Sam Farooqi

There's a subtle but HUGELY important trend playing out in CPG that may have ripple effects across the entire industry: Modern consumers are starting to care less about legacy brands. This article was specifically about Kraft Mac & Cheese, but I think it's indicative of a wider trend happening across the CPG landscape, and in alcohol in particular. Many multi-national, household name brands don't carry the same weight with consumers that they did even five or ten years ago. So, what does this mean & what are the implications? Well, it has lots of implications but two things I feel strongly are true: 1. This is a particularly interesting time to be launching and scaling challenger CPG brands 2. Big CPG conglomerates will need to get aggressive in shaking up their portfolios Going to be an exciting and interesting few years in the space!

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AlixPartners views private brands as a $100 billion opportunity for U.S. grocery over the next 5-10 years — but many retailers aren't prepared to take full advantage. Striking the right manufacturer partnerships will be the difference for grocers that succeed in building value-creating, traffic-driving private brand programs. Check out the full article from my partners Matthew Hamory and Randy Burt for a deep dive... #grocery #retail #privatebrands

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When CVS Health acquired Signify Health for $8 billion in March 2023, it wasn’t just a bold move into value-based healthcare—it also highlighted how treasury teams drive success in high-stakes transactions. 🏥 The acquisition of Signify Health by CVS Health brought several key benefits: it expanded home care services, enhanced digital health capabilities, and helped integrate patient data, making healthcare more efficient. These improvements played a key role in CVS's 10.6% year-over-year revenue growth in Q3 2023, showcasing the deal’s positive financial impact. 🔑 Treasury’s Key Contributions: 1️⃣ Liquidity Management: Treasury ensured sufficient funding, balancing cash reserves and debt during a time of rising interest rates. 2️⃣ Cost Optimization: By carefully managing capital costs and debt structures, treasury ensured financial stability despite macroeconomic pressures. 3️⃣ Risk Mitigation: Proactive planning helped protect CVS from unforeseen financial challenges both during and after the transaction. This deal proves that treasury is no longer just a support function—it’s a strategic partner that ensures M&A success. 💡 How does your organization’s treasury team contribute to strategic decisions like M&A? 😁 #MergersAndAcquisitions #M&A #Treasury #FinanceLeadership #CorporateStrategy

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In case you missed the WSJ article the other week on the impact distribution has on retail grocery prices, I did a quick follow-up on The Journal podcast. It's a quick 15min and worth a listen. Shout out to Jesse Newman for the assist. To save you time, here are the main highlights (spoiler, none of these are things you all haven’t heard from me before): 1️⃣ Distribution is financially extractive for emerging brands. Always will be until something changes. You need to know that going in and be prepared. 2️⃣ The model of scaling grocery retail presence through distribution will NEVER be profitable for a small, emerging brand (hard truth, but still very much a truth). Many retailers have equal blame here. 3️⃣ When you are contractually obligated to not talk bad about a distribution partner in public (yes that is written into your contracts), you kinda just have to laugh when asked what those relationships are like. 🤷‍♂️ 4️⃣ Consolidation across our entire food system (from processing, to Big CPG, to distribution, to retail) is a major problem and the main reason why it's so hard for small and emerging brands to make it and the main reason why our food system is filled with so much junk. 5️⃣ If you don't have money, come from money, or have easy access to money, you probably shouldn't start a CPG brand today (with hopes of scaling in retail anyway).

