Consumer Packaged Goods

By Belina Jeon

Marketing Specialist, Investments

Fundraising Consumer Packaged Goods

In means to bypass public markets, consumer packaged goods (CPG) companies are utilizing private placements to raise capital under a strategy of Regulation D SEC fundraising. Under Regulation D, CPG brands are allotted access to a select group of investors, thus avoiding any troubles brought by public offerings. With these accredited investors, companies execute equity financing which can proceed smoothly to venture funding. However, the form of strategy depends highly on the stages the company is at. For instance, an early stage company would benefit using crowdfunding platforms as a capital-raising tool as a loyal customer base is needed for a solid foundation to build on. With further scaling over time, investors can be targeted through exempt offerings and private equity placements in shifting the focus to secure substantial funding without the complexities of public disclosure. Each approach is advantageous in its own which caters to specific needs from building the brand to expanding operational processions.

ESG in the consumer packaging industry.

With “consumer packaging” in the name, it is almost transparent that environmental,

social, and governance (ESG) policies can be key to attracting the right investors while adhering

to guidelines/regulations and market expectation. For environmental initiatives, CPG companies

commonly transition from previous packaging solutions to more sustainable alternatives. Prime

example is Starbucks, major coffeehouse conglomerate, who switched from plastic to paper

straw in means to reduce environmental impact. Many companies in this sector of food and

beverage focus on carbon-neutral manufacturing as reducing emissions is valuable within the

current state of the world and balancing production facilities. Beyond environmental concerns,

social initiatives are crucial as we have seen many companies (and staff under companies)

working to implement fair labor practices as well as diversity in leadership. Unfair wage divide

by gender, race, and ethical working conditions have been put into the spotlight to er the years,

making strides to improve transparency in ESG reporting and holistically better the consumer

packaged goods industry.

ESG Investment Opportunities

On a large scale, Coupang as an e-commerce giant has begun to support sustainable brands and promote eco-friendly products as a major distributor in Korea. They have also made strides in green logistics and focused on carbon reductions to transition their delivery vehicles to electric models, which has optimized warehouse operations. Kellogg’s, the face of cereal in the US, has also begun to engage in regenerative agriculture practices, actively incorporating sustainable. Practices such as crop rotation and no-till farming have been used to restore the very grounds of the environment: improving water retention, reducing greenhouse gas emission, and preserving soil health, etc. In addition to this, they have partnered with The Nature Conservancy in 2015, integrating these practices into operation. On a smaller scale, brands such as Dr. Bronner’s which focuses on producing organic soaps and personal care products have incorporated solar panels to power production facilities of proper ingredient sourcing. Some may say it is easier to contribute a reputation as a leader in sustainability with the brand being a smaller, family-owned company, but the dedication to fair trade practices and organic certifications reflect the social responsibility the company takes on which align with recommended philanthropic causes for business owners to have.