What Do Investors Look for in CPG Brands?
One of the most common questions I hear is, “What do investors look for in CPG brands?” After working with a wide range of emerging CPG brands, mentoring with SKU, and evaluating potential investment opportunities with The Angel Group, I can tell you. Investors are drawn to brands capable of sustainable growth while maintaining control over their financials.
At Balanced Business Group, we’ve helped founders craft financial strategies that entice investment in consumer goods and set up their brands for long-term success. Below, I share the most important elements investors look at when considering emerging CPG brands and give advice on how to prepare your business to thrive.
1. Great-Tasting Product & Demonstrating Product-Market Fit
No amount of marketing can sustain a business if the product doesn’t hit the mark with consumers. Investors want to know that your product tastes great (or performs exceptionally if it's not a food product) and fits into a clear market demand. You can have the best branding, marketing, sales team, and distributors in the world, but without a great product, repeat purchases are unlikely.
I always tell founders to focus on velocity. It’s the number one metric that shows investors you’ve got something worth scaling. Velocity, in simple terms, is the rate at which your products are flying off the shelves. Whether it’s granola bars, organic sauces, cold-pressed juices, or plant-based snacks, strong velocity is a clear sign of product-market fit. It shows that consumers aren’t just buying your product once — they’re coming back for more, and that’s what makes your business sustainable.
Tap into customer feedback, sales data, retailer reorders, and consumer testing to prove your product’s market fit. Did you know 95% of new product launches fail each year? It’s because they don’t validate their product-market fit. Be the 5% that does. If you’re seeing consistent reorders from retailers or online platforms, you’ve got the data to prove to investors that your brand resonates with customers.
Think about the rise of plant-based snacks. If you’re in that space, investors want to see that people are trying your new jackfruit jerky not just once, but repeatedly. Are your grocery partners asking for more? Are your online sales growing month after month? And how is your product being received in different regions or markets?
2. Brand Story and Differentiation
Investors are drawn to brands with compelling stories that go beyond the product. They want to see how your brand connects emotionally with consumers and stands out from the competition.
Your brand story must emphasize sustainability, innovation, or unique cultural heritage. It can also revolve around your founder’s journey, the purpose behind your product, or the passion that drives your mission. What makes your product different? Why should someone pick your product over the 50 others on the shelf? Investors will look for this narrative because a strong story can drive consumer loyalty, media attention, retail partnerships, and influencer collaborations.
Say you’re a CPG company that specializes in artisanal chocolate made from ethically sourced beans. The story of why you took that route, how they’re harvested, your relationships with farmers, and the sustainable farming practices become part of the brand’s DNA. Investors will see this as a point of differentiation that attracts customers and aligns with broader market trends toward ethical consumption. Consider how competing brands have built an entire identity on these values. Investors look for this type of impact.
3. Strong Leadership and Team
A capable, experienced, and passionate team is often just as important as the product itself. When evaluating a brand, investors will take a close look at the leadership team and their ability to execute the business plan.
Investors want to see a team that understands the nuances of the CPG industry, has the skills to scale a business, and can weather the inevitable challenges of distribution logistics, supply chain setbacks, and changing consumer trends. Whether it’s navigating supply chain disruptions or adapting to market shifts, the strength of the leadership team is often the difference between success and failure.
If you’re a founder, highlight your leadership team’s industry expertise, operational experience, and ability to overcome hurdles. Have they worked at other successful CPG brands? Have they scaled startups before? Do they have strong backgrounds in operations, marketing, or finance? Showcasing your team’s collective talent, alongside examples of your team’s resilience, is key.
Maybe you’re a company founder with deep industry experience in food science, your COO has scaled DTC brands, and your CFO has worked with venture capital-backed startups. Investors will immediately see the value in a leadership team that understands product development and knows how to build retail relationships and balance financial growth with expansion. Highlight this prominently in your business plan and in-person presentations.
4. Scalability and Growth Potential
Investors are always thinking about the future. They want to know that your brand has the potential to grow and scale regionally, nationally or globally. Scalability in the CPG world often comes down to your supply chain, operational efficiency, production capacity, and distribution strategy.
