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Investing in Consumer Packaged Goods

2 min read Investing in CPG The CPG space is a solid one to invest in, especially in a post-COVID era. There are specific cues that make startups stand out to investors. You should make sure that any company you are considering investing in has a competitive edge and strong customer engagement. And you, as an investor, are going to need the patience to succeed in this sector. Competitive Edge Investors want a considerable market size in the future, and they want to see a competitive edge. If you have a massive market it probably means there are people in it already. Ideally, you want to find a company entering a market that will be meaningful enough with high growth rates that aren’t over-saturated. An example of this is nonalcoholic beer. It isn’t as saturated as the IPA sector, but it’s meaningful and on the rise. Customer Engagement You can measure customer engagement in a variety of ways. Engagement can happen on the company’s social channels, through different marketing activations, and through other methods being used to reach customers outside of digital channels. Omni Distribution Investors should look for companies with omnichannel forms of distribution. Single-channel and single customer models lead to too much concentration. Also, more channels require more brand awareness opportunities. Getting distribution is hard for the CPG producer. The big firms block out the small firms. Look for companies that have found creative ways to bring the product to market. CPG Takes Time Everything in CPG takes longer than you expect. When you’re investing in a CPG company, you have to be patient. Unlike software, the startup cannot go from one to one billion users overnight. It takes a long time to bring the product to market. The company has to prepare its packaging, get production up and running, be ready to ship, acquire distribution, be able to refill orders, and more. As an investor, you have to come in knowing that it’s a longer cycle and it’s a different risk profile. Once the consumers are in that buying cycle, however, it’s a beautiful thing to see it. Read more in the TEN Capital eGuide: http://staging.startupfundingespresso.com/trends-in-cpg/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

Trends in CPG

3 min read  Let’s look at some trends in CPG in this Post-COVID World. The consumer packaged goods sector consists of companies that manufacture and sell products for consumer use. Examples of consumer packaged goods include mainly food and beverages, but also cosmetics and cleaning products. Solid trends are being seen in the CPG market today, many of which are being derived out of COVID-related necessities. COVID has changed the way we look at, interact with, and, most importantly, shop in our society today. It is no longer enough for a product to taste good; it must also fill a specific need. We have new drives and values, and everything we purchase should align with this in one way or another. This desire for more has led to an industry-wide focus on health, wellness, and function. Functional Beverages The functional beverage sector is now approaching 100 billion dollars a year. The functionality of beverages has moved in step with the functionality and food-as-medicine trends seen recently in the food and supplement spaces. This macro trend is no longer sufficient that a food or beverage product isn’t bad for you or that it’s dye compliant. This product must also do something positive for you. Functional benefits can include cognitive health, pre-workout, post-workout, collagen for your skin and joints, digestive health, immunity building, anti-inflammatory, or combinations of these categories like hydration and wellness. What we’re seeing is a lot more dialed-in nutrition that is tied to different functions, whether those are probiotics and gut health with drinks like kombucha, or sleep aids with drinks that contain magnesium citrate and melatonin. We’re also seeing significant growth on a focus on working from home. Functional beverages that allow you to focus, work, watch your children, and teach school all at the same time are causing a lot of growth across the functional beverage industry. Health and Wellness Another trend being observed in CPG is the movement towards using clean ingredients and promoting wellness. Consumers are getting more intelligent and more sophisticated about what elements are going into the food and beverages we consume. The fewer ingredients- the better. The less processed- the better. The cleaner the ingredients- the better. And we’re just as focused on what we’re applying topically because that’s a part of overall health and wellness. The growth of the natural channel and the healthy alternatives is a long-term trend, and it’s not going to slow down; if anything, it’s going to speed up. This creates a tremendous opportunity for new CPG brands to continue to innovate and move into this space. We now see a move to meatless and vegetable-based proteins, products with low or no sugars, fats, or salts. In wellness, there has been a heightened focus on calm and anti-anxiety-oriented products. Cognitive functionality is a significant and growing trend in food and beverage. Understanding the ingredients set that are available to address ways in which you can get both taste and efficacy is vital. Read more in the TEN Capital eGuide: http://staging.startupfundingespresso.com/trends-in-cpg/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

