The CPG Path to Profitability: What Losing $10M Taught Me About Building a Real Business

The phone rang on July 3rd, 2018.

Scott Uzell from Coca-Cola. My house was full of family — Fourth of July weekend, everyone in town, the whole thing. I stepped away to take the call.

He told me Coke would not be moving forward with acquiring the remaining portion of Suja.

I walked downstairs and wept in front of my boys.

Six weeks before that call, Coke's management and HR teams had visited San Diego to discuss integration. We thought we were days from finalizing a full acquisition. Instead... a polite "no."

The next morning I woke up in Mayville, New York. Fireworks outside. Blue skies, 82 degrees, an annual parade rolling down the street. And I felt physically sick.

We had $40 million in secured debt coming due in October. We were burning more than $10 million a year. At certain points that summer, Suja was operating with less than $100,000 in the bank on a $100 million revenue company.

I don't say any of this for sympathy. I say it because what came next was the most important business education I ever got... and it's something I see founders miss every single day.

Revenue Without Margin Is Ego

I had believed for years that growth was the strategy. Grow fast enough, and the numbers sort themselves out. Build the brand, win the shelf, drive velocity, expand distribution... and somewhere downstream, profitability follows.

It doesn't. Not automatically. Not without intention.

What Coca-Cola's decision forced us to do was something most founders never have to do at all: confront the actual economics of the business. Not the narrative. Not the projections. Not the pitch deck version. The real numbers.

We were losing $10 million a year on $100 million in revenue. Gross margins below 32%. Products on shelf generating 12% margin because we'd outsourced production to chase a category trend. Marketing spend that wasn't moving velocity. Overhead built for a company that was about to get absorbed into one of the largest beverage companies in the world.

None of that was going to work anymore.

And here's the thing nobody tells you about that moment: it was clarifying. When you have no choice but to get honest, you get honest fast.

Profitability Is a Decision, Not a Destination

Here's what I've learned across 8 companies and $700M+ in exits: profitability isn't something that happens to you. It's a decision you make.

Most founders treat profitability like a destination — someday, when we're at scale, when distribution fills out, when the brand has enough awareness... we'll turn the corner. That's the plan.

Hope is not a strategy.

Profitability is a decision about product mix, cost structure, and what you're willing to cut. And the uncomfortable truth is most companies could force EBITDA profitability right now if they were willing to make hard choices.

We went from -$10 million EBITDA in 2018 to +$3 million in 2019. Not because a new retail account saved us. Not because marketing suddenly clicked. Because we made deliberate, painful, disciplined decisions. Here's what we actually did.

The 5 Moves That Changed Everything

1. Kill the low-margin products. No sentimentality.

At Suja, we had kombucha on shelf. Technically strong product — we'd actually solved the alcohol consistency challenge that plagued most kombucha producers. But consumers didn't see Suja as a kombucha brand. And we were producing it through an outside co-manufacturer at roughly 12% gross margin.

Twelve percent.

We were spending capital, shelf space, sales team attention, and operational bandwidth on a product that was actively undermining the economics of the whole company.

We killed it.

Meanwhile, our wellness shots — produced internally — were running roughly 60% gross margins. At Costco, shots were selling around $2,000 per week per club. That single product mix swap — kombucha out, shots in — moved our company-wide gross margin from roughly 32% to 40%.

Gross margin determines destiny. That shift bought us the strategic oxygen we needed.

2. Cut marketing. Seriously.

We cut marketing by more than $4 million. That's not a trim — that's a surgery.

And revenue grew by about 10% in 2019.

Here's why: strong brands with loyal customers don't always need massive spend to maintain momentum. We had been spending on marketing that wasn't generating incremental velocity. Paying to acquire customers who were already ours.

You can market your way into trial. You cannot market your way into loyalty. We had loyalty. We needed to stop burning money on awareness that wasn't converting.

When you have to cut, you find out what was actually working. Most of it wasn't as much as you thought.

3. Attack COGS with urgency.

We launched a $4 million raw material cost reduction program. Not a casual initiative — a war room. Weekly reviews, supplier renegotiations, ingredient substitutions that didn't impact quality, process improvements on the production floor.

CPG is a "Penny Profit" business, and the pennies matter. At $100 million in revenue, a 4% COGS improvement is $4 million to the bottom line. Not glamorous. Completely real.

Most founders spend their energy on the revenue line because that's the exciting number. The COGS line is where the margin actually gets made or lost. Study it. Own it. Know it cold.

4. Reduce operating expenses systematically.

We cut operating expenses by more than $3 million. Line by line. Everything non-essential got scrutinized.

What this taught me: when you're forced to defend every dollar, you discover what actually drives performance. Most companies have overhead that got built for a prior version of the company — a version that was scaling toward an acquisition, or running on the assumption that a big round was coming, or operating with a headcount that made sense when the plan was different.

When the plan changes, the cost structure has to change with it. Simple in theory. Brutally hard to execute.

5. Switch to bottom-up forecasting and weekly cash discipline.

My CFO Todd Fisher and I lived inside weekly cash projections for the better part of a year. Not monthly. Weekly.

We also moved to pure bottom-up budgeting. No more aspirational top-down forecasting. Revenue projected forward from actual velocity by SKU, by account, by distribution point — built from what stores were actually doing, not what we hoped they'd do someday.

Bottom-up forecasting is humbling. It closes the gap between the story you're telling and the math under the hood. Every founder should be working from a bottom-up model. Most aren't.

The Part Nobody Talks About

Looking back... Coca-Cola's rejection was the best thing that happened to Suja.

We had built a company running at full speed, growing fast, telling a great story — and structurally losing money. If Coke had integrated us in 2018, we would have handed them a business that hadn't confronted its own economics. That would have ended badly too, just differently.

Being forced to fix the foundation — to turn down the volume on growth and turn up the discipline on margins — made Suja into a real company. By 2020, Suja sold to Paine Schwartz for approximately $300 million. Revenue today is estimated around $300M+ with roughly 20% EBITDA margins.

"I have never successfully sold or financed a company from a position of weakness." I wrote that in my book after that season. I meant every word. The discipline we built during that year — the actual financial rigor — is what made the eventual exit possible.

You can't cut your way to greatness. But you absolutely cannot grow your way out of a broken economic model. The companies that exit well are the ones that figure out how to do both.

Dream boldly. Plan soberly.

Three Questions to Sit With

Before you move on — three questions worth actually sitting with:

What is your blended gross margin across your full SKU portfolio? Not your best SKU. Blended. And what would it look like if you killed your two lowest-margin products tomorrow?

If you had to cut 30% of your marketing budget starting next month, what would you protect? Your answer tells you what's actually driving results. Everything else is probably ego spend.

What does your P&L look like if revenue stays flat for 12 months? Could you survive? Could you force profitability? If the answer isn't yes... you should know that now, not later.

These aren't comfortable questions. They're the right ones.

The path to profitability isn't mysterious. It's specific, it's disciplined, and it starts with the courage to look at your economics honestly — not the story you want them to tell, but what they actually say right now.

Want to go deeper on the financial frameworks that separate fundable, exitable CPG brands from the ones that plateau? The CPG Founders MBA covers gross margin strategy, EBITDA improvement, and the full financial playbook across 8 weeks. And if you're 90 days out from a specific milestone — a raise, a retail launch, a profitability target — the 90-Day Breakthrough program is built for exactly that moment.