After years of caution, Brian Sugar, co-founder of Sugar Capital, believes the $1.2 billion exit of portfolio company Grüns should lay to rest any lingering concerns that consumer brand investing is a bad bet and boost investor appetite for risk in the consumer packaged goods sector.
He asserts that better business models, improved distribution and a sweeping cultural shift toward wellness are creating CPG “bangers” like gummy vitamin brand Grüns. “In the investing space for the last five, six, seven years, everybody’s been super down on consumer, and there are valid reasons why,” says Sugar. “But I think the founders have learned, and there’s an overall change going on in what consumers want.”
Grüns’ sale to global conglomerate Unilever, the fairy-tale acquirer for a mass-market vitamin and supplement brand, less than three years after its launch at a unicorn price, rivals the rapid rise of Rhode, which sold to E.l.f. Beauty for $1 billion three years post-launch, and holds valuable lessons for emerging CPG brands trying to follow its path. To unpack them, Beauty Independent caught up with Sugar to discuss Grüns’s rapid execution, Sugar Capital’s approach to CPG investing and the wellness categories he’s excited about now.
What Grüns Got Right
Sugar Capital met Grüns founder and CEO Chad Janis in September 2023, a month after the brand launched. Lisa Sugar, Brian’s wife and partner at the firm, swiftly declared the gummy vitamin product to be the “mass-market product we’ve been waiting for,” not a designation she had applied to pricier brands in the category like AG1. Sugar Capital invested immediately and followed on twice, increasing its ownership from 10% to 13% as the brand grew.
Sugar was impressed by Janis, who has a hybrid operator-investor résumé spanning founding, venture investing and board participation at brands such as Dr. Squatch and Brooklinen, and his firm grasp of the marketing math underpinning rapid, profitable scaling. That includes understanding how to balance customer acquisition costs with lifetime value, sequence channels from direct-to-consumer to retail and build demand ahead of distribution.
Grüns reached profitability within roughly 14 months and achieved a $300 million annualized revenue run rate by its second year. It was valued at $500 million in May 2025, when it raised its Series B round. The brand expanded into Target and Walmart in 2025 and entered Costco in 2026. Sugar notes Grüns’ retail roadmap is far from finished domestically, with international growth ahead.
In a LinkedIn post, Janis emphasized that access to capital was crucial to allowing the company to scale at speed as it maintained healthy unit economics. The brand raised $55 million prior to exiting. He wrote, “Don’t romanticize bootstrapping. Don’t treat it like a badge of honor. Raising money doesn’t mean you couldn’t do it on your own.”
After a great product, Sugar contends that a critical factor for success is a great team. He points out that equity positions for Grüns’s employees ensured the $1.2 billion exit created several employee millionaires. Sugar gravitates to founders who excel at hiring, delegating and acting as the “maestro of the orchestra” rather than micromanaging. Contrary to the common critique that startups hire too many people or too quickly, he argues that many founders are actually too slow to hire and delegate. Janis wasn’t one of them.
What Sugar Capital Is Sweet On
According to Sugar, Sugar Capital invests in CPG businesses that meet a specific set of criteria anchored in strong fundamentals. Chief among them are healthy margins, which are essential to scaling profitably. In practice, that often means gross margins of 60% or higher, giving brands enough room to absorb customer acquisition costs while still generating profit.
Beyond margins, the firm looks for products that are both consumable and habitual. “If you have a consumable business and you hook a customer, you can make the economics work,” says Sugar. It also prioritizes brands solving a real problem, generally driven by founders with a personal connection to the issue, and those tapping into broader cultural tailwinds such as the “good-for-you” movement fueling demand for GLP-1s, peptides and protein- and fiber-rich products.
Sugar is committed to being a strong partner to the brands Sugar Capital backs. He compares his role to that of an old telephone operator, connecting founders to key contacts such as decision-makers at Walmart or Target, then stepping away. He says this approach stems from a “we’re in this together” philosophy that avoids anxiety-inducing behavior like firing off emails to founders anytime a competitor does something interesting.
“The worst investor you can have around the table is the one that is concerned about how their boss at their VC firm is going to feel about negative numbers,” says Sugar. “Then, that investor rides the founder and creates an adverse working relationship.”
Emerging Category Bets
Sugar highlighted companies in the firm’s portfolio capitalizing on wellness trends it’s bullish on.
Pouches
Zyn is everywhere, but products containing highly addictive nicotine aren’t for everyone. Still, the ubiquity of oral nicotine pouches has normalized the delivery system, opening the door for drug-free alternatives. One Sugar Capital portfolio company, Ultra, is focused on better-for-you pouches containing nootropics, vitamins and minerals designed to boost energy and focus, and serve as a nicotine-free substitute for consumers looking to wean off the habit. Ultra recently launched at Whole Foods.
Peptides
United States Secretary of Health and Human Services Robert F. Kennedy Jr.’s enthusiasm for peptides is among a number of reasons the tiny amino acid chains have been thrust into the spotlight. With expectations that regulatory restrictions may ease, startups are positioning themselves to capitalize on the opportunity.
Sugar Capital has invested in a pre-launch peptide company, and Sugar believes the broader market has “crossed the chasm,” noting that roughly 25 million Americans are currently using GLP-1 medications. Beyond injections, peptides are being developed in more accessible formats such as sublingual strips, inhalants and pills.
Power Powders
Electrolyte supplements have surged in popularity, and Sugar argues Magna, a startup in the space, “has the potential to be the next generation’s Gatorade.” From Everlane founder Michael Preysman, the brand is set to launch at Target.
