The Party Is Over For CPG Food
A short story of fad brands and the VCs who loved and lost them
From roughly 2013 to 2021, the food‑and‑beverage aisle looked a lot like Silicon Valley. Cheap Facebook ads, Shopify storefronts and sexy Instagram feeds let tiny startups act big overnight. Venture funds — many with zero background in food — piled in, valuing kombucha, protein bars and plant‑based burgers at 6‑10× revenue, while Big Food validated the frenzy with nine‑figure buyouts (RXBar, Bai, Blue Bottle).
It was tech logic through and through: blitzscale first, profit later.
But physical goods aren’t SaaS.
Supply chains are messy, margins thin, and customer‑acquisition costs on social media skyrocketed as every brand fought for the same eyeballs.
By 2019 funding had already begun to cool, yet COVID stimulus and SPAC mania reignited the fire, peaking in 2021 when “food tech” investment hit $45 billion and oat‑milk darling Oatly floated at a ~$10 billion valuation.
Then the music stopped.
Public markets repriced the hype — Beyond Meat, Oatly and Blue Apron each lost 80‑90 % of their peak value.
Private capital dried up as rates rose; plant‑based startups raised $4.4 B in 2021 but barely a quarter of that in 2023.
Write‑offs and wind‑downs followed: JBS shuttered Planterra, Maple Leaf slashed Greenleaf, and Meati — once valued at $650 M —
sold for $4 M.
What went wrong?
Tech multiples on grocery economics. Food rarely supports double‑digit revenue multiples; a 2‑3× exit is a win.
DTC isn’t a moat. Instagram CACs exploded, forcing brands back into expensive wholesale channels.
Trend ≠ tam: Interest in many fad-based upstarts plateaued far below projections, exposing overbuilt capacity.
Tourist capital fled first. Funds chasing the Tesla of center-store left seasoned strategics to pick through the rubble.
The shake‑out isn’t done but it isn’t all doom. Consumers still demand better‑for‑you foods; the survivors are those with real repeat purchase, disciplined spend and omnichannel fundamentals. But the bubble proved one thing: food doesn’t scale like code — and investors who priced them that way learned (and are still learning) an old‑school lesson in cash‑flow economics.
So what’s next?
The pendulum has swung back to basics: manage cash, manage costs, manage growth expectations.
Brands that make and support excellent products, master unit economics, diversify channels, and build genuine repeat purchase will thrive and those that don’t will die.
4x Exit sounds pretty good to me, assuming you have scaled to a reasonable size. But for some smaller brands any exit is a good exit. I was pretty shocked at the Maeti exit, but just goes to show that either they didn't scale or were underwater in debt. (maybe both).