Food Giants Double Down on DTC Direct-to-Consumer Channels
Food e-commerce continues to grow, and DTC (direct-to-consumer) channels are becoming an increasingly important business segment for food giants. Although their revenue is hard to rival traditional retail, DTC provides brands with unique opportunities to test new products, gather feedback, and counter digital-native competitors. Companies like Hershey, PepsiCo, and Beyond Meat have already made moves, and industry data also indicates the potential of this channel.
As food e-commerce continues to expand, more and more food manufacturers are selling products directly to consumers through their own websites. This direct-to-consumer (DTC) channel is becoming an increasingly important part of the business landscape for large food companies, contributing billions of dollars in annual revenue to the industry.
Although DTC business is difficult to surpass traditional supermarket shelves in terms of revenue scale, this channel provides brands with unique opportunities for deep interaction with consumers, can be used to test innovative products, and catch up with digital-native emerging brands that have gradually entered mainstream retail channels thanks to their online popularity.
"Food companies may realize that this segment is becoming increasingly critical," said Neil Saunders, Managing Director of GlobalData. "They don't want to be left behind by the times. It's like we need to establish a presence in this area first, because once it scales up, we don't want to be caught off guard."
On Hershey's official website, consumers can customize snack gift boxes or purchase online-exclusive candies such as chocolate-covered almonds. Beyond Meat, through its Beyond Test Kitchen platform, has tested and launched protein drinks, a product line that has now expanded.
PepsiCo ramped up its DTC efforts during the COVID-19 pandemic, launching two websites, Pantryshop.com and Snacks.com, where consumers can order product combinations including Gatorade, Quaker Oats, Lay's, and Cheetos.
Industry experts point out that in the face of increasingly fierce market competition, DTC enables companies to have more autonomous control over multiple aspects of their online business, especially against the backdrop of inflation putting pressure on sales volume and profit margins, this control is particularly important.
In addition, the DTC channel allows companies to offer a richer product selection and experiment with various innovations that are difficult to achieve when traditional shelf space is limited. By collecting purchase data, companies can gain more precise insights into consumer needs, thereby optimizing customer service, inspiring product ideas, and obtaining immediate feedback.
Since most food companies do not publicly disclose DTC sales data, the overall growth of this channel is difficult to estimate precisely. However, data from retail giant Amazon can provide some reference. According to data provided by Spins and Stackline, in the 52 weeks ending July 12, DTC sales of food and beverages on Amazon's platform totaled nearly $25 billion, up 16.3% from $21.5 billion in the same period last year.
Perfect Snacks, part of snack giant Mondelēz International, is using the DTC channel to sell early-stage innovations and educate consumers about the 21-year-old brand's story and its clean ingredient list. Perfect Snacks CEO Cara Liebrock said: "DTC has always been a strategic channel for us. We have elevated its importance and will continue to invest."
The brand has revamped its website to simplify the shopping process and noted that this platform provides Perfect Snacks with valuable opportunities to communicate directly with consumers and gather feedback. Liebrock added: "We continue to view e-commerce and physical retail as complementary growth channels. We have established a strong presence in physical retail, and now we are shifting more focus online."
However, DTC is not without challenges, which may limit its growth. Many consumers prefer to see or touch product packaging with their own eyes, or to sample products, and these experiences may lead to purchases that would not otherwise occur. In addition, consumers are reluctant to shop across multiple websites, preferring to visit as few shopping platforms as possible.
For some companies that primarily operate online, they also need to weigh whether to invest in their own DTC platforms or rely on third-party platforms such as Amazon. Plant-based creamer, coffee, and snack maker Laird Superfood told analysts earlier this year that its e-commerce channel benefits from a highly loyal repeat customer base. In 2025, e-commerce sales were approximately $25 million, accounting for half of the company's net sales. Nevertheless, a company executive noted that compared with large platforms like Amazon, its own DTC business may still account for only a smaller share.
"We value the core consumers who visit our DTC website to explore and purchase Laird Superfood products, but we do not delude ourselves into thinking that Amazon will not continue to win online sales in the future," Laird CFO Anya Hamill said on an analyst call in March. "Therefore, we will continue to use Amazon as the growth engine for e-commerce sales."
Nico Amaya, former president of Kellanova's North America division, said before leaving in December last year that although the DTC channel is not a major source of revenue, "the other benefits it brings far outweigh its scale and the investment required." This channel enabled Kellanova (later acquired by Mars) to have conversations with consumers about their needs and the products the company can offer. He said: "This allows us, when launching new products, to obtain first trial opportunities from consumers who we know already love our brands, are willing to participate, and can give immediate feedback."