We have seen some radical changes in the way people shop over the past few months. The dynamics to getting food on the table have altered dramatically, with long-queues, self-distancing rules and empty shelves, the shopping experience has become a nightmare for most, with many turning to online grocers for help. Direct-to-consumer (D2C) services are nothing new in the food tech industry, but have recently offered an extra lifeline to young companies struggling through the pandemic, with access to new consumers, cashflow boosts and the growth of new categories. Even big names like Pepsico are investing in online marketplaces as direct-to-consumer sales hot up, starting with the acquisition of Be & Cheery, the online snacks e-commerce.
Startups are leading the way for the development of D2C models, from our partner company Eatable Adventures here are some examples of how they are doing it.
Image courtesy of Cortilia
Just as is happening across the globe, Italians are turning to D2C for staple grocery options. Cortilia is the popular D2C service for direct sales that offers fresh food from the field right to your door.With just a click of a button, Cortilia delivers directly to your door within 24 hours.
Based in Milan, the e-commerce leader offers fresh produce to homes throughout northern Italy, directly connecting the final consumer with the own farmers and producers of their food. As startups race to offer more online friendly services, Cortilia was quick to the scene and started to fill a gap in the market when it was first launched back in 2012. Last year the company raised an investment round of €8.5 million led by Five Seasons Ventures in accordance with Indaco Ventures, the largest venture capital in Italy. Due to the sharp increase in online orders and website traffic, the company has been forced to make some changes to ensure an efficient running of its services, including free delivery across the board, earlier closing of orders times and simplified time slots.
Image courtesy of Yfood
YFood Labs is based in Munich and was founded in late 2017 with the goal of creating a nutrient-rich and convenient food solution for hungry millennials. Prior to the outbreak YFood had just started to expand across more European countries and was also investing in boosting its online presence, which already boasted some 200,000 customers; as well as to develop strong relationships with retail partners to help with delivery. These expansion plans couldn’t have come at a better time as focusing on distribution is now key for any startup amid the current crisis.
YFood had already been selling through 13,000 retailers, and also had a business of selling its products via vending machines as well – a retail channel hit hard due to covid. The young company recently managed to secure $16 million in funds amidst covid19 due to the rise of interest of investors in direct-to-consumer startups. The round was led by London-based Felix Capital, and thanks to the amount raised YFood will be looking at boosting its distribution with even more innovative services, so keep your eyes peeled!
Lukes Lobster (USA)
Image courtesy of Luke’s Lobster
Facing a marketplace that has been drastically changed since the outbreak of the coronavirus isn´t an easy job, but many seafood suppliers, distributors and wholesalers are adapting quickly and efficiently by turning to online sales.
Lukes Lobster serves sustainable and traceable seafood right from its source. Since the outbreak threatened their consumer demand they decided to take action and opened an e-commerce store for their community, offering the delivery of their staple seafood dishes right to your doorstep.
Cheetah App (USA)
Image courtesy of Cheetah App
Prior to the pandemic restaurant app Cheetah created software platforms that allowed restaurants to purchase food from their suppliers. But with restaurants closing and intermediary suppliers being left in limbo, Cheetah did what startups do best in a crisis – they pivoted. The young companies business model is similar to other software suppliers in the space, but that it covers the entire food supply. They adjusted their platform to connect consumers with suppliers and thanks to this business model 360 other players in their markets have been benefiting: in-place orders have more people shopping online and helps ease some of the demand strain on existing retailers like Amazon.
Interestingly the grocery retailer recently also raised a big funding round of $36 million, and although the terms were kept firmly under wraps, we can only guess that it had something to do with their expansion into the world of D2C e-commerce.
Oppo Brothers (UK)
Image courtesy of Oppo
Fear not isolated ice-cream fans; low calorie ice-cream brand Oppo Brothers, based in London, have also recognised the benefits of direct-to-consumer sales as they unveil their Oppo Delivered platform, a pilot launch offered to consumers struggling to reach supermarkets amid covid. It has suddenly become very attractive to startups to cut out the middleman and take the reins on their own customers experience. Although retailers offer great scale, controlling your end-to-end client experience allows you to garner direct information from their website data.
Despite counting its packaging partners in highly affected countries such as Italy and Spain, the firm has not been as ill-affected as first thought, with their new online store selling out of their first weeks quota in under two days.
The Sausage Man (UK)
German sausage retailer based in the UK; The Sausage man, is a prime example of how to sell direct to consumer as a wholesaler. The company hasn´t let covid19 ravish their growth plans as they set up a dedicated online shop, available 24 hours a day with special reward systems and e-gift vouchers.
The wholesaler has also eliminated a big hurdle for customers discovering new e-commerce opportunities; they have gotten rid of the minimum order value for those who don’t want to spend up to 50 pounds on one shop.
No clue? No problem. Our partners at Eatable Adventures will be delving deeper into the D2C model and what kind of opportunities it will present after the crisis. This Thursday May 7th join their webinar on “The rise of DTC Food Startups” in which will discover how this model has changed during COVID and how it will be developed in the future, inviting a number of key guest startups like Italian e-commerce leader Cortilia and their CMO Emna Neifar, as well as Ivan Farneti, Founding Partner of Five Seasons, an investment fund that boasts several food tech companies under its wing.
Sign up here!