D2C startups have experienced a real boom in recent months, not only in the food & beverages market. Skipping middlemen and the associated costs seems more attractive than ever. The current situation, characterised by changed consumer behaviour and a self-evident trend towards online shopping, further favours this development.
In the United States in particular, the direct-to-consumer issue appears to be playing an increasingly important, if not indispensable, role. The number of D2C consumers is not only expected to grow to over 95 million consumers in absolute terms by 2021, but also to account for almost 50% of digital buyers. By 2017, however, the number of digital buyers will be just over 30%, with only 55.9 million. Growth forecasts for 2021 are also around 10% compared to this year.
Source: eMarketer
The list contains the following (partially) acquired D2C startups: Babe Wines, Back to the Roots, Foodspring, Freshly, Graze, Iris Nova, Life Fuels, London Fields Brewery, Michel et Augustin, Perfect Snacks, Purely Elizabeth, Popcorners, Primal Kitchen, RXBar and Seedlip.
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The following startups will be presented
Investment
Takeover
Investments in D2C startups
Back to the Roots
Corporate: Campbell Soup Company
Back to the Roots produces and sells online “Ready-to-Grow” sets for mushrooms, vegetables and kitchen herbs. Supported by Acre Ventures (the independent VC arm of Campbell’s Soup), the startup also succeeded in launching at Walmart.
Freshly
Corporate: Nestlé
Freshly delivers healthy ready-to-eat meals. The customer only has to warm them up. In 2017, the Swiss Food & Beverages company Nestlé expanded its activities in the area of health-oriented food in the D2C sector by acquiring a stake in the US startup.
Iris Nova
Corporate: Venture Emerging Brands (Coca Cola)
The D2C beverage startup (Dirty Lemon, among others) has its own distribution and delivery platform in order to respond directly to the needs of the modern consumer. The VC fund VEB of Coca Cola Company was the lead investor in the last round of Seed.
Life Fuels
Corporate: Dr Pepper Snapple Group
The Life Fuels water bottle tracks drinking behaviour and allows vitamins, electrolytes, antioxidants and flavour to be added to the water, thus individualising the drinking experience. The Dr Pepper Snapple Group (now Keurig Dr Pepper) invested in 2019.
Purely Elizabeth
Corporate: General Mills
At the startup Purely Elizabeth the founder Elizabeth Stein is in the foreground. She produces and sells cereal products made from alternatives such as quinoa, hemp or chia. The General Mills Venture and Development Unit, 301 Inc. invested in the startup in 2017.
Takeovers of D2C startups
Babe Wines
Corporate: Anheuser-Busch InBev
In 2019, the beverage company Anheuser-Busch InBev bought the online wine brand Babe Wines, which was founded by the American influencer and comedian Josh Ostrovsky (@thefatjewish).
Foodspring
Corporate: Mars Inc.
With its range of protein shakes, snacks and dietary supplements, Foodspring is aimed primarily at athletes. In mid-2019, the Berlin-based startup announced that Mars Edge, a subsidiary of the Mars Group, would acquire a “clear” majority of the shares.
Graze
Corporate: Unilever
Graze has specialized in healthy snacks in the form of snack nuts and bars. Through the takeover by Unilever at the beginning of 2019, the startup was able to achieve an even greater reach and thus conquer the British market in particular.
London Fields Brewery
Corporate: Carlsberg Group
In 2017 the Carlsberg Group bought the startup from Great Britain. The London Fields Brewery brews the beer directly in London and distributes it via its webshop and in its shop next to the brewery.
Michel et Augustin
Corporate: Danone
Through its online shop, the French start-up offers mainly pastries and desserts, but also juices and drinking yoghurt. Danone acquired the startup in 2016 for €15 million.
Perfect Snacks
Corporate: Mondelez
Perfect Snacks is a pioneer in the field of freeze-dried snack bars. After Mondelez bought the majority of the shares, the startup expanded its portfolio to include products such as nut butter or its own children’s lines.
Popcorners
Corporate: PepsiCo
PopCorners is known for its popcorn especially in the gastronomy scene of the USA and also creates direct contact to the consumer through its online shop. In PepsiCo’s portfolio since 2019, the company has been pursuing its mission to make salty snacks healthier.
Primal Kitchen
Corporate: Kraft Heinz
Primal Kitchen has specialised in sauces, dressings and spices. Taken over by Kraft Heinz in early 2019, the startup has since been able to expand its product line even further. Primal Kitchen focuses primarily on healthy products, free of additives and prepared as naturally as possible.
RXBar
Corporate: Kellogg Inc.
RXBar produces and distributes healthy cereal bars and nut-based products. With the takeover by Kellogg Inc. in October 2017, the startup has already more than doubled its sales in its first year. Meanwhile the products are real bestsellers.
Seedlip
Corporate: Diageo
The British brand Seedlip distils non-alcoholic drinks from herbs, spices and fruits. The world’s largest producer of spirits, Diageo, purchased the startup in 2019 and thus entered the direct marketing business with non-alcoholic distillates.
