3 Growth Pillars for CPGs in 2024

The business landscape in the CPG space isn’t looking to bolster anytime soon.   

Funding is still dried up. 

Capital requirements are still high.  

And there are many uncertainties.  

But this doesn’t mean that there’s no room for growth for CPG companies.  

Last 2023, I engaged with 40+ CPG founders in the better-for-you food and beverage sector.   

I’ve probed their failures. I’ve uncovered their successes. I’ve gotten deeper and deeper into how CPGs can have better odds of succeeding in such a competitive industry.  

I know that as a founder, your odds are stacked against you.  

You struggle with margins.  

You balance growth and capital.  

You try to optimize your operations.  

You look for ways to streamline expenses. 

There’s just no easy way to do it, right?  

There are 100 factors to help you grow but I can’t tackle even just half of that in a single piece of writing.  

To give value to you in my first article for 2024, I’m focusing instead on the 3 growth pillars that you can revisit, assess, and immediately act on. 

Growth Pillar #1 - Driving Product Trials   

Regardless of your product category and whether you are a pre-launch, a start-up, or in growth mode, the number 1 priority for you should be to drive product trials.   

This is the bread and butter of successful food and beverage CPG brands – their ability to attract their customers and encourage them to buy their products.  

This works for both DTC-focused and retail-focused companies.  

Driving product trials is counted as every new purchase of a new customer.  

You can do your promotional activities like free tastes, product sampling, and giveaways to initiate testing.  

But you want to move them from free to buying customers, right?  

Two of the major factors that cause 85% of CPGs to fail are having an unclear value proposition and weak product differentiation.  

There are tons of products in every better-for-you category. 

What makes yours unique? What would make people buy it?  

How can you increase the probability of driving product trials?  

I’ve talked to many CPG founders. I’ve also engaged with other global agency founders and retail specialists to find the answer to this.  

This is what I’ve got – develop a compellingly different brand behind your product.  

If you want people to notice your product, it must stand out.  

If you want people to choose your product vs your competitors, it must be differentiated.  

If you want people to part with their money to try your product, it has to offer value.  

These are the core components of brand development:  

• Value Proposition Statement  
• Unique Selling Point  
• Brand Identity  
• Visual Design  
• Messaging 

Some actual examples of strongly differentiated brands are: 

1. Blender Bites – 1-step healthy smoothie  
2. Freestyle Snacking – a hassle-free pouched olives  
3. Unite Foods – a protein bar with unique global flavors  

 A strong brand gives clarity on what makes your product unique and better.  

This year, I urge you to revisit these aspects of your CPG brand.  

If you’re having challenges with product trials, perhaps your offer is not attractive enough to your target audience. Or, perhaps you need more clarity on who is your primary audience.  

As you go deeper into your brand development components, these are the key tactical elements that must be addressed: 

• Brand Name 
• Brand Logo  
• Packaging Design 
• Website UI and UX  
• Marketing Messaging  

Your first growth pillar for 2024 is to figure out how you can strengthen your brand so you can encourage and drive more product trials.  

As I’d love to say, you can never win with a losing product.  

But even a great product would lose without a winning brand.  

Growth Pillar #2 - Generating Repeat Purchase  

Now, it’s exciting to have people try your product.  

But with all your investments, marketing, and customer acquisition costs, getting them to try your product once is not enough.  

You need to generate repeat purchases.  

And what drives this? Product Quality.  

This is where taste, flavor, texture, nutrition, appearance, and features matter a lot. 

Even if your brand is on point and you’ve got a compelling marketing message, your product shouldn’t disappoint.  

If you’re in the pre-launch stage, be sure to secure as much feedback from consumers as possible.  

If you’re already in operations, you can still iterate as necessary.  

One of the common mistakes that I see other founders make is limiting their feedback loop with family and friends.  

That’s well and good but how honest can our loved ones really be to our businesses, right?  

Don’t be afraid to bring out new product ideas to the public even in the initial stages if you’re looking to get actual input from the market.

You may even want to involve them and build in public.   

Say you’ve already got an amazing product and your customers are awed by it, can you expect them to just buy again and again?  

No, no one does that, not even the most loyal of customers.  

You need to ensure that you stay in touch and connect with your consumer base regularly.  

How can you do this? Some tactical tips:  

• Social Media Marketing – create regular engaging posts 
• Email Marketing – incentivize people to sign up and market to a list  
• Retail Displays – capture their attention and remind them while shopping  

I’ve seen founders neglect building an email list, so I hope you don’t make the same mistake.  

Having a list of customers is one of the most valuable assets you can build for your CPG business.  

Whether you focus on DTC or expand on retail later, there are tons of opportunities that can be derived from having a list where you can market your product to.  

Growth Pillar # 3 - Expanding your Distribution Count 

Speaking of expanding into retail and increasing your distribution count, this should be your 3rd growth pillar.  

If product trials are driven by brand development and repeat purchase is influenced by product quality plus marketing, your expansion is anchored on your sales.  

90% of the CPG founders that I’ve talked to would typically start with e-commerce and then expand to retail after some time.  

A guiding ethos that I found would be this – never expand unprepared or for the sake of growth.  

This means that not every expansion opportunity would be a great opportunity for you.   

You must look at your:  

• Capitalization – can you support expansion expenses? (Hint: retail is super expensive)  
• Operations – do you have a distribution network? Can you handle customer concerns? Do you have a marketing team helping you?  
• Production – can you accommodate a higher volume? Do you need a co-packer? What about a co-manufacturer?   

Pursue growth but just be sure you’re prepared and anticipating the nuances that come with it.  

Another observation I had with my engagement with CPG founders is that the majority only focus on DTC and retail. But there are other sales channels that you can tap into: 

1. Airports 
2. Specialty stores 
3. Hotels and resorts 
4. Restaurants and cafes 
5. Universities and colleges 

Find other channels that fit your brand and where your target market hangs out.  

You may even find less saturated distribution doors, which gives you a stronger edge.   

In summary, these are the 3 growth pillars for CPGs this 2024: 

1. Driving Product Trials = Strategic Brand Development  
2. Generating Repeat Purchase = Quality Delicious Product + Marketing  
3. Expanding Distribution = Strong Sales and Operations  

If you want some boost of inspiration, I recommend kicking off your year by learning from other CPG founders. Listen to my podcast - The Best of Brand Start in 2023.   

P.S. We help better-for-you CPGs drive product trials through brand development. If you need help and want to explore how we can support you, we offer a 30-minute discovery call here.