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Coach Tony Bennett’s retirement marks the end of an era in college basketball, and what an incredible journey it has been. Known for his humility, composure, and unwavering focus on integrity, Bennett has set a standard for leadership that goes far beyond the game. His time at University of Virginia wasn’t just about winning—though let’s not forget the unforgettable 2019 National Championship. It was about molding young men into leaders who could handle life’s challenges, not just full-court pressure. Bennett’s "five pillars"—humility, passion, unity, servanthood, and thankfulness—are the foundation of everything he built. He showed us that culture matters more than the scoreboard, and that success is measured in the character of those you lead, not just the number of titles you win. What stands out most is how Bennett led with calm in the storm. In a world where coaches are often measured by their intensity or brashness, Bennett stood out for his quiet confidence and resilience. He proved that you can win without losing your soul, and that grace under pressure can be as effective as any offensive strategy. His legacy is one of excellence, both on and off the court. Thank you, Coach Bennett, for showing us what true leadership looks like. #leadership #integrity #coaching #mentor #humanresources

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Keurig Dr Pepper to acquire GHOST lifestyle for $1.6 BILLION 🤑 Ghost sales have quadrupled over the last 3 years after launching a joint venture with ZX ventures (Anheuser Busch) to launch the brand into energy in 2020. Let's break down the deal👇👇 1/ First, a brief history on GHOST Founded in 2016 by Dan Lourenco & Ryan Hughes & based in Chicago (shoutout!), GHOST was the original ‘label transparency’ pioneer that differentiated it. I think of the brand as somewhere between gym shark & liquid death. GHOST did not raise much money until 2020 when it launched a joint venture with ZX ventures (AB-Inbev). The partnership with AB was a joint venture, and purposeful to launch GHOST into the energy category. Unclear the valuation at that point but my checks say 10 figures. 2/ Deal Structure There are two bites here. First, KDP will buy 60% for $990m in cash - a $1.6B valuation / 3x FY24 sales In the second part of the transaction, KDP will buy the remaining 40% in 2028 at a valuation that has already been decided depending on 2027 financials 3/ Comps Valuation - this is the largest private bev M&A in recent history. I've been tracking headline M&A in a database since 1/1/2023, and this one dwarfs the rest in beverage: 👻 Ghost - $1.6B ☕ La Colombe - $900m ⚡ Bang Energy - $362m 💪 OWYN - $280m Revenue - Ghost is the most scaled private & independent asset in energy outisde Red Bull. KDP told us the valuation was 3x FY24 sales, imputing ghost has $530m. I describe a 3x sales multiple in the category as 'good not great' as there are a handful of recent precedent transactions that have a higher multiple: 🥜 Nutpods - 4x 🏺 Humm Kombucha - 3.75x 🌡 Celsius currently trading around 4.4x The 'good' sales multiple leads me to believe that Ghost also commanded a 'good' ebitda multiple - which would be around 13x in my comp set. This would imply that Ghost had very strong EBITDA margins in excess of 20% after KDP accounted for synergies/addbacks 4/ Time to Value (IRR) 1 thing that has stood out recently is the age of the businesses being acquired. GHOST was founded in 2016, 8 years ago - this is an outlier for a transaction of this size. HUGE time to value. OWYN was around the same age and was acquired for $280m - a huge success in its own right that gives you some reference for just how well Ghost has done. 🛀 Aesop - $2.5B / 36 yrs 🚬 NJOY - $2.7B / 17 yrs ☕ La Colombe - $900m / 29 yrs -- I'll be going deeper into the deal & providing the data/comps I used to make this analysis, + my notes from the earnings call in my newsletter going out tm Yes I woke up to listen to the earnings call, so please subscribe to my newsletter at the link pinned to my profile 🙂

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If you want to understand how a company creates value, looking at the CEO’s functional origin isn’t a bad place to start.  For example, value creation for a CPG company comes primarily from the strength of its brands. Not surprisingly, most CPG CEOs have a background in marketing and brand management.  Like many jobs, it is hard to master brand building if you haven’t had a brand management job (or several of them).  And it is hard to run a brand company if you don’t personally understand how brands are built. If this seems like an odd preface to a post about Campbell’s news burst this week, stay with me and I’ll close the connection. Campbell’s had a bad day Wednesday.  They missed analyst estimates for revenue and profit (EPS was OK), and they surprised the market by announcing the “retirement” of their CEO, who is actually not retiring, just leaving to go run an NFL team. The share price was -6%. Somewhat lost in the big headlines, the company also announced its new CEO – who is the prior CFO and current President of the Meals and Beverage unit.  If you look at his bio, he is a very accomplished finance leader with prior roles Goldman Sachs and as CFO at Chobani among others.  But he is not a brand builder by trade. This succession plan is atypical for a brand management company.  I am not sharing this as a criticism and certainly not as a commentary on a leader I have never met and know very little about.  But it makes me wonder if the CPB Board expects a different path to value creation in the future.  Unconventional moves are not always bad ones. Performance at CPB and across its peer set certainly suggests the industry could use some new thinking.  https://lnkd.in/gz3JA8VY

