We need to build a 100b conglomerate of regenerative brands, good for you and good for the planet.
What is needed to truly move the needle on health? Create more research, more trials on nutrient density, more advocacy? Or, as Martin Reiter, founder of RARE argues, create the next regen Nestlé or Unilever: a 100 billion (yes, that’s a B) regenerative consumer goods conglomerate, with only better-for-you and better-for-the-planet brands. The demand is there; the current incumbents are unable to innovate in regen, as they are built on chemical ingredients.

The story usually goes like this: a group of people sets up a food (or cosmetics) brand that is better for you and better for the planet. Much better ingredients, honest sourcing, actually healthy, not UPF, etc. Then they need some money and raise funds, keep building, scaling, and at some point, 10–15 years down the road, the founders get tired and want to take some money off the table. and their existing investors need to get out and return money to their LPs.

Currently, their only option is to sell to an incumbent, which then unfortunately usually screws it up. They start tweaking the ingredients, squeezing farmer margins, etc. The original founders leave after a few frustrating years.
Is there a better way? A permanent home for regen, good-for-you, good-for-the-planet brands? A regen Nestlé or Unilever, if you will?

BUILDING A PERMANENT CAPITAL ALTERNATIVE FOR REGENERATIVE BRANDS

There is a structural flaw in the current ecosystem where mission-driven consumer brands are often acquired by large conglomerates, which erodes their founding principles. With RARE, Martin is creating a permanent capital vehicle as an alternative exit, allowing founders to maintain control and mission integrity for the long term.

“We would consolidate, part of their early investors would buy them out, and provide them with long-term, permanent capital in a Berkshire-style fashion where they can actually keep on building their company for the long term if they want.” — Martin Reiter

CONSUMER BRANDS AS THE CRITICAL LEVERAGE POINT

While significant work is happening at the farm level, the most critical path for systemic change is at the consumer-packaged goods stage according to Martin. This is where the connection to the consumer is made and where incumbent conglomerates currently dominate and assimilate better-for-you brands.

“What is actually more of the critical path is how do we get great produce to the consumer? And the main problem when you look at it over the last 10 years is that a lot of companies that do better, that are cleaner, healthier, that work on regeneration at some point, sold to the incumbents, and the incumbents are not necessarily easy or good stewards of their mission.” — Martin Reiter

MARKET OPPORTUNITY IN CONSUMER HEALTH CRISIS

Martin identifies a massive market shift driven by a generational health crisis. Consumers, especially younger generations, are actively seeking cleaner, non-toxic products, creating the fastest-growing and most profitable segment in the consumer goods space.

“Better for the conscious consumer segment is the fastest-growing profit pool in the western world, in the consumer world. That is accelerated and will keep on accelerating because there’s a generational shift where the boomers and Generation Y are now for the first time overtaken by Gen Z and millennials. ” — Martin Reiter

THE RUMINANT METHANE MYTH

Martin shares how his perspective on livestock changed after examining the science. He explains that methane from a stable population of ruminants is part of a short, cyclical atmospheric process and is not a net new driver of warming, unlike fossil fuels.

“I did not understand well enough that ruminant methane emissions are not an active driver of climate acceleration. I was long in that mindset that we need to eat less meat to save the world and the arguments have been put forward by Bill Gates and others that, you know, basically methane emissions caused by digestion of ruminants is a large source of global warming. It turns out that the science is, again, very settled and very clear, and it’s simply not true. And I was shocked when I realized that.” — Martin Reiter

OTHER POINTS DISCUSSED:

Koen and Martin also talked about:

• regen brands need to deliver on better for you and better for the planet
• what talents needs to build long term regen brands
• why consumer demand is there
• why flavour and function must come first and that automatically leads to regen ingredients
• why the current incumbents are unable to respond

LINKS:

• Agricultural Primer 2024 by Martin Reiter
• Feedlot vs Grass-fed beef. A replicable systems comparison on Substack
• The Global Health and Fertility Crisis
• Martin on Substack

LINKED INTERVIEWS:

• Martin Reiter – Why regen hasn’t produced Steve Jobs yet and how to build a modern Nestlé
• Franco Fubini – Delivering unmatched flavour to 2000 of the world’s top restaurant and unlocking consumer demand
• Heather Terry – If you sit in a boardroom, you have the responsibility and obligation to visit the farm where the food is produced

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.