Exclusive. Unprecedented. Invaluable.

You’re getting an unabridged, behind-the-scenes, and updated look at Matt Bertulli’s forthcoming book.

As the CEO of Pela Case and Lomi , Matt’s been in the consumer-product game for over 20 years. This excerpt chapter is centered on what he calls the …

 Brand Health Checklist 

It’s an eight-part framework for scoring your business and then knowing how to improve.

But first, breaking news + a quick reminder our Operators Masterclass is underway!

Alex Beller President, Postscript

Texas SMS Law Doesn’t Apply to Postscript Customers

Breaking 🚨 Postscript and Ecommerce Innovation Alliance members are now officially exempt from SB140.

I am incredibly grateful to our team and the ecommerce community for your support in this victory!

If you’re on Postscript, you can keep running your SMS program without interruption.

To learn more …

Matt Bertulli CEO, Pela Case & Lomi

Consumer Brands: Health Checklist

What makes a brand great?

Everyone has their definition of success, but mine is pretty simple. A great brand is profitable and relevant over the long term. Another word for this might be sustainable.

If you’re going to go through the pain of building a consumer brand, you should start out knowing that this is likely a ~10-year investment of your time, especially if you want to build something bigger than $50-$100M in revenue.

If you spend time on social, you’ll find lots of people bragging about how they scaled to $10-$20M in less than three years.

There’s always these examples.

They grew 20-30% per year, achieving large revenue numbers and profitability by compounding and — more importantly — through leverage.

To build a great brand, you need to know what one looks like. Lucky for you, there are proven leverage points in a consumer goods business that, when present, will be strong indicators of profitable performance.

Think of this like your consumer scorecard.

Your goal is to check as many of the boxes as possible. The more you check, the more your chances of success improve.

If you work for a consumer brand, you should be taking this to your leadership team and scoring yourselves. Knowing how you stack up provides clarity on where to focus your efforts.

When you are done reading, consider this your homework:

 Brand Health Checklist 

1. High Gross Margin
2. Low OpEx: <15%
3. Cash Conversion Cycle
4. First-Order Profitability
5. High Lifetime Value
6. Strong Organic Demand
7. Great Product
8. Large TAM

Learning the Hard Way: Pela Case

I first invested in Pela Case when it didn’t have any revenue. I met the inventor of the product, Jeremy, at a mastermind in California the year before. He had an idea I really liked — a more climate-friendly plastic alternative that could be used to make all manner of consumer goods, starting with a phone case.

I made the investment. Then got to work finding customers who would buy a compostable phone case made from plants.

This had never been done before.

We were entering a very competitive category that was quite mature and sort of overbuilt. Most people thought we were stupid. Many still do.

As we grew the brand, we learned the hard way that many of the standard operating procedures in the phone case industry weren’t sustainable. Most of our competitors were burning money playing the traditional retail game. Even if they weren’t losing money, they certainly weren’t growing very fast.

We also discovered that to be competitive, we needed to find a way to differentiate our brand beyond the sustainability + eco-friendly niche we carved out for ourselves.

I started to reach into my network and talk to other operators building brands in product categories similar to Pela.

Accessories. Small. High-margin. Competitive. Design-oriented. DTC-first business models.

At the beginning, we had only three of the eight leverage points in this health checklist:

• High Gross Margins
• First-Order Profitability
• Large TAM

You might think, “That’s pretty good!” It was.

But we weren’t consistently profitable, and the business felt difficult to run. More difficult than I thought it should be.

The first area we began working on was cash conversion cycle. The phone case industry has one major fatal flaw — inventory complexity. Apple, Google, Samsung, and the rest of the smartphone makers release new phones every year.

This demands new investments in tooling for phone case companies. Beyond just the phone models + sizes, you also have the added complexity of colors and designs. For reference, Pela Case today has more than 15,000 active SKUs on our .com, and we’re growing to ~60,000 across 75+ phone models.

Inventory complexity created a massive balance sheet and cash flow problem. Even if we could extend our payment terms with manufacturers to 90+ days, we were still guessing which phone models and design combinations to bring into inventory.

Our balance sheet was bloated. Cash, stretched. It sucked.

So we had a crazy idea. What if we brought our manufacturing in-house? Did it right in our own backyard here in British Columbia, Canada?

Everyone I talked to said this was stupid.

This has become a pattern for outlier brands in consumer. The ones who do nine figures in revenue and healthy profit all do things that most conventional wisdom tells them not to. Even today, conventional wisdom tells you to ignore what these brands do because they’re big and can afford it.

My view is the opposite. These brands are big and profitable because they did it differently.

Making the decision to invest in our own manufacturing capabilities was not easy. It was also expensive. It slowed the business down for a couple of years while we restructured.

