Plant-based food maker Alpha Foods launches DTC platform10 Nov 2020
California-based Alpha Foods launched its direct-to-consumer (DTC) platform in the U.S. to take advantage of the growing market for plant-based and e-commerce delivery options. The company's products will also continue to be sold at brick and mortar retailers.
The new DTC platform will be specially modified to transport the company’s frozen product portfolio to cater to the 76% of Americans that are shopping online per an NPR/Marist poll conducted this past spring.
This plant-based frozen food company has grown rapidly. Thanks to the simultaneously growing demand for convenient, healthy affordable foods and options that are plant-based, the California-based company was in a prime situation to capitalize on this demand with its product portfolio. In the last two years, the young company secured $35 million in funding, and it has expanded its portfolio from four products to now 25 different options available in nearly 10,000 stores across the U.S.
Plant-based food is a segment that has grown steadily over the last decade, but its popularity exploded in recent years and was further accelerated by the pandemic. SPINS data from April showed that plant-based product sales grew 35% faster than the food category in general. Alpha caters directly to this market with its offerings like vegan pot pies and meatless burritos.
The company’s portfolio is also geared toward convenience by taking advantage of frozen formats that have seen a resurgence of acceptance among consumers. Bloomberg reported that 2018 marked the first year since 2013 that frozen food sales were up and that trend has continued to increase. In March, frozen food sales spiked 70% as consumers looked for options that were shelf-stable and could be stockpiled. Although the frantic shopping behavior has subsided, a survey from the American Frozen Food Institute found that half of those who purchased frozen foods since March plan to purchase a lot more (18%) or somewhat more (32%) going forward.
Alpha Foods is ideally positioned to not only capture the increasing demand for frozen, plant-based options but to also take advantage of changing consumer shopping habits. The young company is flush with capital and said in February that it planned to use these funds to expand its distribution domestically and internationally. After the onset of the coronavirus, the company pivoted and is now relying on the DTC model that has become increasingly sought-after in recent months.
Beyond Meat and Impossible Foods are two other companies that have also launched their own DTC platforms – these companies just happen to be the megalithic plant-based titans that have repeatedly set the trends for the industry.
This shift in distribution from retailers to consumers directly is worth watching for manufacturers. DTC channels offer companies more autonomy to control their supply chains and are not beholden to distribution schedules and shelf placement dictated by supermarket chains. Plus, this model removes the middle man, which potentially offers the ability to sell products to the consumer at a cheaper rate while still maintaining profit margins for the company. At the same time, this model relies on consumers coming directly to a company’s website to seek out its branded products, something which may mean that marketing and advertising may need to adapt in order to push customers that are used to shopping among a myriad of products to become more brand loyal.
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