The CPG Acquisition Playbook: What Really Happens When a Strategic Buyer Calls
From management presentations to earnouts and due diligence, here's what CPG founders need to know before a strategic buyer comes calling.
The call came on a Tuesday.
Coca-Cola wanted to have a conversation about Suja. We'd been building for about three years at that point. Revenue north of $50 million. Distribution in Whole Foods, Costco, Walmart. The brand was starting to have real gravity. But a call from Coca-Cola (the largest beverage company on the planet)? That's a different kind of Tuesday.
I told myself on the drive over: this is just a conversation. See where it goes. Don't get ahead of yourself.
Here's what I've learned after eight companies and $700 million in exits: when a strategic buyer reaches out, it is never just a conversation.
And if you're not ready for what comes next, you'll lose the deal before you even know you had one.
Most founders are unprepared
The typical CPG founder is so deep in the daily grind (velocity, trade spend, supplier contracts, the next fundraise) that when a potential acquirer finally calls, they haven't thought about this moment at all.
That's a problem. Because the acquisition process doesn't start when you sign the LOI. It starts the moment that first call ends.
Everything you say, every number you share, every question you can't answer immediately... it all goes into a mental file. Buyers have long memories and short patience. They're running a process even when it feels like a casual lunch. The company that eventually acquires you is building a thesis about who you are, whether your numbers hold up, and whether they'd actually want to work with you after closing. All at the same time.
What buyers are actually evaluating
I've sat on both sides of this table. Here's what a sophisticated buyer is really looking at:
Gross margin, first and always. If your blended gross margins aren't in the 40-50%+ range for a branded CPG business, the conversation is going to be short. "Revenue without margin is ego" isn't just a saying. It's the first filter. Buyers model their future with your business using your unit economics, not your growth rate. A brand growing 40% a year at 28% gross margins is a hard story to finance.
Velocity, not just distribution. Don't confuse distribution gains with velocity gains. Buyers will pull your spins data. They'll look at turns per week per store. A brand with 20,000 doors and $0.50/week velocity is actually a liability on a buyer's balance sheet, not an asset. The brands that get acquired at premium multiples are the ones with tight distribution and strong turns. Prove velocity first.
Customer concentration. If one retailer represents more than 25-30% of your revenue, sophisticated buyers will discount your valuation. Hard. The dependency is real risk. Suja had meaningful concentration with a few key retailers, and that came up in every due diligence conversation. The more diversified your retail base, the cleaner the story.
Gross-to-net. This is where founders get embarrassed. Your "net revenue" after trade spend, slotting, deductions, and promotional activity is what a buyer will actually model. I've seen founders walk into management presentations quoting gross sales numbers that look nothing like their net. That gap (between what you think you're selling and what you're actually netting after trade) is where trust gets destroyed.
The cap table. Clean equity history matters. A messy cap table with 40 early angel investors, unclear liquidation preferences, and a founding team member who's been bought out messily... all of that creates friction. Buyers hate friction. They want a clear path to owning what they're paying for. Get your cap table tidy before you're ever in a formal process.
The management presentations
By early 2019, after turning Suja around from a negative $10 million EBITDA situation to positive $3 million, we hosted management presentations with more than 15 potential buyers. Not five. Fifteen.
And none of them made an offer initially.
That didn't break me. It taught me something important: sometimes when you're doing the right things, you just have to keep going. We were a work in progress. The buyers who passed weren't wrong. They were early. The company needed more time to demonstrate that the discipline we'd built was real and repeatable, not just one good quarter.
A management presentation is essentially a job interview for your company. You walk buyers through your story, your numbers, your team, your market position, and your forward view. The best management presentations feel like a confident, honest conversation. Not a polished sales pitch. Buyers can smell spin from a mile away.
What they want to hear: "Here's where we were wrong, here's what we fixed, here's the proof it's working."
What destroys management presentations: founders who can't clearly answer "what is your gross margin by SKU?" or "what happened in Q3 of last year?"
The LOI, due diligence, and where deals actually die
Once a buyer is serious, they'll issue a Letter of Intent. Read it carefully. The headline number gets all the attention, but the deal structure is where the value actually lives.
Watch for these three:
Earnouts. A buyer might offer $50 million upfront with $20 million more "if you hit these targets over the next two years." Earnouts sound great until you realize you're now working for an acquirer who controls your marketing budget, your distribution decisions, and your SKU strategy. I've seen earnouts that were essentially impossible to achieve once the buyer took operational control. Negotiate earnout metrics that are within your team's control, not subject to corporate resource allocation decisions that change after closing.
Working capital adjustments. Standard in every deal, but where lots of money quietly moves. Make sure your advisors model this carefully before you sign anything. A $5 million swing on working capital is not unusual in a $50 million deal.
Reps and warranties. You'll be asked to represent things about your business that you should already know are true. If something is even slightly uncertain, disclose it now. Surprises in due diligence kill deals at the worst possible moment. No one likes a surprise at the altar.
On exclusivity: once you sign an LOI, you typically grant the buyer 45 to 90 days while they do full due diligence. Don't grant exclusivity to a buyer who isn't serious. Exclusivity takes you off the market. That leverage is real. Use it.
The moment that nearly killed our biggest deal
During the final stages of the Coca-Cola investment in 2015, I identified a potential quality issue with a product. I pressed pause and raised it.
My advisors were nervous. The deal had taken months to get to that point. The team was exhausted. The lawyers were billing. And I was about to surface a problem that could unravel everything.
But there is no wrong time to do the right thing. That moment (choosing transparency over expediency) actually earned deep respect from Coca-Cola's senior leadership. They invested.
The lesson: buyers aren't just acquiring your product. They're acquiring your judgment. Integrity in the process previews integrity in the partnership. Don't cut corners in due diligence hoping nobody notices. They will. And when they find what you buried, the deal dies. And so does your reputation.
What finally happened at Suja
In 2020, after the turnaround, after dozens of management presentations, after Coca-Cola decided not to fully acquire us down the road... Suja sold to Paine Schwartz for approximately $300 million.
Today the company generates more than $300 million in revenue with roughly 20% EBITDA margins.
The Coca-Cola situation felt devastating at the time. In hindsight, it was a gift. It forced discipline. It forced rigor. It forced maturity. The company that sold to Paine Schwartz in 2020 was a fundamentally different and stronger business than the one that had its first big corporate conversation years earlier.
"We didn't suddenly become smarter. We just became more disciplined."
Sometimes the deal that doesn't happen is the one that makes the next deal possible.
If you're building something worth selling, start thinking like a seller now. Clean your margins. Tighten your distribution. Build velocity you can prove. Keep your cap table orderly. Tell a consistent story. And when the buyer calls...
Be ready. Because that first call is never just a conversation.
If you're building a CPG brand with an exit in mind, the CPG MBA covers everything from gross margin strategy to exit positioning in depth. And if you're facing a specific growth challenge right now, the 90-Day Breakthrough is built to move fast.
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