If 2020 and 2021 were the years that food and beverage direct-to-consumer products boomed thanks to the pandemic, 2023 was the year that trend was upended, with DTC brands focusing on retail expansion instead. It seems that’ll be continuing in 2024, with some brands closing their e-commerce platforms entirely.
The experimental fermentation company Acid League announced earlier this month that it’s shutting down its online store, effective January 31, and is ending some of its online-only product lines. That doesn’t mean it’s going out of business: Acid League is directing its resources “to ensure that all of our products are regularly available in retail stores in North America,” noting that producing all of its current offerings, keeping them in stock, and expanding its international retail lines was “totally unsustainable.” As the company has clarified, that change won’t affect orders made through separate sites like Amazon, just its own e-commerce platform.
It’s a big change, especially for an internet-forward brand, but not an unprecedented one. This December, the tahini company Soom also shut down its online store, similarly explaining that shifting away from e-commerce would allow the company to make its products more accessible and available at physical stores.
Grocery stores, once the thing that DTC food brands were getting away from, seem to now be their most promising growth area. While brands like Fly by Jing, Fishwife, Omsom, and Oat Haus first gained their traction online, they’ve all also made inroads in recent years to get shelf space in stores like Whole Foods and Target. Physical stores are necessary for scale, AdAge has reported.
That shift makes sense on multiple levels. As Fly by Jing founder Jing Gao told me last year in a report on new frozen dumpling brands, “being on a shelf is a billboard for your brand.” Just this week, Fly By Jing announced its chile crisps would be newly available at Costcos in the Northeast, and well as nationwide at Albertsons and Safeway stores. A recent market research report found that, save for Gen Z, most shoppers discover new products on store shelves, not online. Speaking as a consumer, I’m certainly more likely to buy one or two products from small brands if I can find them in one place than separate online stores, where I might find that the shipping costs outweigh my interest in testing out something new.
Of course, when a brand handles its own e-commerce, it has to deal with the tricky logistics and costs of order fulfillment. Bigger companies — like the Morinaga & Company-made Hi-Chew, which just launched its own e-commerce platform — might be able to justify that use of resources, but it’s no wonder small, scrappier brands might find themselves pulled in too many different directions, unable to focus on their original goal: making exciting new food products.
According to Acid League, the end of its online store means the company can “focus on more sustainable experimental product development” (emphasis theirs). Good for them, and good for shoppers, too.
