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5 97% 45% OF THE UK’S CHIEF MARKETING OFFICERS SAY DTC CHANNELS ARE A HIGHER PRIORITY SINCE THE COVID-19 PANDEMIC BEGAN Source: ChannelAdvisor DIRECT TO CONSUMER: THE STATS “OurDTCplatformwent from ideation to live in sixweeks” A s soon as the pandemic kicked off you could see online shopping would accelerate massively. We saw that creating a DTC marketplace would be a great way of helping more brands get in front of people. That was the genesis of Mighty Small, our DTC platform, which went from ideation to live and transactional in six weeks. It took a lot of late nights! We started with around 30 brands on the platform and now have close to 70. In the last six months we’ve had around 700 brands approach Mighty ALEX SMITH COMMERCIAL DIRECTOR OF YOUNG FOODIES Small to get their product listed. We only have a capability in ambient at the moment but next year we’ll be working on chilled and frozen. ‘Female under-35 baking enthusiast’ is a category that does well for us on Facebook ads! Late April and May ‘21 were slower months for the DTC side of things; sales definitely dropped as restrictions lifted and people went about their normal business but it had recovered again from the beginning of the summer. It’s one of a number of Young Foodies’ revenue streams, so it’s never panic stations. We’re never reliant on one model. Mighty Small has definitely evolved. It started entirely DTC and its evolved to include corporate gifting, some B2B, and to be a shop window. Retail sales are a pretty even split between pre-made bundles (a picnic box, or a night in box), people making their own bundles, or large quantities of a small assortment, and then corporate Millenials and Gen Zs look for connection, to use the digital world for their information and see through greenwashing gifting. That category has shifted from working-from-home sweeteners to Christmas gift boxes and corporate gift boxes. The category’s moved but as one element switched off another starts. We’re doing more office-based deliveries now for workplaces that want to offer healthy or vegan snacks and drinks for their employees. Health is the biggest trend that we see. That desire from our customers to do good has grown, big time. One of the big reasons corporate gifting is successful is not only are they spending money on brands with quite big sustainability or ethical credentials, we also have a charity partnership with FoodCycle so every box bought we donate a meal. There are some interesting reports on what millennials and Gen Zs look for in a brand and they want personal connection, to use the digital world for their information and seeing through greenwashing. 1 DTC IS HUGE, AND HERE TO STAY Recent years have seen multinationals like Nike, L’Oreal and Pepsi bypass their usual route to market with direct-to-consumer selling from their own online platforms. Why? Well, with retail traffic down and pandemic disruption ongoing, smart operators are using the increasingly sophisticated ecommerce solutions available to engage directly and make sure every step of the consumer’s experience tallies with the brand’s values. 2 THE PANDEMIC TRIGGERED HUGE INNOVATION DTC activity has skyrocketed in the food and drink category as hospitality-facing brands pivoted to retail. The Wasabi Company is a classic example: “In March 2020 the vast majority of our sales were to restaurants or wholesalers in the UK and Europe,” says managing director Jon Old. “We decided to focus all our efforts on marketing our online sales and immediately sales started to climb. As the UK lockdown took hold, we saw an exponential increase in web traffic and sales.” 3 NEW DTC CHANNELS CAN BRING LOGISTICAL HEADACHES... Blackwoods Cheese Company added a shopping facility to its website to broaden its retail reach. “It has been quite difficult if I’m honest!” says director David Holton. “We are cheesemakers with a very tight team of packers who fill our jars with cheese/oil/herbs; it’s a very time consuming, labour intensive and space needing process. We had to keep our budgets under control during the pandemic so we wouldn’t have been able to cope with a huge influx of online orders without it having a negative effect on the amount of cheese we could physically prepare. We were grateful to see a small increase in sales but too much more and we would have struggled and actually had to hire more staff to pack more cheese with nowhere to pack it.” 4 NEW DTC CHANNELS ARE HERE FOR GOOD... “The most gratifying is that sales from our website in 2021 are outpacing 2020,” says Jon Old, “which means the new customers we attracted have continued to shop with us. We have developed the skills to market and service this sector more effectively than ever before and this continues to be rewarded. This has been of particular importance as our sales to the EU have been significantly hampered by export restrictions and delays post Brexit. Lockdown sales, and the strategies forged during this time, have not only saved our 2020 but have much better placed to cope in the new trading environment in 2021.” 5 APPS ARE CHANGING THE GAME... “It was a no brainer,” says David about getting his cheeses listed on food app Dija (which promised ten-minute delivery on groceries in London). “They have been incredibly easy to work with and we are happy that customers have been able to get out cheese in this way. Our post and packaging fee through our own website is not low so we enjoy working with Dija as the end consumers can buy Graceburn alongside their regular shop which makes any delivery costs less significant for them.” TREND 1: DIRECT TO CONSUMER DTC is exploding in food and drink, making big changes in the way brands get their products to market “IT'S NEVER PANIC STATIONS . WE'RE NEVER RELIANT ON ONE MODEL ” ALEX SMITH, YOUNG FOODIES OF BRANDS ARE SELLING MORE PRODUCTS THROUGH THEIR OWN CHANNELS NOW VERSUS BEFORE THE PANDEMIC Source: ChannelAdvisor IN PARTNERSHIP WITH