One way to demonstrate scalability is by owning or controlling key aspects of your production process. If you own your manufacturing or have strategic partnerships with contract manufacturers or co-packers, that’s a green flag for securing CPG funding. It shows you’re capable of meeting increased demand without sacrificing quality, margins, or sustainability. Additionally, expanding into new markets or channels — such as moving from DTC to wholesale or launching in national retailers — is a clear sign of growth potential.
Investors will also evaluate your distribution strategy. Are you relying solely on one channel, or have you diversified across multiple? Have you set up the infrastructure to support a growing business? These are all questions investors will ask when considering the scalability of your brand.
Let’s say you’ve been selling your beverages online, but you’ve just secured a deal with Whole Foods. Investors will see this as a sign that your brand is scalable, especially if you’ve already invested in logistics, warehousing, and transportation to handle the increase in volume. Demonstrating how you’ve planned for production peaks, seasonal variation, delivery challenges, and international expansion will go a long way.
5. Financial Health and Profitability
While financial health might not be the first thing investors look for in emerging brands, it’s certainly a key consideration. They want to know you understand your unit economics and track key financial metrics such as gross margins, sales growth rate, customer retention rate, and cash flow. Even if you’re not yet profitable, demonstrating a path to profitability is necessary.
Investors want to see that you have a plan in place to grow your margins over time. That may be through scaling production, reducing costs, optimizing supply chain processes, or increasing your price point as demand grows.
Make sure your financials are clean and easy to understand. Investors don’t have time to dig through messy financial statements. Present clear, accurate, and well-organized reports that show you know your numbers inside and out. Also, be ready to discuss how different market conditions, such as inflationary pressures or rising costs, will impact your cash flow and profitability.
If you’re currently operating at a loss but can show that your margins will improve significantly once you hit a certain production volume, highlight that. Investors will appreciate your foresight and understanding of the financial levers that can lead to profitability. Use concrete data to back up your claims and show a clear trajectory toward financial sustainability.
Important Financial Metrics for Investors in CPG Brands
Here's a table outlining the most important metrics investors look for when evaluating CPG brands:
| Key Metric | Description | Why Investors Care |
|---|---|---|
| Velocity | Rate at which products are sold | Indicates product-market fit and consumer demand |
| Gross Margin | Profitability after production costs | Shows how well you control costs and scale profitability |
| Sales Growth Rate | Year-over-year revenue growth | Demonstrates business momentum and market traction |
| Customer Retention Rate | Percentage of repeat customers | Reflects brand loyalty and potential for long-term growth |
| Cash Flow | Available cash after operating expenses | Shows financial health and ability to weather challenges |
Preparing Your CPG Brand for Investors
To stand out, focus on refining your financials, demonstrate strong product-market fit, and build a team that exudes confidence and competence.
Balanced Business Group specializes in working alongside founders to develop tailored accounting and financial strategies that attract investors for CPG brands and secure your brand’s future. Get in touch with us today, and let’s make sure your brand is truly investment-ready.
Learn more about how to prepare for CPG brand investment in our articles on Equity Investment for Startup Food Brands, The Strategic Role of Financial Modeling, and Key Financial Metrics for Food and Wine Entrepreneurs.
Author Name: Pedro Noyola
Author Bio: Pedro Noyola is the CEO of Balanced Business Group (BBG), a company dedicated to helping Founders in the CPG food and beverage industry gain financial confidence. At BBG, Pedro combines traditional accounting with tailored financial guidance, providing industry-specific insights to ensure sustainable growth for passionate food entrepreneurs. He is also an angel investor and a mentor to emerging CPG brands via SKU and TIG Collective. Pedro’s career spans leadership roles at FluentStream, where he helped the company achieve recognition as one of the Fastest Growing Companies in America by Inc., and Telogis, where he was part of a team that grew the company’s recurring revenue from $50 million to $1.2 billion in under five years.
Pedro holds a BA and MPA from The University of Texas at Austin and an MBA from Harvard Business School. He is an active member of the Young Presidents Organization, continually seeking growth in both leadership and learning. Outside of work, Pedro enjoys family time and outdoor activities, drawing personal fulfillment from his roles as a husband and father.
