The Importance of E-Commerce in the Food & Beverage Industry

Today, we explore a business trend that has been on the rise year after year and even more so during the pandemic months. We’re talking about E-commerce and why it's such an important part of any F&B business model today.  

Purchasing food and beverage products online has become a common practice, especially among the younger generation. E-commerce sales have been rising yearly and during Covid-19 more consumers began shopping online in greater numbers and frequency. According to eMarketer's 2019 data, grocery E-commerce is projected to grow 18% this year in the U.S. alone. Grocery E-commerce will rank as the fastest-growing product category online. Even before the pandemic, online grocery shopping was on the rise but the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. 

Another trend that we can’t ignore is direct-to-consumer (DTC) E-commerce. Americans are now increasingly buying products directly from the websites of manufacturers. This creates an opportunity for brands to boost sales and consumer loyalty. Adding a DTC E-commerce component might not be easy but can be highly beneficial for brands. This will help brands reach customers who would not have otherwise have access to their products. Selling direct is a cost-effective way to create an online shopping experience. Some of the challenges of DTC are scaling the growth of the online store and finding ways to reach new shoppers. Major brands, like PepsiCo, Nestle, and Kraft Heinz have recently launched DTC websites. As this DTC trend evolves, brands will need to embrace this new way of selling, while still maintaining relationships with retailers in order to appeal to all kinds of shoppers. 

Will E-commerce continue to trend moving into the future?

While the threat of Covid-19 will eventually decrease, it’s very likely that interest in E-commerce will continue. It is crucial now for companies to start their online strategy and stay ahead of their competitors. E-commerce presents enormous opportunities for any startups or established brands exploring online retail.

The two biggest challenges for brands in E-commerce are pricing and profitability. In addition, companies also have to adapt to their supply chain to meet the needs. In order to address these challenges, brands need to invest in a dedicated E-commerce pricing strategy. In addition, it’s important for brands to have a team and a set of processes to handle E-commerce orders.

Here are our tips on how to build a successful E-commerce platform:

• Include DTC purchase tools on your website: even though you can sell through Amazon or other online retailers, it is important to have a business site that serves as a marketing and branding tool.
• Have great visuals: invest in flattering pictures of your products.
• Have an efficient fulfillment system: you need to ensure your products get to consumers seamlessly.
• Distinguish yourself: ask yourself what makes you stand out from your competitors and expand on those unique elements of your business.

This #MemberInsights article was authored by FACC Member, Mike Arresta, Managing Director at Impact Business Development. If you are looking to build or revamp your E-Commerce platform or sell DTC, Mike and his team are here to help you! Contact them at info@ibdcllc.com or connect with Mike on LinkedIn to start the conversation!