Fenwick Brands Invests in Companies with a Taste for Success
Written by Jenn Barnett
Has your family ever smiled appreciatively over the dinner table and tried to convince you that your homemade barbecue sauce, marinara, or salad dressing was better than anything you could buy at the store? Have you thought about packaging your brilliant hack for hypoallergenic skincare or eco-friendly laundry detergent?
You’re not alone. About 3,500 new Consumer Packaged Goods (CPG) are launched every year, and that doesn’t include the myriad jams, sauces, and soaps you can buy at your local farmers market. Of those, 2,800 will fail within the first two years, while about 70 (2%) will knock it out of the park.
Just getting to launch requires hard work and sacrifice as you perfect your recipe, find manufacturers, and fight for shelf space as an unknown company. Expect to spend tens of thousands of dollars of your own capital and hundreds of hours doling out samples and traveling from store to store.
If you succeed that gauntlet, and if your product has found an audience, you might find yourself ready to scale production for a national rollout. CPG venture capital firms exist to get your product to the next level, with the cash and expertise to make your product a household staple—and maybe even get it ready to sell to a larger firm.
In Birmingham, Fenwick Brands is just such a firm. Founded by financier Benny LaRussa, Jr., son of a former Bruno’s executive who went on to franchise and then buy Jack’s Family Restaurants, the company prides itself on applying operational experience to the brands they invest in.
Notably, the firm boasts a staff of primarily women, a rarity in the financial world. President & CEO Melissa Baker and director of investments Elizabeth Stewart say this gives Fenwick Brands a clear advantage: “Our strong contingent of female employees gives us a hyper-relevant vantage point in CPG. Women drive over 70 percent of purchasing decisions, and in CPG this is very powerful.”
Baker and Stewart are two of the employees who get in the trenches with founders and their management teams. If you’re ready to bottle that barbecue sauce, they have some advice for you. “A brand must be authentic and have a defensible market position. We like to see businesses that have focused and done a few things very well. You don’t need to be everything to everyone.”
- What’s your elevator pitch?
We are a Consumer Packaged Goods equity investor and operator that provides expertise equity through growth capital and deep category experience to create brand value. Our team has extensive marketing, operating and management experience in the Consumer Packaged Goods industry. We invest active capital in brands at an inflection point that, beyond capital, need a combination of strategic and operational expertise to deliver maximum shareholder value. We look specifically at CPG companies with the ability to scale that have up to $25M of annual revenue. We target companies in categories where we can add strategic value and can take an active role alongside management teams.
- What’s your value proposition?
In addition to optimal capital, we commit strategic leadership to our portfolio companies. From branding, marketing, and merchandising; to operations, sales and distribution strategies, we shepherd entrepreneurial businesses to exit. Our flexible mandate allows us to take an opportunistic approach to investment structure, facilitating a Fenwick fit and an ideal solution for our companies. We are focused on finding the most compelling brands that align with our hands-on style. We understand the pain points of founders operating with limited resources, and leverage our experience to help brands scale faster.
- Tell me about your founders and their experience.
Fenwick’s differentiated approach was born out of our Chairman Benny LaRussa’s appetite for opportunistic investing, his passion for the consumer space, and the idea that operational support for emerging businesses was the key to helping many brands achieve scale. Melissa (launched) Fenwick Brands with Benny and was instrumental in channeling the firm’s prior experience and collective skill sets to deliver “expertise equity” in the consumer market place. Beyond Benny and Melissa, Fenwick has built an robust and effective team with deep experience to support the strategy.
- How did you get the idea to launch Fenwick Brands?
We saw a consistent market inefficiency within emerging consumer businesses. Brands often need not only capital but strategic/operating expertise as well. The Fenwick team is ideally suited to provide not only capital but strategic support for brands. We have coined the Fenwick solution to this inefficiency “expertise equity” which remains the investment thesis for our firm today.
- Why now? Why Birmingham?
We have deep roots here, and we always say to start in your own backyard. Fenwick and its principals have strong relationships with Birmingham-based companies, investors, and entrepreneurs. While we look nationwide for potential investments, we are excited about the Birmingham and Southeastern ecosystem.
- What are your competitive advantages?
Our team has deep CPG experience which we leverage to support the resource pain point of our brands. Whether it is branding, innovation, or supply chain management, Fenwick can help a founder or management team bridge gaps and create value.
- Where do you want the company to be in five years?
We aim to make one to two investments each year over the next five years. As we add value and scale those businesses, we will evaluate potential exit opportunities and execute those that are best for the brand.
- Who would you most like to connect with right now?
First and foremost, we’re looking for brands where Fenwick’s operating expertise can play a critical role in scaling the business. We often say we can get creative with terms and structure, but more importantly we need the alignment with the founder/management team on the strategic view of the brand opportunity and path forward. Investments are partnerships and while there is not a typical Fenwick deal, we focus on the inflection point and look to put $3 to 7 million of capital into the business. We take a flexible viewpoint provided the alignment exists.