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“I thought it was absolutely essential to carve out our hard discount in a separate division” Bank told investors Thursday (Feb. 22). “I want to really operate the hard discounters as hard discounters.” Assortment strategy is one of the most important topics for CPG brands. Aldi, carries about 1400 SKUs. No Frills carries many many many more. If you don't know A) What are the two SKUs you need No Frills to carry, B) How to optimize that assortment for efficiency in labour and shoppability, 2026 might be painful. It's a long way away. But not that far away. (I have no actual knowledge on timing - but guessing that a transformation in a multitude of categories to a much more ltd assortment will take time. Some categories will likely face the pain much earlier). I'm looking forward (?) to hearing if Loblaws shares more on Hard Discount strategy at the supplier summit next week.

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WE ARE IN A GLOBAL ECONOMIC FUNK, BUCKLE UP! When Stalwart Brands Like PepsiCo Trim Revenue Expectations We Should Pay Attention. We are still ducking Covid, two wars, inflation (prices remain high) as do interest rates. Asian markets have slowed down as have their factories. Oil prices are on the rise again. And one report says consumers plan to spend the same amount of money on Halloween (for example) as they did last year. One of the reasons PepsiCo and others are trimming revenue. Consumers are getting less for their money. Which means everything else is expensive and they will not buy more than they can afford. The grip of higher prices and keeping a roof over one’s head and food on the table is a bigger priority than splurging. Retail therapy today is more akin to balancing the home Economics budget and taking care of necessities. #retailing #strategy #ceo #technology #innovation

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Raising a pile of cash is easy if you know the right people; turning it into profit is where the real trouble begins. “Former WeWork CEO Adam Neumann’s latest real estate venture, Flow, is facing challenges as one of its key properties in Nashville grapples with significant financial difficulties. The 358-unit apartment complex at 2010 West End Street, marketed as “a beacon of luxury living in the heart of downtown Nashville,” has incurred losses exceeding $7 million between 2022 and 2023. Flow, launched in 2022 with a $350 million investment from venture firm Andreessen Horowitz, acquired stakes in six apartment buildings, including the troubled Nashville property. However, the company’s ambitious plans have hit a snag as the Nashville investment struggles to meet financial expectations. Crowdfunding platform Yieldstreet, which helped raise capital for the property, has informed equity investors that their investments could potentially be wiped out. The platform, along with Flow, is currently in discussions with the building’s lender to explore options such as a sale, recapitalization, or debt restructuring to salvage the deal” https://lnkd.in/efbFujAK https://lnkd.in/efbFujAK

Be crystal-clear about your emerging CPG brand's end game. There are many motivations that drive entrepreneurs to start and build their emerging CPG brands. The last twenty years has seen an explosion of innovation and new entrants that challenged in some instances shocked large CPG incumbents out of their stagnant and slow growth mode. Changing consumer consumption patterns, cheap capital, low interest rates, social media marketing capabilities, excess co-packing capacity and distributors and retailers wanting to capture new growth set the foundation for entrepreneurs of all ages to enter various categories. Millennial (and now Gen Z) entrepreneurs used their digital smarts to level the marketing playing field with large competitor incumbents. Innovation and marketing experts from large corporations jumped ship to take charge of their own destiny - Some when they retired and some while in the prime of their corporate careers. Following the tech startup patterns and culture….starting, scaling an emerging CPG brand in the hope of a large payday became a credible choice for many graduate and post graduate students. There is a portion of CPG entrepreneurs that want to build a generational business, perhaps start a dynasty or build a long-term business centered on greater purpose and good. Most founders and co-founders that I have met and or worked with want a successful exit. Some are realistic about their prospects, and some are not. A good place to start is to be clear about your brand’s end game and importantly about the realistic time horizon and funding that it will meet against that aspiration and timeline. #entrepreneurship #exits #emergingCPGbrand #CPG #foodandbeverage #scaling

