Coffee N° 5 with Lara Schmoisman

Episode: How Daniel Scharff Built the World’s Largest CPG Brand Community (And Why It’s Just the Start)

Release Date: July 29, 2025

Introduction to CPG

In the latest episode of Coffee N° 5, host Lara Schmoisman delves into the intricacies of the Consumer Packaged Goods (CPG) industry with expert guest Daniel Scharff. The conversation begins with Lara’s quest to understand the true meaning of CPG, setting the stage for an in-depth exploration of the industry’s landscape.

Lara Schmoizman [00:00]:

"I need to find out what CPG is. So today I brought you an expert and let's talk CPG. So welcome Daniel."

Daniel Scharff [01:03]:

"CPG for sure is consumer packaged goods. So it's the name of this industry that me and most of my friends work in."

CPG encompasses a wide range of products beyond just food and beverages, including beauty products, health supplements, pet products, and emerging categories like CBD. Daniel emphasizes the high-velocity nature of CPG items—products that consumers repeatedly purchase, such as soaps and snacks.

Diverse Categories within CPG

The discussion highlights the diversity within the CPG sector, distinguishing between various product categories and their unique challenges.

Lara Schmoizman [02:32]:

"I really thought that CPG was just food and beverage. And then I started understanding that CPG covers a lot more than that."

Daniel elaborates on how different categories like beauty products and food/beverage have distinct market identities and operational strategies. For instance, beauty products often have higher profit margins and are better suited for e-commerce, whereas food and beverages rely heavily on retail grocery distribution and face challenges related to perishability and logistics.

Challenges in CPG Distribution

A significant portion of the conversation focuses on the complexities of getting CPG products into retail stores. Daniel shares his insights into the distribution process, including the financial and logistical hurdles brands must navigate.

Daniel Scharff [05:15]:

"It's a big expensive channel and it has all of the reward if you can, you know, scale in it."

He explains the role of distributors in the supply chain and the various fees involved, such as slotting fees and distributor markups. For example, a product priced at $4 retail might only bring $2-2.60 back to the brand after retailer and distributor cuts. Additionally, getting shelf space in major retailers like Whole Foods or Kroger requires significant time and investment, often taking up to a year for approval.

Lara Schmoizman [16:21]:

"Those fees, what are those deals, what are the advertising commitments that you have with stores?"

Daniel Scharff [16:27]:

"Slotting fees, which is typically if you get into a big account, there are costs that they actually have. Like they need to go change all the price tags and, you know, they're taking a chance on a new brand."

This segment underscores the financial commitment required to enter and sustain a presence in the retail market, highlighting the importance of a robust strategy and product performance.

Building the Startup CPG Community

Daniel Scharff introduces his brainchild, Startup CPG, the largest community for CPG founders. This platform aims to democratize access to knowledge and connections, removing the financial barriers typically associated with industry expertise.

Daniel Scharff [09:17]:

"Startup CPG is the biggest community in the world for the founders of all of those kind of products."

He discusses the community’s features, such as a Slack channel with 30,000 members and numerous events connecting brands with retailers. These initiatives facilitate direct interactions, like the recent event in Chicago where brands met with a Whole Foods buyer, significantly aiding their path to retail shelf placement.

Daniel Scharff [11:00]:

"We do 100 events a year and a lot of them are focused on just getting those brands connected to the retailers."

The community not only provides a support network but also offers practical tools and resources, helping founders navigate the often daunting CPG landscape without incurring prohibitive costs.

Strategies for Retail Success

Lara and Daniel explore tactical approaches for CPG brands to thrive in retail environments. This includes leveraging in-store demos and understanding sales metrics.

Lara Schmoizman [20:44]:

"When you go into a store, it's something that I see a lot of people doing demos."

Daniel Scharff [20:52]:

"Demos for sure."

Daniel explains the cost-benefit analysis of in-store demos, acknowledging that while they incur upfront costs (e.g., $200 for a demo), they are crucial for brand visibility and consumer engagement. He uses the example of Hellman's Mayo, illustrating how high-volume sales from established brands set a challenging benchmark for newcomers.

Daniel Scharff [22:04]:

"It might be okay... one a week, you might actually get to stay on shelf."

He reassures emerging brands that incremental sales growth can demonstrate their potential to retailers, fostering long-term shelf presence even if initial sales are modest.

Community and Expert Guidance

The episode underscores the vital role of community and expert advice in overcoming CPG challenges. Daniel advocates for utilizing platforms like Startup CPG to gain insights and connections, while Lara emphasizes the importance of founders focusing on their core competencies rather than getting bogged down by tasks outside their expertise.

Daniel Scharff [23:52]:

"You can join Startup CPG via our website. Our resources are free for brands."

Lara Schmoizman [24:28]:

"If you're a founder, concentrate on being a founder. Don’t spend your time doing an Instagram post because it's going to take you four times more..."

They both agree that leveraging community resources allows founders to prioritize strategic growth activities, ultimately leading to more sustainable business development.

Key Takeaways and No-Nos in CPG

Towards the end of the episode, Daniel shares critical advice for CPG brands, highlighting common pitfalls to avoid.

Daniel Scharff [23:46]:

"You need to have your packaging checked, make sure you're not making any ridiculous claims or not falling into any, you know, like ambulance chaser traps."

Lara Schmoizman [24:13]:

"Packaging needs to be amazing, but less is more."

He emphasizes the importance of accurate packaging, strategic planning, and financial honesty. Daniel also stresses the importance of community support and avoiding overcomplicating the brand’s strategy.

Conclusion

The episode wraps up with Lara encouraging listeners to engage with Startup CPG and build their own supportive networks. Both hosts reiterate the significance of community, strategic focus, and leveraging expert insights to navigate the competitive CPG landscape successfully.

Lara Schmoizman [25:15]:

"Community is so important... learn from direct experiences."

Daniel Scharff [25:34]:

"Everybody out there has tried to do this already. There's no sense in you trying to figure out like how do I launch a brand."

Listeners are left with actionable insights and resources to propel their CPG ventures forward, embodying the podcast’s mission to transform business ambitions into reality—one episode at a time.

For more information and to join the Startup CPG community, visit larashmoisman.com or check the episode notes below. Don’t forget to subscribe for more actionable strategies and inspiring success stories!