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10 Reasons Direct-to-Consumer Food and Beverage Brands are Thriving During Quarantine

10-reasons-direct-to-consumer-food-and-beverage-brands-are-thriving-during-quarantine

In a world where everyone’s favorite bars, restaurants, and cafes have temporarily shut down, consumers are looking to get their fix on these experiences they’re missing. 

Surequarantine has some perks, like all the shows we’re catching up on and the comfy clothes all day and everyday, but what about our luxury coffees? Our Friday night cocktails and wine Wednesdays? Well, people have figured out how to get access to these goods from home, and it’s through direct-to-consider (DTC) food and beverage ecommerce brands.

Definitely seeing food/bev DTC brands over-indexing in their sales right now across the board — alcohol, snacks, fundamentals (oils, seasonings, etc.), chocolates, etc.

— Nik Sharma (@mrsharma) April 29, 2020

Food delivery is KILLING it rn – doesn’t matter if it’s email or Facebook ads. Items easily found in the grocery store like speciality chips, sauces, etc are also a win. Those categories are the ones that are having to adapt quickly because of their purchase flows + fulfillment.

— Deb (@DebMecca) April 29, 2020

There are a ton of brands to discover within the Shopify ecosystem alone, and facts show us that DTC food and beverage brands are doing insanely well while everyone is in quarantine. This is because customers are discovering ecommerce stores like Skinny Mixes, which allow you to make delicious brews and cocktails right from home. 

Shoelace merchants in the Food + Beverages industry have been killing it. Nearly double the weekly median revenue over the past couple of weeks vs. Jan/February. pic.twitter.com/Hh5634mdcB

— Elliott Brand (@ElliottBrand) April 29, 2020

To understand more about this upward trend for food and beverage brands, we asked a few ecommerce brands, marketers, agencies, and other tech apps for their opinions on Twitter (thanks to everyone who helped out!). Here are some of the key insights:

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Meal at home

1. Customers are spending more time at home than usual

Although this may seem obvious, it’s a major factor in the increased DTC sales for many brands since people aren’t purchasing from restaurants, cafes, or bars anymore. This idea was pulled from a Klaviyo article, a leading email marketing ecommerce platform. 

“People are now spending 14 hours awake at home each day instead of six. This is what’s driving new essential spending. New essentials make up nearly 40 percent of sales among consumers.”https://t.co/pjtqn9syxe

— Jake Cohen (@jfccohen) April 29, 2020

Cookies in box

2. Products with a long shelf-life are more desirable

With the current pandemic, people want to leave their house as little as possible, which means not going to the grocery store often. Consumers want food that’s going to last a long time in the pantry. This was pointed out by Lucas Walker from Gorgias. 

Most food and drink companies are seeing an increase in sales – especially anything shelf stable.

— Lucas Walker (@WalkerLucas) April 29, 2020

When it comes to DTC food and beverage brands, they typically have a longer shelf life since they already have to go through days of shipping to get to consumer’s houses. This type of food and beverage is desirable right now, which is part of the major increase in sales!

Drink Haus

3. Consumers want outside experiences in their homes

It’s no doubt that consumers miss going out for dinners, going to the cafe to study, and heading to the bar on the weekend. To fill the void, many of them have found brands that can offer the same taste of great coffee and cocktails right in their home. 

2. From an ad creative standpoint we used to really emphasize how great it is for hosting parties, celebrating with friends, etc. We now really focus on the idea of having bar quality cocktails at home. “Bar quality craft cocktails, in your home” is in one of our best ads…

— Alex Afterman (@albabe10) April 29, 2020

Alcohol outsold non-alcohol for the first time in ReCharge history, I think that speaks for itself 😂

— Chase Alderton (@ChaseAlderton) April 29, 2020

Seeing huge growth with companies like https://t.co/b7X2npO2HM. They sell zero-calorie syrups that let you make flavored coffee and alcoholic drinks. People aren’t going to bars/coffee shops right now so they want to order home kits to replicate these types of drinks. pic.twitter.com/Oq1vUdld39

— Matt Schlicht (@MattPRD) April 29, 2020

Although many brands have leveraged this in their ads, even without advertising and targeted messages people search for these brands to help give them a bit of their outside experience in the comfort of their home. Hello DIY cocktails!

The Good Kitchen Box

4. Consumer and society trends

Aside from what consumers want, Carter Lewis from The Good Kitchen noticed natural spikes during quarantine when consumers received support money from the government. 

Can confirm. @eatTGK has had a couple spikes (very early, and when stimulus checks arrived, and when we launched a new product), otherwise have remained fairly similar to pre-pandemic.

— carter lewis (@carterlewis) April 29, 2020

These type of factors are difficult for brands to track, but it makes sense that people are going to spend money when they get money, especially in the DTC food and beverage industry while stuck at home. Take note of these trends and how they may impact your sales.

Sanzo sparkling water

5. Consumers exploring new products to spice up quarantine

Look at trends for what’s popular, and get marketing if your brand fits that. For example, the sparkling water industry has done well for itself during this time while people have made it clear they’re shopping for it. Sparkling water brands were growing pre-quarantine, but now that people are at home, they’re looking for the next best thing to try to keep them hydrated. The Twitterverse noticed sparkling water is doing well during this time.

— Deb (@DebMecca) April 29, 2020

I’m buying a ton more sparkling water recently…

I really want the cauliflower chips.

— Ben Parr (@benparr) April 29, 2020

In fact, the brand Sanzo found revenue for March was up over 60% compared to February, and April saw an increase of around 50% compared to March. Who doesn’t love flavoured sparkling water? 

