How to Take a Price Increase in CPG Without Getting Delisted
When ingredient costs spike, CPG founders freeze. Here's how to take a price increase that retailers accept and consumers don't abandon.
July 3, 2018. I'm at home in Mayville, New York, house full of family getting ready for the Fourth. My phone rings. It's Scott Uzell from Coca-Cola.
They weren't moving forward.
We'd been building toward that acquisition for months. Management presentations. Plant tours. Financial modeling. And just like that... it was gone. I walked downstairs after the call and wept in front of my boys.
But here's the part of that story I don't tell as often: the call was a gift.
Because it forced us to actually look at our numbers. Really look at them.
Suja was doing $100 million in revenue at the time. We had $40 million in secured debt coming due within months. We were burning more than $10 million a year. And our gross margins were sitting below 32%.
Thirty-two percent. On $100 million in revenue.
Think about what that means. On every dollar coming in the door, we were keeping 32 cents to run the entire operation. Pay the team. Fund marketing. Cover overhead. Service the debt. That's not a business. That's a trap you've built yourself into.
"Revenue without margin is ego." I say that phrase a lot. After July 3rd, I didn't just say it. I believed it at a cellular level.
The fix wasn't simple. But the diagnosis was clear. We had a margin problem... and we'd been too busy growing to deal with it.
The price you're afraid to raise is the price that's killing you.
Every founder I coach eventually faces this moment. Ingredient costs have crept up 15%. Co-man fees increased. Freight got more expensive. All three hit at once. And the gross margin that started at 40% has quietly slid to 28%, then 26%, then lower.
But raising prices feels terrifying. What if the buyer says no? What if you get delisted? What if consumers switch to a competitor?
The fear is real. I'm not dismissing it. But let me offer you a different question: what happens if you don't raise them?
At 28% gross margin, you're running a machine that generates cash for everyone in your supply chain except you. Your distributor is making 15-18%. Your retailer is taking 30-40%. Your co-man is getting paid. And you're left with a sliver that barely covers your operating costs on a good month... and leaves you underwater on a bad one.
That's not a pricing problem. That's a math problem. And you can't negotiate your way around math.
Hope is not a strategy. Not here.
Two levers. Same destination.
Here's what we learned at Suja coming out of that crisis: there are two ways to fix a margin problem. You can raise prices directly. Or you can change your product mix. Both work. Often the smartest founders do both at once.
In 2019, we replaced our kombucha line with wellness shots.
The kombucha business was technically competent... we'd actually solved the tricky alcohol consistency challenge that trips up most producers. But consumers didn't see Suja as a kombucha brand. Velocity was mediocre. And the economics were rough... roughly 12% gross margin, outsourced production, low turns.
The wellness shots were a different story. We produced them internally. They were a concentrated extension of what Suja already stood for. Gross margin was running around 60%.
Swapping kombucha for shots didn't require a single conversation with a retailer about price increases. But it moved our company-wide gross margin from 32% to 40% over 18 months. That eight-point swing changed everything. It gave us runway. It improved our fundraising position. It eventually made us attractive to the buyers who ultimately acquired us at around $300 million.
Gross margin determines destiny. I mean that literally.
So before you walk into a buyer meeting asking for a price increase, do a hard audit of your portfolio. Is there a low-margin SKU you're carrying out of fear? An outsourced product eating your economics while your internally produced hero SKU subsidizes it? Sometimes the margin fix doesn't start with a price conversation. It starts with a portfolio conversation.
But often, you still need to take price. So let's talk about how.
The framework for taking price without losing the shelf.
First: know your target. The benchmarks that matter are 40% gross margin by year two, 50% by year three or four. If you're below those thresholds, pricing is almost certainly part of the solution. If your COGS have increased 15% in 18 months and your retail price hasn't moved... you have a problem that's compounding quietly in the background every single quarter.
Second: timing matters more than most founders realize. Retailers build planograms for roughly 12 months with a 6-month refresh cycle. The best time to bring a price increase to your buyer is in advance of a category reset... ideally 90 to 120 days out. It gives them time to plan, time to update their systems, and it makes this feel like a collaborative conversation rather than a surprise you just dropped on their desk.
Third: bring data, not emotion. "Our costs went up and we need help" is not a conversation. That's a problem you're outsourcing to your buyer. Instead, walk in with a P&L bridge. Here's our current gross margin. Here's what's driving the COGS increase and why it's not temporary. Here's the price adjustment we need to make the economics work long term. Here's what we're doing on our end to offset the impact.
Buyers are smart. They see dozens of vendors asking for price relief every year. The ones who get approvals are the ones who've done the work. Who've already cut costs where possible. Who show that their velocity justifies keeping them on shelf.
Come with evidence. Leave the emotion at home.
Fourth... and this one is massively underutilized: consider a package size change instead of a straight price increase.
When we were getting ready to launch Suja at Walmart, a senior Target buyer pulled me aside and gave me advice I've leaned on ever since. Don't use identical barcodes or pack sizes across all retailers. If you do, Target will see the Walmart price and price-match it. Then your entire pricing architecture collapses.
So we launched a 10.5-ounce bottle at Walmart and a 12-ounce bottle at Target. Different barcode. Different pack size. Different shelf price. Walmart gets their EDLP value story. Target gets their premium positioning. We preserve margin across both.
You can apply the same logic to a price increase. If your 16-ounce bottle has been sitting at $4.99 for three years, moving to $5.49 can feel jarring... both to buyers and consumers. But a thoughtful reformulation to a 14-ounce bottle at $4.99 is functionally a 7% price increase... and it rarely generates buyer pushback when you frame it as a product refresh.
Use this lever wisely. Not as a gimmick, but as a tool when the direct price conversation would strain a relationship you've spent years building.
The real risk isn't asking for price. It's staying at the wrong margin.
Here's what I want founders to actually internalize.
Retail buyers are market-aware. They know ingredient costs have gone up. They know freight is expensive. They're not expecting your economics to be frozen in 2021. If your velocity is healthy and your sell-through is strong... a well-reasoned, data-supported price increase doesn't get you delisted. It gets you a negotiation. A professional one.
And if your velocity is weak? The price increase isn't your real problem. The velocity is. Fix that first. A price increase on a struggling SKU will accelerate the delist, not prevent it.
CPG is a "penny profit" business. The pennies matter. A brand running at 28% gross margin is spending all its energy just staying alive... it cannot invest in marketing, cannot fund meaningful innovation, cannot build the infrastructure it needs to reach the next stage. Every point of gross margin you recover buys you strategic freedom. And strategic freedom is what separates founders who get to choose their outcome from those who get one chosen for them.
After we did the hard work in 2019... the $4 million marketing cut, the product mix shift, the raw material cost program... revenue actually grew about 10%. That sounds counterintuitive. But getting the economics right made the business more durable, not more fragile. Strong brands with loyal consumers are more resilient than founders give them credit for.
You built something real. Now protect the economics that let it survive.
Don't confuse the fear of a hard conversation with a strategy. It isn't. It's a delay. And in CPG, delay is expensive.
Jeff Church is an 8x CPG founder, co-founder of Suja Juice, and has generated $700M+ in exits over 30 years of building consumer brands. To go deeper on the financial fundamentals that determine whether your brand wins or dies, explore the CPG Founders MBA. If you need traction fast, the 90-Day Breakthrough is built for founders who are ready to move.
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