We had to shrink our team and focus more resources on building the manufacturing platform. We had to change our business from making 6-8 colors to making hundreds of designs, sometimes dropping 8-12 designs a week.

The machine needed to be upgraded. It was painful.

We now manufacture the majority of our products right here in Canada. We make only what we sell and don’t rely on long-lead-time supply chains from China.

I share this story to show you that getting just one more leverage point on this list is very hard. It can take years.

In addition to going after our cash conversion cycle with owned manufacturing, we also improved upon some other areas. Our OpEx shrunk, and our product also improved.

Today, our health checklist looks like this …

 Pela Case Health Checklist: 6 of 8 

1. High Gross Margin ✅
2. Low OpEx: <15% ✅
3. Cash Conversion Cycle ✅
4. First-Order Profitability ✅
5. High Lifetime Value 🚫
6. Strong Organic Demand 🚫
7. Great product ✅
8. Large TAM ✅

Let me explain some of these even more so you can see a very clear picture of what makes this business good to own and the areas where we are still improving.

1️⃣ High Gross Margin

Pela Case has 80-90% ex-factory margins. If you aren’t going to have strong LTV, you need super high day-one margins, especially if you intend on being heavy ecommerce.

2️⃣ Low Opex: <15%

This is really about payroll. Pela’s OpEx falls below this number because we made our team small and nimble. We’re mostly a team of generalists. We are constantly looking for ways to automate jobs to be done.

3️⃣ Cash Conversion Cycle

The basic idea here is that you get paid from your customers before you have to pay your suppliers.

Some of the best brands in consumer have negative cash conversion cycles. They mostly achieve this through very long payment terms with suppliers, usually >90 days.

Pela Case achieves our negative cash conversion cycle because we built our own manufacturing capabilities in Canada.

We manufacture the inventory we need for consumers as we sell it to them. This means we don’t have cash tied up in inventory.

4️⃣ First-Order Profitability

You need to be able to acquire customers profitably on day one. Banking on LTV creates more difficulty in your business. Many people do it, but I wouldn’t recommend starting with that model.

Pela Case has terrible LTV, so we have no choice but to make profit on every order in our business.

5️⃣ High Lifetime Value

We fail miserably here. People don’t buy multiple phone cases. Some do, but most don’t. As hard as it is to accept, LTV is far more determined by the nature of your product itself than “retention” tactics.

6️⃣ Strong Organic Demand

This is another weak area for us; however, but we’re getting better. We built the business entirely off the back of Meta and Google advertising.

The ecommerce industry as a whole is at a precarious stage in the lifecycle for paid ad platforms. They’re getting insanely expensive, we’re over-reliant, and most consumer goods categories don’t have the margins to win the game.

7️⃣ Great Product

I define a great product by how different it is combined with how much a user likes it.

Pela has a really different product than our competition. Plus, we have a product people really like to use. Our marketing minors on the value proposition of eco-friendly sustainability; it majors on why people will love it.

8️⃣ Large TAM

Mobile accessories is a monster category. We’ve only scratched the surface.

 How to Use the Health Checklist  

If you’ve evaluated your brand and know your score out of eight, what’s next?

The very best operators focus relentlessly on improving their score. They pick one or two areas. Go hard after improving them. These areas form the basis for annual planning and major rocks in the business. They give you direction!

I’m lucky to have a huge network of brand builders who I’ve watched do this over the last 20 years. Some have even built in public. You may have seen them do it, too. A good example of this is Sean from Ridge.

None of them exists in a vacuum. Sometimes, you have to accept that getting them all might actually make your business weaker.

That’s the nuance in building in consumer. There is no “one right way” to do things. I know a few super profitable businesses that have only three of the eight leverage points.

But they make it work.

I have two particular combinations of leverage that sometimes work against each other.

Large TAM vs. Cash Conversion Cycle

Without a large TAM, it’s going to be hard to get suppliers to give you really good payment terms. The reason is pretty simple.

Large markets usually have mature supply chains to go with them. Some manufacturers understand the market as well as you do. Sometimes better. This means they are more comfortable extending you better terms.

Smaller markets go hand-in-hand with uncertainty.

We saw this with Lomi.

There were no factories in China that made machines like Lomi. The first factories we worked with were very hesitant to extend us terms. This made our business incredibly cash-hungry. It was a big part of the reason why we raised venture capital.

First Order Profitability vs. LTV

I have rarely seen great LTV brands be first-order profitable at scale. Some do it. They’re unicorns.

Most try to break even on day one of a new customer and make profit on repeat purchase rate. I know of many subscription businesses that operate this way.

