Corporate Partner Eric Perlmutter-Gumbiner shared his insights on today's most pressing business trends and challenges for Los Angeles Business Journal's Food & Beverage Roundtable.
Below are Eric's excerpts from the feature:
What challenges are the food and beverage industry businesses you work with concerned about today?
Emerging brands are navigating tighter capital markets, inflationary pressure on input costs, and a more selective retail environment. But the bigger challenge is execution under uncertainty — how to scale smart without compromising the brand or burning out the team. Many clients are trying to balance growth with optionality: should they raise, sell, or double down? That kind of decision-making requires clean contracts, thoughtful governance and a tight grip on margins. The brands that are ready to move quickly when opportunity strikes are the ones that win.
What are some of the biggest mistakes that food and beverage companies make in today's market?
Too many founders delay addressing foundational legal and operational issues until they're in the middle of a financing or acquisition. By then, it's reactive and expensive. I've seen strong brands lose leverage — or deals entirely — because of unclear equity splits, missing IP assignments, or lopsided distributor agreements. Another big one: chasing growth without understanding the cost of that growth. In a crowded market, discipline is just as important as creativity.
If you could give one piece of advice to an emerging F&B entrepreneur in Southern California, what would it be?
Don't wait until you're "big enough" to act like a real company. Build clean, thoughtful infrastructure — contracts, IP, equity, governance — from day one. The brands that scale successfully aren't just the most innovative; they're the most prepared. Southern California is full of visionary founders, but the ones who surround themselves with smart advisors and stay focused on execution are the ones who go the distance.
What legal developments or regulatory changes in California are currently impacting the food & beverage industry most?
California's shifting regulatory landscape around environmental claims, labor compliance and labeling is raising the stakes for growth-stage companies. Claims around sustainability, health benefits, or ingredients need to be substantiated — and align with new enforcement trends. On the employment side, wage-and-hour compliance continues to be a costly pain point. And with the rise of ESG scrutiny, companies are being held to a higher standard in both messaging and governance. For F&B businesses, proactive compliance is now a brand risk strategy — not just a legal one.
What common contract issues (e.g., with co-packers, distributors, or vendors) are creating challenges, and how can they be addressed?
Co-packer and distributor agreements are often signed early without legal review, but they become some of the most material contracts in a deal process. Common pitfalls include weak termination clauses, unclear pricing adjustments, and missing protections around quality, exclusivity, or control over IP. I've seen brands locked into bad terms that restrict growth or scare off investors. These agreements need to be treated like strategic partnerships — and negotiated accordingly.
How should small to mid-sized food and beverage businesses be preparing for investment, M&A or scaling operations?
Think like a buyer. That means clean financials, cap table clarity, documented IP ownership, and contracts that reflect your actual leverage. Avoid handshake deals. Get your corporate governance tight now — so diligence doesn't become a fire drill later. And stay focused on margins and repeatability. The more predictable your business looks on paper, the more optionality you'll have — whether it's raising capital, bringing on a strategic partner, or selling.
*This roundtable was originally published in Los Angeles Business Journal and can be accessed here.
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