Omnichannel finance: Navigating the finance frontier of multi-vertical growth

Note: This article is adapted from a talk at a recent Finance Alliance event, delivered by Federico Reyes, currently Fractional CFO at BonBon. At the time of the session, Federico was CFO at Magnolia Bakery.

Growth is the magic word

Every company wants to grow, and the first place most of us look is new sales channels. That's absolutely a powerful lever when it's operating well.

But the truth is, it brings a ton of complexity, and finance is the function left holding the bag to manage that complexity.

Why is it complex? Because every channel comes with different metrics, different unit economics, and different cash implications.

Managing an omnichannel business really is like managing several different companies within one. Answering questions in that kind of environment can feel messy. Things overlap, and they're not always perfectly identifiable.

But here's the reassuring part: the questions you're actually trying to answer stay the same.

Where do we grow? How do we grow? How do we manage performance? And how do we manage cash at the same time? Getting there just requires a slightly different skill set.

I want to share examples from companies I've worked with in high-growth omnichannel environments. I'll say upfront that these examples aren't a template you should lift and drop into your own organization.

How you go about this is part philosophical, part practical, and partly just personal preference. I'm always more interested in hearing how other finance leaders approach it in their own world than in insisting mine is the only way.

Three very different growth stories

The case studies I draw on come from a few companies. The first is Kind Snacks, an amazing brand and a beautiful company. Kind started in the classic CPG world: grocery, mass, convenience, and club.

That's how it built its base and how it grew. Like many companies, it eventually asked the natural next question: how do we grow faster?

That search led to international expansion, especially the UK and Canada, then a business-to-business push, and, a few years ago, direct-to-consumer and e-commerce, especially Amazon, as additional growth levers.

Nuts.com took almost the exact opposite route. It's a pure-play D2C company, fully focused on the US, that expanded into e-commerce, then into business-to-business, and now has visions of CPG.

You can actually see Nuts.com products in airports today. So the path was, quite literally, flipped compared to Kind.

Then there's the most complex omnichannel company I've ever seen: Magnolia Bakery. That's where I'll draw most of my examples from, partly because it's my most recent experience and partly because the complexity there is genuinely instructive.

Magnolia's core operations include ten retail bakeries in the US, third-party delivery platforms like DoorDash, Uber Eats, and Grubhub, an advanced ordering channel for web orders and in-store pickup, and a catering operation supported by a commissary. Each of those is its own distinct sales channel.

About four years ago, we asked the same question Kind and Nuts.com had asked: how do you expand a very strong consumer brand? Our answer was to do it through CPG.

That effort has grown to include a direct-to-consumer e-commerce operation, sales on Amazon, a licensing operation at LaGuardia Airport, an international franchising business with forty stores across the Middle East and Southeast Asia, and, more recently, US franchising, which represents a whole new growth lever built on the same discipline and the same thought process: how do we find new avenues for growth?

With that backdrop, I want to walk through four areas: planning, where and how to grow; cost allocations, as an introduction to reporting; cash flow management; and, finally, the opportunities this model creates for a company willing to do the work.

Planning: treat every vertical like its own startup

Let's start with planning, because there are no workarounds here. When you're looking at a separate vertical or a new channel, it is, quite literally, its own business plan. It's basically a startup.

The way we've approached this is to ask: how would we begin this business if it were standing alone?

It's almost a startup within a large company, and it requires its own strategic plan, its own financial plan, and its own understanding of cash implications, all while figuring out how it fits with the existing business.

It's a specific carve-out business case, and because these ventures are usually new territory, you need real experts involved.

At Magnolia, for example, we recently evaluated US franchising as a growth lever, and it was a space that simply didn't exist for us before.

We recognized we weren't experts in that world, so we worked with people who understood the business deeply, to help us understand the right profile and build credible numbers.

One thing to watch out for is the impact on central support. It's easy to get excited and say, okay, great, here's the revenue, here's the top line, here's the cost, here's the cash.

But it's just as easy to forget the implications for central support functions like HR, IT, and legal.

When we were evaluating CPG, for instance, the business case looked great on its own terms, but there was a real implication for finance, specifically, someone needed to handle receivables that didn't exist before.

That's not a departmental problem to sort out later; it's a company-wide implication that needs to be part of the plan from day one.

There's also a temptation, when you're evaluating high-impact initiatives, to try to be comprehensive and exhaustive. My advice is: don't. We all have limited resources in terms of time and people.

At Magnolia, we recognized that direct-to-consumer served an important strategic objective, but it didn't offer the highest potential for profit-pool growth going forward.

So we dedicated limited, but still valuable, time to it, and put the lion's share of our effort into US franchising, making sure we built a very robust plan there, because that's genuinely where the growth was.

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Cash is the constraint. Especially in high-growth environments, a lot of these initiatives are in investment mode, which means they're a use of cash in the short to medium term.

In practice, that shapes the conversations you have with investors: when you layer these growth initiatives in, what does the whole company look like?

Those conversations tend to be iterative, because it's ultimately the investors' decision in terms of capital structure, whether that's debt, additional equity, or lowering distributions.

There are options, and that's honestly the exciting part of the conversation with investors, figuring out what the final plan will actually look like.

And finally, a sanity check on focus and execution capability. In high-growth environments, it's very easy to try to boil the ocean and chase everything at once, because there genuinely are a lot of things that could go well and could drive growth. But that's not the point.

Omnichannel or not, the essence of a strategic plan that's actually achievable is simplicity and focus.

At the end of the day, you have to step back and ask, as we run our day-to-day business, does this make sense, and is it something we can focus on for the next three to five years as an organization?

That's a hard question, but answering it is ultimately what setting strategy means.