337. More Retail Doors. Less Cash? The Hidden Cost of CPG Growth

337. A CPG brand can add distribution, grow revenue and become financially weaker at the same time.

I've watched it happen.

A profitable brand expanded into more distributor DCs and markets. Distribution increased. So did inventory, free fills, chargebacks, distributor costs and the resources required to support all those new doors.

The sales report showed growth.

The underlying business was getting weaker.

That's because getting the retailer's yes isn't the end of the investment. In many cases, it's when the investment begins.

Inventory has to be produced before shoppers buy it. Distributor economics have to work.

Trade needs a job. Retail execution has to happen. Deductions can arrive after the sale. And the brand may finance weeks or months of activity before the cash comes back.

The problem is that those costs rarely appear together on one report.

In Episode 337 of Bulletproof Your CPG Brand, I break down the Retail Door Cost Stack and show you how to pressure-test one retailer before funding the next expansion.

You'll learn how to think about:

• inventory and working capital