How can you create a direct-to-consumer business model in the food and beverage industry?

As a startup, your goal is to make a consumer's life better. So highly critical to understand who are you solving for. For eg, a consumer in rural India or Tier 3 cities, may be thrilled to hear a McDonald's opening up in their neighbourhood while a consumer across Metros is looking for restaurants serving gourmet burgers rather than the mass-produced burgers offered by McDonald's and how incrementally value additive your product is over the next best alternative available to them. So assess whom you are solving for, how critical the problem is in their life, and their propensity to pay for such a product.

D2C is a marketing play. Majorly the products are already out there, but the use case of such products have just not been communicated. One such category is FoxNuts, 10 years back was a broadly unbranded space, but then came these new age D2C brands who just created a strong narrative around their benefits, and positioned them as a healthy snacking alternative, pricing them 3x-4x price of the incumbent snacking alternatives. So, extensively use the social media handles or any available canvas to narrate the story to the end consumer, because, in the end, a D2C brand with a better story narrative is more likely to win. D2C as a model allows the entrepreneur to take a product-led approach and target a niche before scaling to new categories.

Customer acquisition cost, caused by the high cost of discovery and low conversion, is the major impediment to the business model's viability. I suggest taking an aggregator-first omnichannel approach. Marketplaces such as Amazon have already built a captive audience and trust amongst consumers, so leverage it initially for conversion and acquisition, while social media is for discovery. Also, if capital allows, try to leverage the popups in outdoor events for brand awareness, discovery and storytelling. Initially as you move from product to brand, effectively leverage your own D2C website for margin expansion and story telling, and gradually venture into departmental stores and modern trade.

Creating a positive image of the business brand among customers can be achieved by designing different ways of delivering orders and taking into account a variety of customer preferences. In addition to that, optimizing shipping costs and timely delivery of orders have always been among the primary requirements from the point of view of customers.