Expo West 2025 Recap
The real trend at Expo? Survival.
After a lifetime at Expo West – first as a macro baby (see pic with the Kushis… IYKYK), then a founder, and now an advisor – I’ve seen trends rise and fall, brands come and go, and the path to success evolve. But this year’s biggest trend wasn’t a product, it was the shifting capital landscape for founders and investors. There were so many conversations that revolved around moving goalposts, predatory debt options, and a clear need for resources to keep the dream alive, but with few answers in sight.
Before getting into Expo, I feel the context of the industry’s current challenges and the long trickle-down effect from them is worth noting and will help set the stage for the conversation many founders need to be brought in on:
💸 Big strategics slowed down M&A → fewer exits at the <$50M range since 2021
📈 Interest rates climbed → making capital more expensive
⚖️ VCs now need bigger deals that will exit faster to return their funds → investing in brands under $5M in revenue is increasingly rare, as investors need to ensure liquidation can take place during a 7-10 year fund. This is a much bigger point, which I speak to in a separate blog post.
🚧 Founders struggling to fundraise → leading to more businesses stagnating or shutting down
🏭 Co-mans losing startup clients → forcing some to close, which shrinks manufacturing availability, increases tolling costs, and compounds cashflow issues as ingredient costs continue to rise at an unsustainable pace
All these macro factors considered, here are my takeaways from my conversations with founders and investors this Expo:
Raising Capital Feels Harder Than Ever
Many of the founders I spoke with didn’t fully understand why raising capital from institutional investors, once possible at $1M in revenue, now often requires $5M or more. Many brands are realizing they need to build toward profitability much earlier, or think more creatively about alternative sources of capital in this new environment. Founders need to have a deeper understanding of what motivates their sources of capital – this isn’t exclusive to investors, but includes anyone from banks to their own customers. The companies I advise are finding success through friendly debt financing, refining their positioning and pricing (your best investor is solid gross margins!), and structuring creative terms for early-stage angel investors.
Today’s Innovation is Tomorrow’s Oversaturation
Every industry, CPG or otherwise, goes through cycles where a single trend dominates, flooding the space with competition. 2015 was Whole30, 2017 was CBD, 2018-20 was Keto, and in the years since COVID, it’s been a slurry of immunity, protein, and prebiotics. It’s easy to mislabel this oversaturation as the “death of innovation”, especially at a trade show, where everyone is peddling their wares hoping to be the next RxBar or Olipop. There was once a time when organic peanut butter was a novel concept, but eventually, other people, investors, etc. catch wind and we find ourselves in a gluten-free cronut gold rush. Getting caught up in a sea of copycat products is ignoring the innovative products on the rise today (i.e. beef tallow fries from Jesse & Ben’s or chips from Masa). David Cohen of Original Sunshine has called next year's trend: Beef Tallow with a hope that more brands hop on the glyphosate free bandwagon.
As these trends form and brands find themselves caught in an increasingly competitive category, the difference-maker is often smart product extensions and innovation or – just being the tastiest one. I’ve seen firsthand how a strategic launch, like Robert Petrarca and Maxine’s Heavenly’s new oatmeal creme sandwiches (if you haven’t tried these yet, run to Whole Foods and get a box), can reposition a brand, expand its audience, and drive momentum even in a crowded space.
More Brands Are Open to Consolidation
Rather than waiting years for an exit as a standalone brand—an outcome that’s becoming increasingly unlikely—more founders are thinking about ways to join forces. Whether it’s merging with a complementary brand, aligning with a strategic partner, or pursuing creative partnerships, there’s a growing realization that strength in numbers may be the best path forward.
This is something I’ve helped a number of brands with and is something you should consider if you’re a sub-scale brand in an increasingly competitive category. I’ll outline this more in-depth in another post at some point, but the high level benefits include immediate improvements in contribution margin and profitability through larger ingredient contracts, greatly reduced manufacturing costs in some instances of vertical integration, and less overhead with a slimmed down operation – along with added revenue opportunities through shared customer bases, remarketing, and upselling across brands.
Amidst the Challenges, There’s Still Plenty of Opportunity
Through my work with dozens of brands and investors, I’ve seen what works in today’s environment. And more importantly, I’ve seen that success is still very possible. Brands that deeply understand their financials, get creative with partnerships, and make necessary adjustments to ensure they find the path forward that meets their unique needs are finding the right capital, the right acquisitions, and the right outcomes to come out ahead in this new era of the CPG industry.
Whether you’re a founder trying to figure out your next capital move, an investor looking for deals that meet your criteria, or somewhere in between, I’d love to connect.