Consumables usually mean you’re banking on LTV. Knowing this now will help you model your business out accordingly — particularly when it comes to cash flows.

Your score on this health checklist should help you figure out what to do next in your business.

I’ve looked at hundreds of brands through the lens of this health checklist. It’s surprisingly accurate at predicting the sustainable profitability of a brand.

I’ve also witnessed how the combination of many of these leverage points can help create a real moat around a brand.

This is the root of good strategy in consumer.

Note: Huge shoutouts to Taylor Holiday (Common Thread Collective), Sean Frank (Ridge) & Kevin Espiritu (Epic Gardening) for all the great thinking over the years. Their insights greatly inspired much of this chapter — to say nothing of their influence on my businesses themselves.

Connor MacDonald CMO, Ridge

The Cleanest Checkout Monetization We’ve Seen

We’re always cautious about checkout changes. Too many tools mess with conversion or feel off-brand.

But Pay+ is different.

Here’s how it works …

Rokt Pay+ places a brand-safe offer above the payment buttons (PayPal, Apple Pay, etc.), nudges customers toward preferred wallets, and pays you when they use them.

The first adopters are already seeing +$0.20–$0.25 per order, and this is just the beginning.

The best part? No hit to checkout CVR.

If your team obsesses over margin and doesn’t want to gamble with checkout conversion, Pay+ is a no-brainer for you.

It’s the monetization channel you didn’t realize was already built into your flow.

THE FEED

​Goodbye Websites. Hello AI Commerce​

​New Product Launch Strategy, Net New Reach on Meta, and Big Partnership Swings​

​Operators Titans E002: Portland Leather Goods (with CMO MacCoy Merkley)​

THE TRENDS

This week’s top-five trending news stories, curated by the editor of CPG Wire

1. Once Upon a Farm Files IPO Paperwork: CNBC​

Once Upon a Farm is one step closer to listing on the NYSE. The children’s nutrition platform is still losing money despite being a 10-year-old company, but the growth story is there, and gross margin is slowly improving.

In terms of growth, revenue jumped from $94M in 2023 to just over $200M in 2025. Additionally, the company has successfully expanded into new categories like shelf-stable snacks, frozen meals, and refrigerated nutrition bars.

2. Im’peccable Chicken Scores on Shark Tank: Stack3d​

Im’peccable Chicken, a producer of ready-to-eat, on-the-go chicken breasts, raised $200k from Lori Greiner and Kevin O’Leary on Shark Tank.

The company’s motto — “Nature’s Protein Bar” — is pretty spot-on considering they sell fully cooked chicken breasts containing 27 grams of protein and 140 calories. These snacks are already popular in overseas markets like Taiwan, and Im’peccable believes they’ll become popular stateside too.

3. Little Spoon Makes Long-Awaited Retail Debut: Fast Company​

Little Spoon, the largest online baby and kids food brand in the US, finally made its retail debut after launching over seven years ago — 23 products across seven different categories at Target, making it the largest food & beverage launch in Target history.

Founded by husband-and-wife duo Ben Lewis and Angela Vranich, Little Spoon expects to exceed $150 million in net revenue this year, and it’s barely tapped into the retail channel.

4. Sazerac Buys Western Son as Spirits M&A Heats Up: The Spirits Business​

Spirits M&A appears to be back after a tepid few years. Sazerac, the New Orleans-based spirits giant, has acquired Western Son Vodka for an undisclosed sum. Founded in 2011 and based in Pilot Point, Western Son produces a variety of vodka products at its North Texas distillery.

While most of the other spirits players, like Diageo and Pernod Ricard, have been busy divesting brands, Sazerac has been aggressively acquiring assets like BuzzBallz, SVEDKA, and Western Son.

5. Joyride Hits Major Milestone: LinkedIn​

Joyride, a lower sugar candy brand co-founded by YouTuber Ryan Trahan, is now the top-selling non-chocolate candy brand at Target. To reach the top spot, Joyride beat established and iconic names like Skittles, Nerds, Starburst, and Sour Patch Kids. Joyride has only been available at Target since last summer, making this achievement all the more impressive.

 Masterclass: In Session! 

Alongside Operators Titans (our brand-new show), we’ve also put together the ultimate Q4 expansion pack.

1. Online event on October 29th
2. Step-by-step channel playbook
3. 100 AppLovin invites available
4. Spend $5k, get $5k ad credits
5. Plus more than a few surprises

There’s ~8 codes remaining. But we’re trying to get more!

If you want one + everything else, here’s where to get started with the Operators Masterclass on Expansion.

With thanks and anticipation,
Aaron Orendorff 🤓
Chief Content Officer

Disclaimer: Special thanks to Postscript + Rokt for sponsoring today’s newsletter.

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