Food D2C Levels Up

Food D2C Levelling Up
D2C brands have taken the FMCG ecosystem by storm, removing all middlemen and directly reaching the consumers, they start online and grow rapidly by giving higher benefit to consumers.

By Aritra ghosh , Features Writer

26 Apr 2023 | 7 min read

It is not an unknown fact that the Indian FMCG industry has been undergoing massive growth. According to a report, over the past twenty years, the FMCG industry in India has undergone a remarkable transformation and by 2025, the FMCG market is expected to reach nearly $220 billion, with a growth rate of 14.9 percent.

With numerous D2C food brands such as VAHDAM India, True Elements, Wholsum Foods, Happilo gaining traction as well as raising funds it can clearly be seen that the said industry is moving forward to disrupt the FMCG vertical.

Food D2C Brands- A Rage

In an increasingly digital world, brands are empowering themselves to connect better with consumers. Moreover, post-pandemic, people have become more self-aware- prioritizing health and wellness which has led to a boost in food D2C brands. “Brands are not just able to target specific consumer preferences, they are able to connect better with consumers resulting in increased purchases and being scalable,” stated Bala Sarda, Founder, and CEO, VAHDAM India.

These brands are further becoming a rage because, traditionally consumer brands used offline distribution channels like super stockists, distributors, and retailers to reach the end consumers implying huge inventories in the pipeline and leading to inefficiencies and a pile-up of channel margins.

“When brands sell directly to consumers, they are not only able to get all these channels out of the way but are also able to connect directly with consumers to understand their needs better,” added Vikas D Nahar, Founder and CEO, Happilo.

Benefits of D2C

Being D2C, offers brands with plethora of benefits including the ability to manage customer experience, further offering control in every step of the customer journey from website design to packaging to shipping.

“We are familiar with our clients and their requirements which enables us to focus on our marketing efforts, design products that are suited to their needs, and offer top-notch customer service,” stated Shauravi Malik, Co-Founders, Wholsum Foods Pvt Ltd.

60 percent of Happilo’s overall sales can be attributed to D2C with consumers having discovered the brand online as the first channel and modern trade stores as the second channel.

With D2C VAHDAM India has been able to reach new markets, geographies, and customers across the globe. According to the founder, one of the biggest edges of being an online-only model is that you fail quickly, but it is not fatal.

Online v/s Offline

Happilo started as a D2c brand in 2016 but over time its growth has also propelled being present in modern trade and general trade stores. The overall contribution from online which comprises more than 120+ marketplaces is about 60 percent of the business while 40 percent comes from offline stores. 

Similarly, Wholsum Foods’ flagship brand Slurrp Farm currently majorly retails in India through its website and e-commerce and quick commerce platforms amongst others.

“We are expanding into the retail segment and are in all major regional modern trade chains in India. Available across 2000+ stores, in 15 cities across the country and it is also available internationally in the US, UK, UAE, and Singapore,” asserted Meghana Narayan, Co-Founders, Wholsum Foods Pvt Ltd.

VAHDAM India is a digitally native brand with over 90 percent of its revenue coming from online sales. It is available in over 1500 stores in the US including Wegmans, Sprouts, Stop & Shop and more, 200 stores in Canada and over 400 Holland and Barrett stores in the UK.

Personal Growth

The pandemic has accelerated growth for most FMCG brands as consumers became more health-conscious. Wholsum Foods was able to register a 20x growth from 2020 to 2023 and aims to reach Rs 1000 crores annually by 2026.

Witnessing a similar trend, Happilo has grown 4x in 2020 and 2021, with healthy eating habits and mid-meal hunger driving the growth.

Shipping to over 130 countries, VAHDAM India is a digitally native brand with over 90 percent of its revenue coming from online sales.

Future of the Industry

VAHDAM is taking the best of Indian wellness to consumers across the globe under a home-grown, ethical and sustainable brand. “Given the shift towards high-quality and trusted wellness products, and the adoption of e-commerce globally, we plan to continue to grow by focusing on going deeper into our current markets,” added Sarda.

Wholsum Foods is also continuously innovating and experimenting with new products and is focused on expanding its reach to more customers in India and abroad, aiming to provide a platform for sustainable food ingredients to become easily adopted and work directly with farmer cooperatives to establish millets as the future quinoa or rice equivalent.

Happilo on the other hand plans to open more than 100+ stores in the next 1 year, aspiring to expand into the international markets like UAE, Europe, and the US where the consumption of dry fruits is higher,” said Nahar.

 

It is not an unknown fact that the Indian FMCG industry has been undergoing massive growth. According to a report, over the past twenty years, the FMCG industry in India has undergone a remarkable transformation and by 2025, the FMCG market is expected to reach nearly $220 billion, with a growth rate of 14.9 percent.

With numerous D2C food brands such as VAHDAM India, True Elements, Wholsum Foods, Happilo gaining traction as well as raising funds it can clearly be seen that the said industry is moving forward to disrupt the FMCG vertical.

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