Investing Talk #11: Consumer Products Business
Investing in the consumer products business can be a smart, diversified way to gain exposure to steady demand, brand loyalty, and recurring revenue. Whether you're thinking of starting your own brand, investing in existing companies, or buying into private businesses, here's how to do it strategically:
You can also use ETFs like:
What Is a Consumer Products Business?
These businesses create and sell physical goods used by everyday consumers — either fast-moving or durable.Types of Consumer Products:
| Category | Examples |
|---|---|
| FMCG (Fast-Moving Consumer Goods) | Snacks, drinks, hygiene products |
| Durables | Furniture, electronics, appliances |
| Apparel & Footwear | Clothing, shoes, accessories |
| Personal Care & Beauty | Skincare, cosmetics, grooming |
| Household Products | Cleaning, kitchenware, decor |
| Packaged Foods | Canned goods, frozen meals |
1. Ways to Invest in Consumer Products
Option 1: Public Stocks
Invest in large consumer product companies listed on stock exchanges:| Company | Segment | Ticker Symbol |
|---|---|---|
| Procter & Gamble | Hygiene & household | PG (NYSE) |
| Unilever | Beauty, foods | UL (NYSE) |
| Nestlé | Packaged foods | NSRGY (OTC) |
| Coca-Cola | Beverages | KO (NYSE) |
| LVMH | Luxury goods | LVMUY (OTC) |
| Nike | Footwear & apparel | NKE (NYSE) |
| Shopify | Consumer e-commerce tools | SHOP (TSX/NYSE) |
- XLP (Consumer Staples ETF)
- VDC (Vanguard Consumer Staples ETF)
- RHS (Invesco Equal Weight Consumer Staples)
Option 2: Private Investments or Acquisitions
- Buy a small consumer product business (via BizBuySell, Empire Flippers, etc.)
- Invest in a direct-to-consumer (DTC) startup
- Join angel investor syndicates focused on CPG (Consumer Packaged Goods)
- Use equity crowdfunding platforms like:
- StartEngine
- WeFunder
- Republic
Option 3: Start or Partner in a Brand
- Launch your own brand in a niche market (e.g. eco-friendly home cleaners, men's skincare)
- Use private label or white-label products
- Sell via:
- Shopify
- Amazon FBA
- Retail partnerships
2. What to Look for in a Consumer Product Business
| Key Metric | Why It Matters |
|---|---|
| Brand loyalty | Strong brands command pricing power |
| Gross margins | Important due to cost of goods (COGS) |
| Distribution | Retail, DTC, wholesale? |
| Customer acquisition cost (CAC) | Especially for DTC businesses |
| Repeat purchase rate | Indicates brand strength |
| Supply chain stability | Delays and costs can kill profits |
Risks to Be Aware Of
| Risk | How to Reduce It |
|---|---|
| Supply chain disruptions | Diversify sourcing, keep inventory buffers |
| Low brand differentiation | Focus on niche, story, or innovation |
| High CAC (for DTC brands) | Focus on organic channels or partnerships |
| Changing consumer behavior | Stay lean, iterate with data |
| Inflation/shrinkflation issues | Choose recession-resilient products |