How to Take a CPG Brand from Zero to a Nine-Figure Exit

Craig Elbert, co-founder of supplements brand Care/of and former CMO of Bonobos, shares 7 secrets to a successful sale.

Craig Elbert knows how to stand out in a crowded market. 

As CMO of Bonobos, Elbert helped shepherd the menswear brand to a $300 sale to WalMart. He founded Care/of, a personalized vitamin and supplement brand that Bayer bought at a $225 million valuation.  

That wasn’t just luck. As he shared on a recent Nerd Marketing podcast, Elbert was very intentional about how he built and grew the company for a major exit. 

In this post, he shares seven tips for growing a DTC brand quickly—and avoiding a plateau. 

1. Solve a category problem

When Elbert and his Care/of cofounder were researching industries to build a brand in, they approached it as consumers. When they looked at the vitamin and supplements market, two problems became apparent right away. 

“Supplements are confusing, and it’s hard to build a habit,” Elbert said. 

Solving these two problems became the thesis for the entire business. They created personalized, easy-to-understand supplements packets that customers loved

2. Address a large-enough market 

If you want to get to a $100 million (or more) exit, you need to choose a market that’s big enough to support sufficient sales. The Care/of founders considered this from day one.  

“Vitamins and supplements is a $40 billion domestic category,” Elbert said. “There were multiple brands I’d never even heard of that were $500 million, billion-dollar exits.”

The category he was entering wasn’t just large with many  success stories, it was fragmented. That would make it easier for Care/of to gain traction, because there was no dominant brand to compete with. 

3. Have a compelling hook 

Many DTC brands want to make a big splash with paid ads before they have their brand positioning and messaging in place. While you might get lucky, that can also be an excellent way to waste your ad budget. 

The Care/of founders didn’t run any ads after their launch; instead they focused exclusively on press and PR. 

“The thesis was, if our narrative isn't good enough, if we don't have enough differentiation to get press and PR, then it's probably not at the point that we should put advertising dollars behind it,” Elbert said.  

They didn’t start running Facebook ads until three months post-launch, when the brand had achieved some word-of-mouth success.

“Now there are organic influencers,” he said. “Now let's put money on the fire.” 

4. Diversify your customer acquisition channels   

Relying on just one acquisition channel, like Facebook ads, is high-risk. In fact, it’s only a matter of time before diminishing returns hit. Platform-specific changes, ad saturation, and other factors can blow up your acquisition strategy.

The Care/of founders were methodical about testing and turning on individual acquisition channels—direct mail, influencer marketing, Facebook ads, etc.  

“It is not turning them all on at once, but turning them on gradually,” Elbert said. “Seeing what the lift of each of them is.” 

5. Focus on acquiring the best customers

Not all customers are created equal. Elbert used the customer-centric approach he learned from Wharton Professor Peter Fader and implemented at Bonobos. (Around here, we call it the Whales and Minnows framework, and it’s the best thing you can do to grow your brand.)

“There are pools of customers that you can fish in who are good customers, and there's pools you can fish in that are bad customers,” Elbert said. 

Fishing in the pools of good customers will propel your brand faster and more reliably than trying to catch a wider array of customers and trying to change their behavior. 

Elbert first implemented this at Bonobos by looking at overall customer lifetime value, recency of last purchase, and purchase frequency. He refined the same methodology of segmenting and focusing on getting more whales at Care/of.  

“The more you can be smart about getting the customers who are going to stay with you longer, the less work you have to do constantly fishing and getting more and more customers,” he said. “So really focus on those best customers.” 

6. Listen to different perspectives 

When you’re building a business, it can be easy to pay attention to just one type of advice—especially based on your financing. 

“You're either listening to the venture capitalists who are saying you've got to grow at 5X and get to this amount for it to be even interesting,” Elbert said. “Or you’re listening to the  people who are saying you should just bootstrap a business and you have to do everything you can to control it. Or you're talking to the corporate strategics.”

It’s essential to understand the pros and cons of each perspective. If you listen solely to VCs, you may be in trouble when funding dries up. Blindly bootstrap and you might miss out on opportunities to accelerate growth.

7. Connect with acquirers 

As we alluded to earlier in this post, Care/of was acquired by Bayer in September 2020.

Elbert attributes the acquisition of Care/of by Bayer to his willingness to connect and build real relationships long before this acquisition was on the table.

“I do think being aware of potential acquirers and what matters to them and building those relationships over time is important,” he said. “In terms of Care/of specifically, they looked at the strategic capabilities Bayer had to offer that they did not have and vice versa.”  

Want to hear more insights from Elbert? Listen to this Nerd Marketing podcast episode.

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