More rollup companies are springing up to scoop up struggling brands.
Nameless CPG, which officially launched last December, was co-founded by Albert Swantner and Kate Harling to scoop up CPG brands with a particular focus on wellness, supplements and good-for-you foods.
The idea came about when Swantner and Harling began observing small brands struggling to expand their runways to fund further growth. Mr. Swantner is also a general partner at Texas-based venture capital firm The Fund, and Mr. Herling is a co-founder of Sway Water, a fruit-infused water company.
Nameless CPG has acquired five brands to date, three of which have been announced publicly. The company’s goal is to increase total revenue generated by its brands from $9 million to $20 million this year while streamlining operations. Swantner and Harling see a big opportunity in rolling up consumer goods brands at a time when more companies are focusing on sustainable growth. They believe roll-up companies can do it more efficiently.
Brands currently under Nameless CPG include Ladybird Provisions, which sells ready-made butter coffee, Nakey, a sexual wellness brand, and Wile Women, a brand of plant-based supplements and tinctures aimed at women over 40. It will be done. Wile Women was founded in 2021 and along with partner and actress Judy Greer, raised a $3 million seed round in 2022 led by Serena Williams’ VC firm.
“We knew the timing was right because a lot of these brands can’t really be venture-funded anymore,” Swantner said. “But that doesn’t mean those brands don’t have value.”
Swantner and Nameless Consumer Goods’ argument is that some emerging consumer brands are not currently generating enough revenue to operate as independent companies. By pooling resources and relying on a single team to operate a portfolio, a consortium of brands can grow together and take the next stage of expansion.
“FMCG companies raised unprecedented capital in 2020 and 2021,” Swantner said, which led to an immediate focus on scaling into retail rather than sustained growth. Stated. Many of these companies are currently hitting a wall. Swantner said he has noticed that many founders are exhausted as they explore potential acquisitions. “CPG can be really difficult and exhausting,” he said.
Nameless CPG seeks to approach the roll-up model by carving out a niche for a specific CPG category. The brands Nameless CPG has acquired all fall under wellness within categories such as supplements, women’s health, and wholesome foods. These categories will continue to be our focus.
“We know aggregators are not doing well,” Swatner said, referring to Amazon and Shopify aggregators. Thrasio, one of the most prominent Amazon aggregators, recently filed for Chapter 11 bankruptcy, and Shopify-focused Win Brands Group has experienced multiple layoffs over the past year. “So instead of just buying whatever is out there, we decided to focus on three areas,” he added.
Currently, Mr. Swantner and Mr. Harling are self-funding the business. “We’re not even paying cash for the brand. We’re buying stock,” Swantner said. “Sometimes we take on debt, so we negotiate all those parts.”
Nameless CPG has several brand deals in the works that are expected to close in the coming months. Swantner said his company has no specific acquisition quotas or goals. But he said he has no plans to embark on a brand-buying spree.
The rollup company said it will prioritize brands that have already entered at least a few retailers and are looking to expand into more channels. “Our goal is to get them [the brands] “If we make at least $1 million in revenue and reach the Nameless model, we will be profitable,” he said.
When a brand is acquired, the founders continue to own a portion of the company. But the amount of capital will be determined on a case-by-case basis, Swantner said. Similarly, the founder’s day-to-day role in the company after the acquisition is determined individually.
Nameless CPG has assembled a team of 10 people to help run the brand. “We take on things like marketing and his 3PL and bring them in-house to save costs,” he said. Nameless CPG also just hired a CMO to lead the brand’s marketing strategy.
Rachel Hirsch, founder and managing partner of Wellness Growth Ventures, said it remains to be seen whether operating within a rollup will be an effective outlet for long-term growth. In Hirsch’s view, rollups can help prevent brands from collapsing, but new owners must be able to effectively run multiple brands simultaneously.
“From my seat, [exiting to a roll-up] That’s not my goal,” she said. She “allegedly did not produce anything of sufficient value for a proper exit.”
But as venture capital becomes harder to come by, Hirsch understands why selling a company is attractive to founders. The inability to obtain capital to fund large-scale distribution or new product development may be an obstacle. As a result, founders could potentially be looking to sell sooner than originally expected. “There’s a realignment happening as technology money moves away from consumer brands,” Hirsch said. “We are still seeing how that plays out and how well our portfolio companies can operate multiple brands.”
Regarding Nameless CPG, Swantner said the rollup is aimed at startups that have sufficient brand equity but are too small to scale further on their own. “What we pitched to the founders was, ‘You’ve done a lot of work over the last few years, so you can let us do the work for you and come along for the ride.’ he said.