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Ready-to-drink (RTD) beverages are shaking up the market, but standing out requires more than a catchy name and a flashy can. Our recent AlixPartners article outlines how to thrive in the #RTD revolution: · Know Your Competition: The RTD landscape is evolving, with new players blurring traditional category lines. Rethink your competitive playbook and embrace unconventional partnerships. · Understand RTD economics: Smaller margins, self-cannibalization, and the need for value chain partnerships make RTD economics fundamentally different. Refine your financial planning for sustainable growth. · Evolve your execution and operational capabilities: RTDs play by FMCG rules. Adapt your business model, build capabilities, and infuse the FMCG experience to get ahead. Read the full article for more insights from our beverage team.

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💡 The Power Players of U.S. Retail! Take a look at this fascinating chart showcasing the top U.S. retail companies by market capitalization as of September 2024. 📊 From Chipotle Mexican Grill at $78.96B to the retail titan Amazon leading the pack at a staggering $1.957T, this ranking reveals the diverse strengths of companies across industries like e-commerce, fast food, coffee, and home improvement. A few things to consider: 🔹 What strategies have helped Walmart and Costco Wholesale sustain their massive scale in traditional retail? 🔹 How do brands like Nike and Starbucks continue to thrive in fiercely competitive niches? 🔹 With Amazon's dominance, what opportunities exist for smaller players to carve out their niche? What trends do you see shaping the future of this list? Let me know in the comments! 👇 Source: Retaildogma #RetailIndustry #MarketTrends #ConsumerBehavior #RetailStrategy

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Instacart reported what Chairman CEO Fidji Simo called “strong” Q2 2024 results, including including 10% year-over-year growth in GTV (gross transaction value), its third straight quarter of positive GAAP net income, and considerable gains in adjusted EBITDA and operating cash flow. “Our performance reinforces our leading position as the largest online grocery marketplace in North America and highlights our best-in-class customer experience underpinned by industry-leading delivery speed and order quality,” noted Simo in an Aug. 6 earnings call. CFO Emily Reuter expanded on this topline information, noting that the GTV growth comprised order growth of 7% and average order value growth of 3%. Reuter attributed the quarters higher basket size – the key driver of Instacart’s outperformance – to such factors as new customer cohorts reaching bigger basket sizes faster, existing customers making larger purchases over time, and a higher mix of club orders. | Progressive Grocer https://lnkd.in/gCqAX3Gc #retail #ecommerce #grocery #supermarkets #technology #Instacart

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Congrats to Eva Davis and Kimberly Spoerri who led the recent $990 million acquisition of a 60% stake in GHOST by Keurig Dr Pepper Inc. This substantial deal shows the continued interest in established consumer brands expanding through acquisition of relatively newer brands who've quickly gained market share in sports nutrition - a category that was once considered niche but has expanded rapidaly into a larger market presence. We anticipate deal activity to pick up in 2025 as both private equity dry powder will get deployed and stalwart brands will continue to seek revenue growth opportunities. #acquisitions #consumerpackagedgoods #startupCPG #fractionalCFO https://bit.ly/4gaQPr4

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I recently read about Ram Krishnan, CEO of PepsiCo North America, and his use of a color-coded pie chart to manage time. It’s a great reminder: our calendars don’t just show what we do—they show what we prioritize. For me, aligning my time with my personal values is something I am always trying to improve on. As a leader, that means dedicating time to visiting and listening to our teams, supporting growth, and planning for the future. As a husband, father, and person of faith, it also means being consistently present for my family and staying connected to what keeps me grounded. This balance is never perfect, and it looks different for everyone, but being intentional makes all the difference both personally and professionally. How we spend our time reflects what we value. #Leadership #TimeManagement #Values #Priorities

