The Rise Of Female Entrepreneurship In CPG Driving Largely Male-Dominated Investment Circle To Onboard More Women – Forbes

Cassie Nielsen, who recently ascended to the talent partner role at the natural and specialty products-focused private equity firm VMG Partners, is all too familiar with what is like to be one of the few women in the investment circle — a stagnant phenomenon she believes that still prevents an increasing number of female entrepreneurs in the CPG space from receiving necessary support.

“Unfortunately, a lot of entrepreneurs often find themselves the only women in the room when they’re painting the vision for their businesses,” Nielsen told me recently, adding there are even products created by male founders that did not cater to women’s needs.

“I’ve personally sat in a pitch meeting where founders of a deodorant brand didn’t realize their products didn’t fit women’s armpits,” she said. “That might be a weird example, but it really shows if there aren’t enough voices from women, your products are missing a critical consumer area.”

Indeed, while female entrepreneurship has been rising steadily over the years both in the U.S. and globally, the percentage of them who successfully gained VC support remains at the low single digits.

That stands at odds with the fact that the majority of consumer purchases are made by women, according to consumer think tank Yankelovich Monitor. In the food sector particularly, women account for 93% of all purchases. 

“The challenge is women entrepreneurs are oftentimes sitting on the other side of the table of a group of male investors … [who] might not be the consumer,” Nielsen noted.

PitchBook data showed VC investment in all-female founding teams reached $3.3 billion in 2019, representing only 2.8% of total capital invested across the U.S. startup space.

Harvard Business Review also highlighted how women founders are more likely to be susceptible to bias than men during the early stages of fundraising, namely deal sourcing, which is largely dependent on personal networks, and pitching.

Gender equality at the board level

The struggling reality for female entrepreneurship has prompted a number of CPG-focused investment companies that are either led by women or help exclusively female founders secure financial support, such as AccelFoods and Harbinger Ventures, to come on the scene in recent years.

Many private equity firms are also taking a proactive approach to better achieve gender equality at their senior level. 

In February, VMG Partners formed nonprofit Women on Boards Project (WOB), where Nielsen currently serves as a board member and executive director, alongside L Catterton, Swander Pace Capital, Alliance Consumer Growth, TSG Consumer Partners, Encore Consumer Capital, and CircleUp.

The organization aims to support a new cohort of 20 companies every six months by helping them identify strong, diverse candidates for their boards.

Nielsen noted how her role at WOB further complements her work at VMG, and will help bring more “board opportunities” that are not traditionally available to women. 

“My role at VMG has grown over the past four and half years, but I would say this promotion is less of a change in responsibilities and more of a continuation of expanding what talent at VMG means,” she told me. 

“In the early days, we focused heavily on building the strongest teams for our portfolio companies. That’s very much still the core of what we do.”

Leading the natural products space

Meanwhile, more women entrepreneurs are reinventing the CPG sector in other parts of the world where natural products and healthy eating have an established foothold in people’s diet.

Co-founder and CEO of Finnish plant protein company Gold&Green Foods, Maija Itkonen, notes how women are increasingly taking a larger stake in the leadership of “more progressive and purpose-driven” natural brands.

“As a female entrepreneur, I have experienced first-hand the challenges that come with trying to launch a natural food brand,” she wrote me via email. “Luckily, we are starting to see changes … Finland [is] where female rights have long been supported and enforced. Nordic countries are the forerunners for equality.”

For Itkonen, entrepreneurship has always been at the heart of her career as she previously launched a software company Powerkiss that integrates charging technology to furniture. It was later acquired by local wireless power solutions firm Powermat Technologies in 2013.

She told me how her technological background has given her an edge on launching Pulled Oats under Gold&Green Foods, and how the brand has successfully entered the U.S. foodservice industry.

“I partnered with an oat scientist and legume scientist, and together we developed a mechanically process that combines Nordic oats with fava beans and yellow peas,” Itkonen said. 

“It took a lot of trial and error … [but] the result is a protein-rich, plant-based crumble with a meaty ‘pulled’ texture.” 

She added: “We have been pleased to see how much traction the plant-based meat alternatives have gained, but unfortunately, most of the fake meat products are very processed and unhealthy.”

Pulled Oats are also expected to launch in U.S. retail as soon as the Gold&Green Foods team figures out their go-to-market strategy.

Going beyond gender diversity

CPG investment companies are also seeking ways to diversify the racial backgrounds of their executive teams to better mirror the changing consumer demographics.

Nielsen noted how natural products on the market have been largely serving relatively affluent coastal consumers who are also mostly white, and how there is an increasing trend towards underserved populations and regional flavors.

She said: “There’s a spotlight on the the fact that investing teams need to be more diverse, but I think there’s far more work to do than the progress that’s been made.

“The purchasing power of the black and latino communities has far outpaced those of the white community,” Nielsen added, and there are also more direct-to-consumer ethnic foods coming to the market to serve the Asian consumer.

Whether it’s through VMG Partners or WOB, Nielsen said the consumer space overall is definitely trying to create more opportunities for women and people of color.

“It may be hard to measure what the ROI is from these efforts [the VMG has taken],” she said, “but what makes me so proud that we do them is not about the ROI, is about doing what’s right for the industry and our portfolio companies.”

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