In this Q&A, you’ll hear from Jarret Christie of Vibrant on lessons learned in 2022, trends in gut health and sustainability, and the rising cost of capital.
What are your biggest learnings from 2022?
Jarret Christie: In 2022, we went back to the basics at Vibrant.
It sounds obvious, but the “Golden Rule” is often forgotten: Products must perform well (per my own criteria, taste great and offer real health benefits) in order to command the repeat purchase necessary for sustained sales growth.
How is the macroeconomic environment impacting dealmaking?
JC: From a capital allocator’s standpoint, the repricing of risk associated with the end of the “free money” era has been a gift.
The rising cost of capital means that investors get more “bang for their buck” (i.e., more leverage) in deals. Further, with fewer providers of capital, sector specialist VCs become more critical and receive increased deal flow from which to evaluate new investments.
Of course, there are negative impacts to investors that come from steep market corrections, but strictly from a dealmaking perspective, it has been a notable benefit.
What surprised you most in 2022 — what trend or market did you change your mind about?
JC: Vibrant was formed to focus on plant-based, whole-food ingredients — as opposed to formulated “fake meat” products. That said, even we were shocked at how quickly consumers turned against the industrial, oil-laden “Frankenstein” products on the market.
We were pleasantly surprised to see this reversal happen so quickly, as the results of a more health-aware consumer are visible in our food companies’ sales.
What trends are you most excited about going into 2023?
JC: We remain uber-bullish on all things gut-healthy and earth-friendly.
Products that eschew cane sugar, seed oils, gums, chemical additives and preservatives, and help eliminate factory farming will only grow more coveted by consumers as they wake up en masse to the fact that we’ve long been poisoned for profit by Big Food.
Additionally, we believe alternatives like clean alcohol and clean candy will disrupt mass market categories at a blistering rate.
What advice would you give founders facing uncertainty in the current economic climate?
JC: Extend your runway however you can. It’s all about survival at this stage in the business cycle.
Those who persevere through this phase of natural—and much-needed, in my opinion—creative destruction stand to benefit immensely once we re-emerge into a new phase of economic growth, with far fewer competitors and possibly with an entire category to themselves.