D2 Lessons from the front line

I chaired a panel yesterday the 2023 Bread & Jam festival on D2C yesterday with Amy Moring from Hunter Gather Foods, Saskia Roskam ?? from The Biskery and Martin Holden-White from Grubby.

There has been much debate about D2C at the festival this week with industry leaders like Charlie Bigham claiming that he lets retailers "do the hard work and lose money in this space" and David Abrahamovitch suggesting that if you aren't making money from the first transaction you should potentially avoid the channel. There has also been a constant buzz around rising costs in the social space for lead gen and the unpredictability of the big digital players who can change the rules over a weekend and break existing models.

Against this backdrop, I thought it was worth capturing some of the critical lessons that the panel shared as clearly these are quite different businesses with some specific learning:

Hunter Gather Foods do 80% of its revenue via D2C, evenly split between Amazon, via a merchant, and direct-to-consumer. They are now partnering with Amazon to open up the US market next month, something they have found remarkably easy (so far)! Beyond the revenue, Amy talked about D2C as a great way to get customer reviews, generate initial momentum for retailer listings and improve cash flow. It also allows them to offer a wider and more diverse portfolio of products that aren't necessarily available in retail. Amy also talked about the importance of developing a portfolio of products that can drive your AOV, their's currently sits at around ￡40, something they struggled with when they only sold one product. She also flagged the importance of getting your packaging and shipping right as there is nothing worse than a lost or broken order (as we all know). There are also clearly real opportunities for developing partnerships with your delivery suppliers who can often get better deals than going direct and even loans from the likes of Shopify and Amazon to fuel your business.

Grubby is a plant-based recipe kit, turning over ￡4-5M, that is busy creating a subscription business but is also currently exploring retail, as a way to get mass awareness and de-risk the business. Martin admitted that acquiring customers is expensive, often running at ￡50 and so they are laser-focused on cost and finding the tactics and channels that lead to longer-term quality customers. They have supplemented the crowded nature of Facebook by leveraging field sales, at one point having 80-plus people across the UK, a tactic that proved highly successful due to the personalised nature of the interaction. They have also tried experimenting with strategic partners like Bosh! to drive down the costs of acquisition, discover new customers and raise awareness with a similar target audience. Martin also admitted that he had been too cautious with price rises and had recently increased prices by 15% and introduced shipping costs with very minimal impact on order values. They also have spread their delivery risk and have found that working with smaller suppliers like Hived, Z5, or Peddle Me can get you better deals and allow you to speak directly to the founders / senior team, something that is hard with DPD!

The Biskery is a highly bespoke personalized handmade biscuit company that sells directly to businesses and consumers, often around key moments like Christmas and expressing gratitude. They see this space as an ecosystem that allows them to create the right boundaries for their brand. Saskia talked about being a DJ where she loved getting real-time live consumer feedback that allowed her to turn the dials on the product and story they are telling. The majority of their revenue comes from their own website but they do a little bit via Not On The High Street and Yumbles. She also flagged the challenge of overcoming customer anxiety about ordering some items online and the importance of tracking packages. One of my favourite details Saskia talked about, was that every Tuesday they give away free thank-you biscuits, a great example of a brand living their mission.

The team concluded with a great set of final thoughts that I leave you with:

1. Get a mentor as there are real experts in this space
2. Learn to love data as there is so much that can be learned
3. Not something to be dabbled with - you need to commit and invest