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This might be the most influential building in our industry. 84.51˚ is a subsidiary of Kroger and is an incredible not-so-secret weapon in ML-driven data analytics. This 2015 acquisition has been the powerhouse behind the rise of Simple Truth, and their evolution into mainstream adoption of natural and organic product. They analyze over 3 billion shipping baskets per year to deliver over 1 billion personalized offers across 1250 CPG brands. If there is one clear pro-consumer benefit to a Kroger-Albertson’s merger, it would be to integrate all of Albco’s loyalty data into 84.51. There is nothing about this concept that is limited to Big CPG brands. It can work for emerging innovation brands also. The only problem is that the 84.51 data can’t analyze what Kroger isn’t already selling, so it works better for Fast Followers than true FTM innovation There are two ways Pod Foods can help with this: 1. 👉We can sell our cutting edge innovation brands to a few divisions of Kroger to work those data points into the 84.51 algorithms. 2. 👉We have our own ML-enabled data platform, which is PREDICTIVE of what is going to be hot on 84.51…18 months before it happens. Pod Foods Kroger #innovation #grocery #machinelearning

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The U.S. retail sector is facing choppy waters ahead of the National Retail Federation next month marked by the blockage of a major supermarket merger and the potential sale of a leading pharmacy chain. Kroger - Albertsons Merger Blocked In a landmark decision, a federal judge has halted Kroger’s proposed $24.6 billion acquisition of Albertsons, which would have been the largest supermarket merger in U.S. history. The Federal Trade Commission (FTC), along with several states, opposed the merger, arguing it would reduce competition, potentially leading to higher consumer prices and diminished bargaining power for unionised employees. U.S. District Judge Adrienne Nelson concluded that the merger would result in undue market concentration in multiple regions, thereby lessening competition. Kroger and Albertsons had contended that the merger was necessary to compete with retail giants like Walmart, Costco, and Amazon. They proposed divesting 579 stores to C&S Wholesale Grocers to address antitrust concerns. However, doubts about C&S’s capacity to manage a large-scale retail grocery business effectively led to further apprehensions. Walgreens Boots Alliance in Sale Discussions Concurrently, Walgreens Boots Alliance, the parent company of Boots UK, is reportedly in talks to sell itself to private equity firm Sycamore Partners. This potential sale highlights the challenges faced by traditional retailers amid high inflation and intensifying competition. Walgreens has announced plans to close 1,200 stores over the coming years after reporting a nearly $9 billion net loss for its 2024 fiscal year. The company’s market value has plummeted from approximately $106 billion in 2015 to about $8 billion. The discussions with Sycamore, known for investing in struggling retailers, could lead to a deal finalised by early next year. The potential sale yet again raises questions about the future of Boots, which operates over 2,000 pharmacies in the UK and remains a strong performer within Walgreens’ portfolio. 🛒Implications for the Retail Industry These events reflect the shifting landscape of the U.S. retail sector. The blockage of the Kroger-Albertsons merger signifies a robust stance by regulators against consolidation that may harm consumers and workers. Meanwhile, Walgreens’ potential sale underscores the pressures on traditional retailers to adapt to changing market conditions and consumer behaviours. 💬 Sure to be a topic of discussion at the NRF. Join us from January 12-14, 2025, in NYC to explore how IBM is transforming retail at Booth #4639. More here: https://lnkd.in/dzY42Bmf. See you there! #TheCPGGeek #IBMRetail #IBMConsumer #FMCG #ConsumerGoods #Luxury #Fashion #Retail #Proud #RethinkRetailTopExpert #NRFRetailVoice RETHINK Retail #RethinkRetail National Retail Federation #NRF

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