FABID is a food and beverage-focused database that tracks investors, brands, and their stakeholders. … [+]
2022 has been nothing short of mixed feelings about consumer products. Amid skyrocketing customer acquisition costs and inflationary pressures, is direct-to-consumer sales still appropriate, consistent with many brands rushing to retail and aggressively lowering valuations to attract institutional capital? There is a long debate about what. Meanwhile, more influencer-turned-entrepreneurs have entered his CPG, keeping the beverage sector the most well-funded sector, but categories such as meat substitutes undergoing significant change. doing.
So what does this mean for the consumer space, and what must CPG take into the new year to be successful? Investors, Brands, and Related Fundraising Read the exclusive analysis below from FABID, the food and beverage-focused database that tracks events.
Capital markets turn into growth-stage opportunities
Reflecting stock market trends, CPG’s overall VC funding peaked in Q1 2022, reaching $1 billion, after the Fed approved the first of seven consecutive rate hikes in March. , then declined during the year.
Annual equity investment fell 12% to $2.3 billion from $2.6 million in 2021, with total trades down nearly 100. However, median VC investment is up year-on-year, suggesting funds are increasingly participating in larger late-stage rounds. Safer bets. Both prominent investment firms Siddhi Capital and PowerPlant Partners are shifting their focus from early-stage to growth-stage opportunities.
To capture limited dollars in the capital markets, consumer goods brands, including the most funded brands, are slashing valuations, cutting multiples in half compared to 2021 There are also things.
Top 10 brands funded, according to food and beverage investor database FABID
Liquid Death, a canned water brand backed by Live Nation Ventures and Velvet Sea Ventures. Same for SC
However, the Liquid Death multiple fell from 14x in 2021 to 4.8x last year. Chilled chocolate darling, Midday Square, named by co-founder Jake Karls. forbes 30 under 30 This year’s listing saw a drop in multiples after raising $10 million in a Series C in April. Meanwhile, prebiotic soda leader Olipop has seen its multiple decline from 5.7x to 2.8x in 2021 after it closed a $30 million Series B in February.
Combined with Lemond Perfect’s $31 million Series A funding and boxed cocktail brand BeatBox’s $16 million Series C funding, beverages will maintain its position as the most-funded CPG segment in 2022, It has a whopping 47% share of total procurement, followed by snacks and sweets at 13% and supplements at 8%.
‘One-of-a-kind brands’ in a growing influencer economy
2022 has definitely been the year for celebrity and influencer-backed brands. Even if the market goes down, having a loyal fan base can offset skyrocketing customer acquisition costs.
Celebrity brands from Kendall Jenner-backed 818 Tequila to Logan Paul and KSI’s Prime Hydration have collectively raised nearly $160 million, according to FABID data. Other notable brands contributing to this category include Feastables, created by YouTube sensation MrBeast. Katy Perry’s non-alcoholic aperitif De Soi. Sustainable Hazelnut Spread TBH was co-founded by Stranger Things actor Noah Schnapp. Influencer Emma Chamberlain’s Chamberlain Coffee.
Other celebrities have opted to compete head-on with longtime staples of the mass category, claiming it’s better for you in order to appeal to consumers.Co-launched by Wonder Woman’s Gal Gadot Gooddles has gone straight for more nutritious Kraft Heinz Mac & Cheese, while Chubby Snacks and Orilla have gone directly to competition with Smucker’s Uncle Stable and Mondelez’s Belvita Breakfast Biscuits. rice field.
“Being bearish can be dangerous, but it can also help establish potential exit paths,” FABID founder Ryan Williams said in its annual report. It highlights how brands can thrive by taking a small percentage. Market share from those giants.
Operational Excellence and True Market Relevance
FABID predicts that CPG will perform well across the value chain and will continue to have opportunities to control both manufacturing and distribution.
Ultimately, in-house production allows companies to test and adapt ideas, create interesting content, and ultimately have more control over their margins, Williams noted, adding that these Businesses should establish alternatives to co-packing if their brands are struggling, he added.
The most self-funded brands in 2022 included Athletic Brewing, Good Culture and Mush, which collectively raised about $162 million. AF Ventures-backed Eastern Standard Provisions and Clio Snacks also received $13.5 million in 2022 from Oreo marker Mondelēz and his $18 million additional funding, respectively.
“Long-term optimism for the industry’s future is unwavering,” Williams wrote. “Returning to fundamentals creates sustainable innovations and lasting businesses. Brands with operational excellence and true product market fit survive.”