Changes in the Wine Space

2 min read We now live in a time when the internet has disrupted virtually every industry, from retail, to music, publishing, and travel, many agree that the internet has forever changed the way the world works. Yet there remains a relatively untouched industry. The Wine Space has yet to see the disruption that other industries have faced. Only 5% of wine in the United States is currently sold online. Considering we live in a world driven by the internet, this is a strikingly low number. That may be set to change. What we are now seeing in this industry are some massive shifts primarily driven by Millennials. Millennials tend to be at the forefront of new technologies and are responsible for driving a large number of sales. They tend to be much more digital, and their buying habits reflect that, even when it comes to alcohol. Another trend the wine space is currently seeing is due to the seismic shift we’ve experienced because of COVID-19. The pandemic has caused a massive fundamental change in buying habits across all demographics, which spells good news for the industry and points to the potential of having a tremendous social impact. Within the wine space, vineyards and wine stores are predominantly owned and run by immigrants. According to the data provided by Yahyn, a platform that brings together retailers and vineyards with a focus on Amazon-like convenience to purchasing, 60% of both wine stores and vineyards are owned and operated by immigrants. In certain cities that have a higher concentration of immigrants, that number jumps up to 90%. As the industry continues to evolve and more purchases happen online, we’re likely to see an increase in business for these shops and vineyards. While the economic impact is a positive for the industry, the potential social implications could mean great things for these immigrant operated businesses. Read more: http://staging.startupfundingespresso.com/eguide/ Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

Food & Beverage Investments in Q4 2016

The Food and Beverage Industry has seen over $2.8B in funding in nearly 270 deals in Q4 2016. The Ingredients and Flavorings industry leads the way with over $2B worth of funding in 19 deals, followed by Candy & Snack Foods at $221M in 62 deals. Meat, Fish, and Seafood follow with $185M in funding. Check out the complete list of funding and deals by industry: Industry Funding Total # of Deals Ingredients, Flavoring & Condiments $2B 19 Candy & Snack Foods $221M 62 Meat, Fish & Seafood $185M 13 Non-alcoholic Beverages $115M 51 Alcoholic Beverages $73M 69 Food Safety & Preservation $53M 12 Fresh Foods $49M 10 Canned & Frozen Foods $48M 13 Wholesale Food Distributors $46M 6 Dairy Products $36M 8 Bottling & Distribution $7M 2 Food Service $4M 4 Total: $2.85B 269

Venture Capital Seeks Food and Beverage Investments

The food and beverage space is seeing tremendous innovation.  Venture capitalists are now making investments into innovative food and beverage companies.   Target investments must bring innovation and offer a scalable business model.  Their food & beverage investments nearly all focus on replacing common food items.  Investments typically target technologies around plant-based protein.  Often, startups raising funding are developing new processes that could change what we eat.  Several trends top the list for venture capitalists.   Here are four food and beverage trends with Texas companies leading the way: Fermented flavors – fermentation brings health benefits and for soda lovers fermentation also provides a natural fizziness to the drink.  Salt and Time and Buddha’ Brew are two Texas-based companies leading the way Food safety testing—new testing tools such as in the field mass spectrometry, and food processors are gaining attention. Evaptainers uses evaporation cooling technology to provide refrigeration for foods  and Green Ocean Sciences has developed a field mass spectrometer for food testing. Next generation foods which include cold brew coffee such as High Brew Coffee and Chameleon Cold Brew.   New fruit and vegetable offerings include novel ways of packaging and distributing fruit and vegetables.  Rhthym Superfoods offers a new way of consuming Kale.   Veggie Noodles delivers vegetables in the form of pasta, and Beanitos offers beans in the form of chips. Floral flavors – adding herbal and plant flavors to foods and beverages such as Sway Water and Daily Greens. Here’s a list of the top 24 VCs in food and beverage investing: Sequoia Capital Benchmark Capital Accel Partners Greylock Partners Andreessen Horowitz Union Square Ventures First Round Capital Bessemer Venture Partners Kleiner Perkins Caufield & Byers New Enterprise Associates Founders Fund Lightspeed Venture Partners Foundry Group Index Ventures Khosla Ventures Social Capital Emergence Capital Partners True Ventures Floodgate Fund General Catalyst Partners CRV Spark Capital Battery Ventures Redpoint Ventures

Top 10 Texas CPG Deals from 2016

The Consumer Packaged Goods (CPG) Industry has experienced a lot of change in the past several years, with in-store sales stagnating, and e-commerce sales gaining impressive traction, but the future of CPG companies looks to be bright.  And with a thriving support community, and even a CPG-focused accelerator, SKU (formerly known as Incubation Station), Texas is poised to continue to push CPG growth through 2017. In the first half of 2016, CPG online sales grew 42% across key categories compared to the first half of 2015. Each year, online sales are contributing a higher percentage to total retail sales. What’s interesting though, is that consumers don’t seem to be spending less in-store, but are simply spending more money online. Below we have highlighted the top 10 deals in the Texas CPG & Retail industries from 2016. In this report, we find that 10 companies alone brought in about $90M in investment dollars to the Texas CPG industry last year.   Company 2016 Funding Twyla $19,265,442 Snap KItchen $12,506,000 ROKA Sports $12,050,604 Tiff’s Treats $11,000,000 Charming Charlie $10,380,005 Mizzen & Main $2,999,710 Snap Drape Brands $2,325,000 Tecovas $1,798,639 The Republic Grille $1,120,000

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