Why direct to consumer is booming

For those of us keeping a close eye on the food industry, one of the most interesting aspects of the last couple months has been the pivot many packaged food brands have quickly made to direct-to-consumer channels as existing supply chains and marketplaces have been upended.

While the pandemic didn’t create all this D2C activity, it assuredly accelerated it. With restaurants shut down and people stuck at home, there has been record amounts of online grocery shopping. So people are getting used to the idea of buying food online, and there is a new market suddenly available to brands now.

But in addition to more money, going direct to consumers means that brands can own that relationship. With those relationships comes all kinds of customer data that opens up new insights and opportunities (to, you know, sell more stuff).

The big challenge for companies going direct, however, will be educating those customers about new D2C sales channels. Sure, people are forming new habits around grocery e-commerce, but they are still shopping with established retailers like Walmart and Amazon. Companies will need to provide some kind of additional value for direct purchasing to incentivize consumers to make that switch.

​Pepsico launched its own D2C site to sell snacks.
Barn2Door raised $6 million to help farmers sell their food direct to consumers.
Restaurant food suppliers Cheetah, DineMarket, Pepper, and Choco all pivoted to sell directly to consumers.
Chipotle launched a D2C service connecting its consumers with its farm suppliers.
Vertical farm company Fifth Season started selling greens direct to consumers (in Pittsburgh)
That list doesn’t even include all of the small CPG startups that are selling their unique snacks and such via their own websites.

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