with specific, measurable goals to maximize effectiveness and return on investment.
Despite potential budget constraints, Fitts underscores the importance of promotional activities in driving volume growth and gaining market share. He notes that in MULO (Multi-Outlet) and natural channels, promoted volume has increased significantly over the past three years, demonstrating the continued effectiveness of promotions.
Fitts concludes that intensifying promotional efforts is becoming a key strategy for companies seeking to enhance competitiveness, boost trial rates, and capture market share from competitors.
Securing Venture Capital in 2025: Fundamentals and Sustainable Growth
For CPG founders seeking venture capital in 2025, the landscape may become more favorable. Melissa Dolan from Emil Capital Partners points to increased M&A activity in the CPG sector, such as PepsiCo’s acquisition of Siete Foods and Mars’ acquisition of Kellanova, as a positive sign. Lower interest rates could also provide additional tailwinds for investment.
However, Dolan emphasizes that founders must prioritize “fundamentals and sustainable growth” to attract venture capital. This includes demonstrating strong unit economics, practicing capital conservation, and presenting a compelling, data-backed narrative to investors. Emil Capital Partners focuses on these key metrics when evaluating potential investments.
Dolan acknowledges that 2024 was a challenging year for founders, but notes a slow uptick in deal volume. While dollar volume is expected to surpass 2023, it remains significantly lower than the “zero-interest rate era.” She also points out a trend towards fewer, larger deals, often driven by insider rounds for existing portfolio companies.
Furthermore, the number of active investors has decreased by 55% since 2021, largely due to a lack of exit opportunities. This highlights the importance of focusing on long-term, sustainable growth strategies that appeal to discerning investors like Emil Capital Partners.
Trade Show Strategy: Follow-Up is Key to Success
Trade shows, such as Natural Products Expo West and the Winter Fancy Food Show, remain crucial events for CPG brands. While costly for startups, these events offer invaluable face-to-face interactions with buyers and potential investors.
Benji Fitts advises founders to prioritize “making new connections” and analyzing the competitive landscape at these events. Extending networking beyond show hours, through happy hours and one-on-one meetings, can also be beneficial.
Crucially, Fitts stresses the absolute necessity of prompt follow-up after trade shows. He warns that failing to follow up within a week is a missed opportunity. Personalized notes, samples, and sell sheets are essential for solidifying connections made at the show and maintaining momentum.
Conclusion: Adaptability and Strategic Planning for CPG in 2025
The insights from Emil Capital Partners, Startup CPG, and SPINS paint a picture of a dynamic and evolving CPG landscape in 2025. Founders must embrace the “side hustle” mentality, understand shifting consumer values, strategize promotions effectively, focus on sustainable growth for attracting venture capital, and master trade show follow-up. Adaptability and strategic planning, guided by expert insights, will be paramount for CPG success in the coming year.
