5 High Growth DTC Brands That Are Shaking Up the CPG Space

When the DTC phenomenon exploded, the CPG (Consumer Packaged Goods) was a hot niche: after all, CPG contributed to 10% of US GDP.

During the first wave of DTC, hundreds of brands sprouted up in the CPG space and disrupted the market. The industry behemoths "” Pepsico, Unilever, Mars, etc "” had a harder time with DTC and struggled with issues like unit economics, customer acquisition, retention, and logistics/last mile delivery.

But the disrupters are now getting disrupted by the big boys, and consumers no longer think they are special.

According to the 2022 DTC Consumer Purchase Index report:

• 79% of consumers planned to buy at least once from DTC brands in 2020. This number fell to 69% in 2021.
• The percentage of consumers who bought at least once from DTC brands fell from 70% in 2020 to 60% in 2021.
• Only 17% of consumers thought that DTC brands could give them something traditional retailers couldn't.

However, amidst the chaos, some DTC brands are flourishing.

What's more, they are redefining what CPG DTC growth might look like in a more volatile world where the eCommerce adoption rate is falling from pre- pandemic heights.

Read on to find out how the Davids in the world of CPG DTC are still prevailing over the Goliaths.

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1. Olipop

Sodas have a deserved reputation for being unhealthy and have been blamed for issues like obesity, rotting teeth, asthma, etc.

So when Olipop launched itself as a functional soda, it took a calculated risk.

Because Olipop is essentially a health drink aimed at improving gut health with the same kind of nutritional outcomes as the likes of kombucha.

Each can contains between 2-5 gms of sugar (compared to 30-35 gms of sugar in normal sodas), along with other botanicals.

But the kombucha market is essentially less than $5bn.

However, the soda market is much bigger at $40bn and Olipop calling itself a "functional soda brand"" helped it get into the much bigger soda section in Target, Kroger, Whole Foods, 7-Eleven, Safeway, Wegmans, etc.

And that positioning has worked wonders for Olipop and clicked with customers.

• