In this podcast, Karim Nurani welcomes Sujoy Sarkar, Head of Corporate Development at BYTON along with Christopher Han, General Partner, and Nick Kinports, Managing Principal of Grant Barco Capital to discuss The consumer-packaged-goods (CPG) industry and how it is a very timely sector for venture investing.
The consumer-packaged goods (CPG) industry is a very timely sector for venture investing because the direct-to-consumer model of distribution has lagged behind in the food and beverage sector, compared to other startup businesses.
Grant Barto Capital is a new VC firm in CPG. It acts like a startup accelerator, where a key focus is enabling new companies to reach key networks of distributors and retailers. It’s important to be aware that you never really own your methods of sales or customers.
Companies rely heavily upon distributors to create brand awareness and build market share. Even companies using e-commerce channels have to put in a lot of effort to build brands in the direct-to-consumer model. The VC firm still finds it necessary to help companies build the links to do warehousing, distribution, fulfillment, etc.
Grant Barto is running a VC fund, not managing a portfolio company’s marketing process directly. But distributors and retailers can only consider four or five new sales pitch ideas in a day, so they’ll tend to work with the people that they are already comfortable with. This is where the VC fund’s close links with the CPG distribution network come into play.
The typical portfolio CPG company in their portfolio has been in business for two to five years. The exit strategy is generally to purchase by large food and beverage conglomerates like Anheuser-Busch, Coca-Cola, Unilever, etc. which are constantly seeking out new products and markets.
Listen up on June 22 at GIC for a hint about a major new product launch, which Grant Barto has waiting in the wings.