“Truth,” said Mark Twain, “is stranger than fiction because fiction has to be possible and truth doesn’t.” The unprecedented economic reality of the last few months has felt very strange indeed, with news of impending doom and gloom led by soaring global inflation, continued supply chain disruptions, multifaceted geopolitical turmoil, and volatile financial markets in direct opposition to record low unemployment, healthy consumer balance sheets and, in the case of beauty, robust consumer spending. Consumers, brands, and investors alike have been trying to make sense of it all, and the net result has been a much more cautious approach to beauty and wellness deal activity in Q3 2022.During the third quarter of 2022, the BeautyMatter Deal Index tracked 67 deals, a 27% decline from Q2 2022 and a similar decline year over year. In the context of the unprecedented amount of deal activity we saw in 2021 and the early part of 2022, this decline indicates a marked shift in investor and strategic appetite for beauty and wellness deals. Seen against the context of historic, pre-pandemic trends, however, Q3 2022 deal activity was still above average and shows that investors, while more cautious, remain enthusiastic about the prospects of earning meaningful returns from beauty and wellness dealmaking.