Column: Emerging Brands, What Do You Want to Be When You Grow Up?
Fledging CPGs face a ton of early packaging decisions that will have repercussions as they scale. Being deliberate and clear eyed about early packaging choices is key. Consultant Ken McGuire, former P&G exec asks "what do you want to be when you grow up?"
Decisions Yolanda Shenkin makes now about her Heliconia brand's packaging, sales channels, and more will have profound impacts on how far the business can go. So she's being very deliberate as she begins to scale.
As I have recently left my 28-year career at Procter & Gamble and ventured into the consulting world, I have seen a common theme among many of the small companies with whom I have had the privilege of working. Along with endless enthusiasm and optimism about prospects of changing the world with a new product, the questions a business future–and what that future should be–don’t tend to be front and center. There is a tremendous amount of work that goes into creating a new product or brand, ranging from formulation to contract manufacturing, package sourcing, artwork, social media campaigns, hiring, bookkeeping, accounting and general business management, and finally to production and shipping. Many times, lost in this flurry of exhausting but exciting work is an answer to the question, “What do I want to be when I grow up?”
Ken McGuire, consultant, former P&G exec and Packaging World contributorThe right time to ask this question is at the very beginning. Typically, when I ask this question of a startup, the answer is “to make a lot of money.” Yes, nobody starts a business without that hope, but how you make that money can change a lot of the very early work that you do as you begin this journey. Do you want to grow the business to support your family and pass it along to your children? Do you want to grow your business through grassroots to eventually employ hundreds of people with you staying on as the CEO? Do you want to build your business to the point of having a large, multinational company like Nestlé or Estée Lauder acquire it, so that you can continue your path as serial entrepreneur? Rarely do the skills required to create and build the beginnings of a new business translate to large scale manufacturing and all of the logistical challenges that come with it.
What you decide now affects tomorrow
Obviously, the answers to the questions above will change the strategies you employ in the very earliest days. Let’s take for example a brand that I am currently working with. Heliconia is a new skin care product developed by entrepreneur Yolanda Shenkin. She lived in Panama, and she recognized that current skin care products left her skin feeling greasy because of the hot, humid climate. In response, she developed a new product to leave her skin feeling moisturized but not greasy. Her early packaging choice is stock packaging with very simple, elegant graphics which highlights the elegance of the brand. She did not try to design a cost-optimized version up front, nor should she have. Our early discussions revolved around how to launch the brand, especially given her desired outcome. While she wasn’t completely sure where she wanted to be in five years, she did want to be open to any future opportunities. To be prepared, she decided to answer some key questions:
How large is the market?
How much will people pay for this product?
How much does it cost to manufacture and package at scale?
What kind of intellectual property can you own?
To answer these questions at the very outset of her product launch journey, Shenkin is now focused on obtaining some key data. She is using e-commerce as her sales and distribution method to reach her consumers quickly. She is following up with the consumers who buy her products to ask why they purchased them, and importantly what they liked and didn’t like. In business lingo, she is identifying her product's “who.” She is working with formulators and packaging companies to put her key financials together to build a case for a robust business model and appropriate margins at her current scale (hundreds or thousands of units per month) to true, multinational scale (millions per month). Through all of this work, she is creating her complete product story. She will be able to articulate precisely who loves her brand, and why they think it is superior to other products currently on the market. She is developing a clear reason, with relevant data, for someone to take her brand and amplify it through the use of large-scale distribution. This is not Shenkin's skill, nor should we expect it to be.
What could have been?
Separately, I recently worked with a meat packing company based in the San Francisco Bay Area. This was a family business that had really exploded from a single packing plant with a few employees to several plants with hundreds of employees in just over 15 years. The business had grown into a massive time investment from the two owners, a husband and wife team, and it was taking away from their time with their kids as they grew up. For this reason, they wanted to sell the business. Here was an example of a company that grew beyond the capabilities of the people who started it very quickly--a great financial problem to have. I couldn’t help but wonder how their growth might have been different if they had tackled some of these questions earlier in their company growth. Should they have hired an operation manager to relieve themselves of this duty? A larger sales force? Packaging engineers to manage interfaces with key suppliers? All of these decisions add cost, and so should be considered carefully at each stage of company growth.
Packaging design and production for a new product are also a key to the products success in the market. According to a 2024 PMMI Business Intelligence report, “Contract Packaging & Manufacturing: Drivers of Machinery Investments,” a report surveying brand owners across the food, beverage, beauty, home care, and health care sectors, 14% of respondents use contract packaging for 90% of their businesses. This may be entirely appropriate early in the business building process. What the brand owners should always be asking themselves is 'at what time, if ever, should this change to manufacturing/packaging internally?' Obviously, the answer to this question is driven largely by the answer to the first question we posed in the beginning of this column: “What do you want to be when you grow up?” PW
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Ken McGuire, consultant, former P&G exec and Packaging World contributor
