Your Food Brand Belongs Online—But Where?

If e-commerce wasn’t a priority for food brands before, COVID-19 has certainly made it one. Online food buying had been slower to take off than other e-commerce categories, but the pandemic has given it a serious jolt. According to the New York Times, more than one-third of Americans ordered groceries online for the first time ever last month, and each successive week of this crisis, consumers have spent more money on food online.

Shoppers are still buying from behemoths Amazon and Walmart. But Target, Kroger, Costco, and Instacart are stealing market share fast. There has also been a sharp uptick in food purchases direct from manufacturers and farmers via the internet. Many small brands’ e-commerce sales have blown up, and CSA memberships have risen.

Since there’s no clear end date for the virus threat, stay-at-home orders, or vacant retail shelves, the question for most food brands isn’t if they should sell online—it’s how. Whether starting a business from scratch or pivoting an existing company toward ecommerce, a big part of that strategy is figuring where online to focus.

There are countless platforms: Amazon, eBay, Thrive Market, Instacart, Etsy, Hubba, Boxed, the list goes on—and don’t forgot companies’ own e-commerce websites. Food businesses must also think about where to promote their brand to ensure they are reaching the right audience.

As Tera and Rally Energy founder Matthew Starr discuss in the latest Edible-Alpha® podcast, food entrepreneurs often think they’ll do most of their online business via their own website, but it rarely pans out that way. Even so, it’s crucial to create a polished brand website because that’s where businesses have the most control over their messaging and image. If they can make sales there too, bonus, but know that shoppers often peruse manufacturers’ websites, decide what to buy, then ultimately purchase their products on Amazon.

Although some entrepreneurs hesitate to play the Amazon game, the fact is that’s where a huge percentage of food transactions occur. Therefore, boycotting Bezos means saying no to a significant sales opportunity, something most food businesses can’t afford to do—especially now. Also, if your competitors are on Amazon but you’re not, you’re just giving customers away for free. Without needing to work for those sales, the competitor save margin, free money they can use to choke you in other channels. At the end of the day, even with very little marketing, just having a presence on Amazon will be immensely beneficial.

But again, Amazon isn’t the only game in town. Which other platforms should a food business pursue for sales and promotion? Here is where entrepreneurs, especially those just starting out, need to do some serious digging online. Find out what your potential core consumers are talking about in relation to your category—what truly matters to them—and notice where on the internet they are talking. Immerse yourself in these conversations, ask questions, learn their needs and desires, and observe how they communicate. All of this is invaluable R&D that’ll help food brands find the most fitting homes online.

And now, our roundup of the best food and beverage finance news, events, and resources from around the web…

Consultant With TabletBusiness Model Insights

Raising CapitalRaising Capital

National Wholesale BrandsCPG/National Brands

Grocery Store Produce Section Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

COVID-19-Related Resources for Food and Ag Businesses