7 Reasons CPG Startups are Everywhere

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Consumer packaged goods (CPG) are noticeably on a rise, with a lot to show for it. According to Investopedia, “the CPG industry is one of the largest in North America, valued at approximately $2 trillion.”

Recent trends in CPG startups (particularly revolving around food, but extending into makeup and personal care, clothing, and even mattresses) show that some of these smaller companies are starting to crush larger providers, leaving them no choice but to substitute acquisition for innovation — take for example, Unilever’s acquisition of Dollar Shave Club.

What is it that is facilitating a rapid rise in CPG startups? And what should you keep in mind before founding your own CPG startup?

1. Building a Brand

Social media has made building a brand online an efficient way to garner a following and promote your products. The Internet is your friend, but only if you let it. It can generate huge goodwill and support among consumers, just from social media and content management.

Aside from social, the fact that more and more people are looking online to purchase items they would usually go to a store for (toilet paper delivery, anyone?) puts a much deeper emphasis on e-commerce. Relatively inexpensive subscriptions are increasingly on the rise, which means more competition, which subsequently means a better situation for the customer.

2. Access to Capital

For smaller businesses, finding some source of capital really helps accelerate the process. Crowdfunding programs or platforms are one way to accelerate your progress. Alternatively, finding “CPG-focused accelerators”, or companies who offer mentorship among other resources play a large part in the explosion of the packaged food startup explosion.

3. Using Your Brand Presence

Instead of using traditional methods of advertising on the radio and television, or selling in retail stores, startups use other platforms to sell their products. Platforms like Amazon, or any sort of delivery service are all viable options and open up a venue for brand interaction with its customers. Selling directly customers may not be the most optimal way to run a business, but it’s a start that can be altered once you grow large enough.

4. Localization

Localizing deals or services can help establish a connection with those in the community. Even large, multi-location businesses use this strategy to stay relevant with the locals and eventually scale up to a large business. Remember, thinking big is one thing, executing it can take longer than you’d like. It’s a business in a world where there are no absolutes; take your time and win the locals before moving on.

5. Staying Small

To keep costs low and elevating your business, keeping a tight knit group of employees is encouraged. If you’re worried about running the business short staffed, no worries. Many of the early stages in the industry usually require outsourcing, so you won’t actually need that much help.

6. Stay Relevant

Many customers these days follow trends, meaning brands are less of an issue. Fortunately for startups, this means that people just need to like your product for you to compete with already established brands. Your brand is usually a bit cheaper due to you being a startup and could contain just as rich product as the mainstream brand that is presented. In this specific scenario, it actually helps the startups and hurts the larger, more established brands.

7. Taking the High Ground

Alternatively, if your product is unique and possesses an organic, natural or pure element to it, you can sell it for higher points than your competitors. If your product is better, it deserves a higher ask than the typical mainstream brands. Advertising like this can be an advantage for both supplier and retailer, but it can also be a risky venture. If your brand isn’t marketed properly, you will find yourself without many customers.


The CPG market is on the rise, and there is profit to be made. While we have highlighted the main reasons, it would be wise to conduct more research into the matter to see what works best for your startup in the market.


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