Why Regenerative CPG Brands Need Smarter Financial Strategies

Regenerative consumer package goods (CPG) brands strive to thrive in today's modern marketplace. Championing replenishing resources rather than depleting them, these sustainable businesses reshape customer expectations and environmental standards for the better yet they still face a significant hurdle — securing sufficient, aligned financing to sustain their growth.

The ReGen Brands report focuses on industry bright spots and challenges, including issues with financing gaps. These challenges often impede businesses' progress and leave them struggling to scale their operations. Bridging this gap requires understanding the financial landscape and developing robust financing practices and accounting for regenerative brands.

As the CEO of Balanced Business Group (BBG), I help CPG companies achieve good financial management that sets the tone for sustainability at scale. My industry-specific insights and dedication to providing regenerative CPG financial strategies has shaped how I mentor founders via SKU and TIG Collective. When you're ready to take the next step in growing your brand, BBG brings actionable strategies to the table that strengthen your business.

Insights From the ReGen Brands Report

Per the ReGen Brands report, accounting for regenerative brands must serve as a critical business function and not as an afterthought. Effective financial management equips your brand with the tools it needs to align your financing with your mission. Unfortunately, traditional financing avenues often pressure founders to put profits before principles, negatively affecting regenerative businesses in the CPG sector.

Regenerative agriculture brings increased value to farmers and boosts biodiversity within the marketplace, not to mention winning over customers with delicious taste plus health and wellness benefits. But even though the top 100 CPG companies have committed $3.2 billion to regenerative agriculture, financing isn't always easy to come by.

In fact, many brands struggle to secure funding that aligns with their mission and growth strategies. This misalignment often stems from traditional lenders and investors prioritizing short-term returns over long-term growth. The lack of aligned financing, in turn, limits CPG brands' ability to scale, stifling innovation and adoption of regenerative practices across the agricultural industry.

This ripple effect makes it difficult for emerging and growing CPG brands to meet increasing consumer demand. Overcoming these challenges means regenerative brands bring their operational and sustainability goals into alignment with their financial realities. Strong financial management practices can demonstrate accountability and foster trust with investors and lenders going forward.

The Importance of Financial Management for Regenerative Brands

A funding gap matters since it often threatens the financial alignment for CPG brands, even when you have an accountant allied with your mission. Good management, including effective budgeting, forecasting, and cash flow oversight, helps your brand balance sustainability with profitability. Having clear-cut financial records and projections also lets angel investors like me know your brand can successfully manage resources.

Neglecting financial management results in negative effects across your organization. For instance, poor cash flow management, including an inadequate cash runway, can lead to supply chain disruptions and missed investment opportunities. Likewise, insufficient financial oversight can erode credibility with stakeholders, including customers, investors, and suppliers. Also, without accurate financial data, your brand may fail to get any financing at all, much less the financing it needs to grow and succeed.

Budgeting and Forecasting for Sustainable Growth

Building accurate budgets and forecasts customized to your unique regenerative brand helps you achieve sustainable growth, and that's where BBG comes in. Our financial advice serves as a roadmap to help your CPG brand better align its operational goals with its financial resources. Try these regenerative CPG financial strategies when you're ready to take your brand to the next level.

Create Aligned Budgets

The first step in creating an aligned budget is defining your priorities. I can help you identify important areas for investment that support your growth and sustainability goals. These can include everything from sourcing regenerative materials to expanding your distribution into different regions — all with the goal of helping you reach your breakeven point.

Effective accounting for regenerative brands also means tracking expenses closely. By monitoring what you spend, you can ensure your finances align with projected budgets and help you spot opportunities to optimize your costs. Likewise, BBG helps you plan for contingencies by allocating part of your budget to unexpected challenges — or investment opportunities.

Forecast for Strategic Growth

Before founding BBG to help CPG brands gain the financial confidence they need to succeed, I held leadership roles at FluentStream and Telogis. These roles taught me that effective forecasting supports your day-to-day decision-making processes while showing lenders and investors that your brand operates with a clear financial strategy.

Using trend analysis in forecasting means putting historical data to work identifying patterns that inform future projections. Accurate forecasting helps you incorporate these market insights and consumer demand into your business plan, but it's not a one-time thing. Adjusting forecasts regularly lets you build in operational changes, fluctuations in market conditions, and modifications to your financing needs.

Strengthening Relationships With Lenders

Strong relationships with lenders form the foundation for financial alignment for CPG brands. However, securing favorable terms often depends on effective communication, transparency, and a demonstrated commitment to financial stewardship.

Building trust with lenders and investors starts with clear communication. Learn how to share your brand's vision, mission, and financial needs in a compelling way, and present detailed financials that include budgets and forecasts. Lastly, highlight how aligned financing can impact your company's profitability as well as its environmental and social commitments. 

Negotiating favorable terms saves your business money, but before you can do so, you must understand your company's most pressing needs. Identify the type of financing that best suits your operational goals, such as loans, lines of credit, or equity investments. Once you understand what you need, you can negotiate thoughtfully to ensure the terms match your long-term vision so you don't have to compromise your regenerative principles.

Lastly, leverage your lending relationships into partnerships with those who share your commitment to sustainability. I, and the knowledgeable professionals at BBG, can mentor you through these strategies. When you need assistance getting CPG brand or regenerative agriculture financing, we can also provide industry-specific insights and effective financial guidance.

Aligning Financial Strategies With Regenerative Goals

Regenerative CPG brands occupy a uniquely vital spot in the business world, blending sustainability with purpose. But your success hinges on more than just passion and innovation. Robust financial management provides the structure you need to navigate the complexities of accounting for CPG brands and sustain your long-term growth.

By understanding the challenges outlined in the ReGen Brand report, implementing sound budgeting and forecasting practices, and fostering strong lender relationships, your CPG business can secure the aligned financing necessary to not only survive in a tough market but also thrive. As part of a team that led to growing recurring revenue from $50 million to $1.2 billion in under 5 years, I offer my experience and advice to BBG's list of clients.

At BBG, we specialize in providing regenerative CPG financial strategies that help you overcome the funding challenges posed by traditional lenders. Our expertise helps founders focus on growing their businesses while keeping their regenerative principles intact. Contact us today to learn how BBG can help your CPG brand achieve lasting financial success without compromising its commitment to sustainability. 

Author: Pedro Noyola

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.