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Donating Check

6. Getting involved in community outreach initiatives

Community outreach is a great way to help the community while getting a fresh pair of eyes on your product, and your current customers will respect your brand more for doing it. People like supporting a good cause!

@CharliesBurgers is Toronto only (I believe) but above the amazing wines that are included, I’ve been so impressed by their fulfillment (customer service is amazing), how they’ve given back to local hospitals and the perks that are included!

— Margot Paterson (@margotspaterson) April 29, 2020

This is something a lot of brands are doing right now, but one of the most unique versions we’ve seen is through Haus’ restaurant program. Essentially, customers can pre-order a product from a restaurant, and Haus pays the restaurant immediately for an immediate impact. 

Skinny Mixes Cocktail

7. Referencing quarantine life in key messages 

Your customers lives have completely changed, and your original marketing messaging just won’t work the same anymore. This has been especially beneficial for DTC food and beverage brands.

3. “Craft Cocktails In Your Home” and “Cocktails To Your Door” are 2 of our better performing headlines. I figure people are spending more time than ever at home, emphasize how our product makes that time better.

— Alex Afterman (@albabe10) April 29, 2020

By making your key message about a better in-home experience, customers will be reminded that your alcoholic beverage, caffeinated brew, snack food, or meal is what they need to enjoy quarantine more.

Phone and Instagram

8. Leaning into their most-used channels

Remember where your customers live. What are people doing the most right now while they’re indoors? Checking social media all day long. Leverage this to reach out to them.

Yes big time! One of our best performing categories right now. Many of our customers have been leaning into email marketing (mostly with @klaviyo) & @reddit + @Snapchat ads.

— Margot Paterson (@margotspaterson) April 29, 2020

@kotnbasics pay it forward campaign got on Reddit and sold out in a few hours I believe (also they have the coziest/softest basics) @clearbanc gets all our swag from them. Check this out: https://t.co/OhpYHBJh1g

— Margot Paterson (@margotspaterson) April 29, 2020

Your email, SMS, and messenger marketing is waiting to shine during this situation. Food and beverage brands are in the perfect situation to reach out and create new relationships with a lot of new customers. 

Haus box

9. Improving their shipping to stand out to shoppers

A good shipping experience is always important for customers. One brand that has been doing this well is Bev, which is currently offering same-day delivery for anyone in the Los Angeles area, and they’re donating 100% of their online sales to Covid relief. The same-day delivery is hard to beat when customers are missing the instant gratification of purchasing in-store. 

I work for a wine shipping company that does wine club management and compliance for wineries across the country and it’s so insane right now we can’t keep up! Everyone is buying wine, mead and cider to survive apparently

— olivia (@ollyverthewino) April 30, 2020

This has people questioning whether brands are able to keep up with the increase in sales. We’ll let one of the pros herself answer this one, and that’s Helena (founder of Haus, the apéritif alcohol brand). 

The best indie wine brands will sell out until next vintage, mass wine brands will take advantage of bulk market, non-aged spirits can move quickly bc fast production time but will likely have supply chain issues w/ bottles.

— Helena Price Hambrecht (@helena) April 29, 2020

Brands that are able to keep up with the increased sales and continue shipping will do a good job of standing out. Offering a good shipping experience is one great way to optimize the overall shopping experience customers have with your brand. But even if your can’t, the best solution is to just be transparent with your customers to keep their loyalty.

Girl on phone

10. Offering a great customer experience for retention

Despite the increase in sales right now, brands aren’t sure whether they’ll continue to sell this much as soon as quarantine ends. Only time will tell. But thinking about retention methods now will help ensure brands keep all these new customers they’ve acquired.

@Tina_Donati honestly not a ton as it’s only been a few months. The takeaway I keep noticing is the customer experience. People are naturally buying (low CAC), so you HAVE to keep them post-apocalypse.

— Chase Alderton (@ChaseAlderton) April 29, 2020

For example, Social Tonic has used social media to stay in touch with customers who miss going to the bar. They’ve created an official “Stay-At-Home Fun Guide” with 4 games related to their drinks that can be played at home. This ensures a great customer experience by going beyond just their products to engage with customers in a new way.

Wine in crate

The future of DTC food and beverage brands is unknown, but we do know they’re crushing the ecommerce game right now. 

— Jake Cohen (@jfccohen) April 29, 2020

With all the customers they’ve acquired while people are in quarantine, we’ll be keeping an eye out for strategies brands use to retain these customers post-pandemic. 

For now, enjoy your in-home speciality coffee, wine or cocktail, or easy meal, and stay safe!

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This article originally appeared in the OctaneAI blog and has been published here with permission.

About the author

Steve Hutt

Steve has entrepreneurship in his DNA. In the early days of online commerce, he achieved Power Seller status at eBay, which then propelled him to become a founding partner of VisionPros.com, a contact lens, and eyewear retailer. After a successful exit from his startup, he embarked on his next journey into agency work in e-commerce and digital strategy.

Currently, Steve is part of the Merchant Success Team at Shopify Plus, where he is a Strategic Advisor helping brands continue to grow and scale with the Shopify Commerce Platform.

To maintain his competitive edge and life of learning mantra, Steve also hosts and produces a top-rated weekly podcast show, eCommerce Fastlane, where he interviews Shopify partners and subject matter experts who share the latest marketing strategy, platforms, and must-have apps, to help Shopify brands build and scale lifetime customer loyalty.