Q&A with Morgan Zanotti, Summit Partners Executive-In-Residence

‍by Adrianne DeLuca
This interview originally appeared on Nosh.com.

Morgan Zanotti has traversed the near entirety of the CPG landscape – going from various marketing stints to co-founding Primal Kitchen and later heading up new ventures as an executive at Kraft Heinz after the conglomerate acquired her brand in 2018. Her newest post, Summit Partners Executive In Residence, coalesces many of those experiences and brings her expertise to a different side of the equation.

We recently caught up with Morgan to learn more about the new role, how she assesses “profitable, high-growth, founder-owned businesses” and glean business-building tips, tricks and exclusive insights that can stand the test of time.

‍The interview has been lightly edited for clarity.

What will be your main function within Summit’s executive-in-residence ecosystem?

My main function within Summit’s EIR program is to help identify new investment opportunities and advise growth-stage companies in the functional foods and health and wellness sectors.

One of my all-time favorite things to do is talk to executives and entrepreneurs – particularly in these sectors – so I’m having such a blast regularly meeting great companies and the founders and executives who lead them, hearing their stories, learning about their businesses and seeing if there’s a way we can add strategic value beyond capital. Summit has a team of thoughtful, smart professionals who really understand how to partner with executives and entrepreneurs to help drive value in the consumer sector. It’s really such an exciting opportunity for me.

How do you believe this role will compare to your position leading new ventures at Kraft? What were some key learnings you are taking with you from that role to Summit?

I’ve had the privilege to scale a business from $0 to $200 million in revenue and lead that business through an acquisition to Kraft Heinz. And then, I sat on the other side of the fence for the last five years and was fortunate enough to learn from one of the largest food companies in the world.

I believe marrying those two perspectives will be most valuable in my new role with Summit. Understanding how strategics evaluate businesses and really having lived the perspective of the strategic will be helpful in evaluating potential investments and how we can best support leaders with ambitious goals in the category.

How has the move from startup to conglomerate to now the investment-advisory side shaped your view of the industry and what it takes to build a successful food business today?

There’s that saying, “if you knew then what you know now, you probably would never do it again.” My partner at Primal Kitchen, Mark Sisson, and I always talk about what a blessing it was to have been naïve on how hard the industry is when we launched Primal Kitchen. And it feels like it’s only gotten more challenging with inflation, supply chain issues, freight, competition and more.

First and foremost, as a founder today, you really need to clearly define what success means for you. Do you want to build a lifestyle business? Do you want to run a DTC business forever, or are you looking for a partner to support your expansion into omnichannel? Do you envision acquiring other synergistic brands? What do you want to be when you grow up?

I believe you must have a clear vision and then build backwards from there. But one thing is certain: If you don’t have good unit economics or you’re banking on margin greatly improving with scale, you are dead in the water. And brand is still No. 1. Make sure you mean something to a group of passionate people. If you don’t mean something to someone you’re going to be easily replicated.

Tapping into your diverse array of industry experience – what is one learning that you believe can be applied to all areas of growing a business?

Do it yourself before you hire it out. I always said “scrappy” was my favorite word in business. We did everything in-house at Primal Kitchen – from managing 500-plus influencers in Google Sheets, to package design, to managing our media spend. I’m a big believer in leaning into your own team and building the skillset in-house vs. working with a bunch of agencies.

Are there any particular lessons from building Primal Kitchen that still shapes your view of what makes a successful business today?

When we launched Primal Kitchen, Mark Sisson had spent 10 years blogging and building a loyal following online. We had people to talk to. Creator businesses are much more common today than they were nine years ago, but our community was critical in helping us launch the brand with huge initial success. Of course, the product had to stand on its own to continue the momentum, but the community was instrumental in building authenticity and trust with our core consumer.

As founder-led brands think about a potential exit, what should be top of mind, particularly in today’s climate?

I see the best exits with brands that have high growth, real profitability, a strong brand, category/product focus, and huge upside/whitespace for someone to realize in the brand’s next chapter. This last point is something a lot of people forget about.

Sometimes that innovation idea or Walmart distribution is worth more in a PowerPoint deck than it is in actuality because there’s execution risk and the perceived size of that business ends up being smaller than what a potential acquirer would assume had you not ever expanded into that retailer. There’s risk in launching into three new categories or taking the Kroger placement before your brand is ready. You don’t want egg on your face when you go to sell your company.

Considering the current operating environment, what advice would you give a food business contemplating a new category or channel expansion?

Don’t do it? I’m kidding. Kind of. I wouldn’t enter a new category (unless you have some revolutionary innovation that’s never been done before) until your main category/business is solid: strong gross margin, velocity is top of the category, manufacturing is stable, product is consistent, packaging is working, you’ve maxed out innovation in that category. I wouldn’t launch into a new category until I had the capital to hire extra salespeople, hold additional inventory, and manage all of the things that happen with category expansion.

Channel expansion is more of a “when and how” than an “if” question. You’re probably going to have to do it at some point, so what’s the right way to do it for your business?

Are there specific opportunities or sectors you are excited to explore through this new role?

I’m a big believer in macro trends that are here to stay: low/no sugar, high protein, high fiber, low carb. Even in a world of GLP-1 medications, I’m still a believer in these longstanding trends that have survived decades of fluctuating “diets.”

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Reprinted with permission. View original article on Nosh.com.