Vertically integrated eCommerce is so important, it’s changing the food and beverage industry

Posted on March 13, 2018

Meat & Poultry isn’t normally one of my main sources of news consumption but when I saw this article, I knew I had to write on it.

The article I linked above breaks down how food and beverage startup brands’ go-to-market strategies are radically different from where they were 5 to 10 years ago.

“Today, start-up brands are adopting direct-to-consumer and third-party e-commerce initiatives to gain customers and sales velocity and eventually fund distribution into brick and mortar.”

These new food brands get their stride online through eCommerce and then evolve into digitally native, vertically integrated powerhouses that later dip their toes into brick and mortar.

Obviously, this is messing with the CPG industry, which is notoriously slow to adopt some of the tech patterns that other industries embrace quickly. It also turns the path of getting into a big box store in a few locations first, then widening out on its head.

Food and beverage brands beginning as D2Cbrands rather than following the normal entry channels of big-box retail means that they own their customer base and can build a brand reputation before scaling up and becoming widely distributed.  Basically, by the time a startup food/beverage retailer is on the shelves at Walmart or Target, they can already have a national audience that is vocally endorsing their products.

By the time a product his the shelves and is available on a massive scale, it’s already easily Googled from the aisle and reviews and vocal influencers can be found. That means more boxes from shelf to cart. This simply cannot be overvalued.

I love seeing the eCommerce industry disrupt old thought patterns and the change that it’s bringing to the food and beverage industry is phenomenal. It’s time that larger CPC brands start embracing the D2C trends of the small brands that are disrupting the industry.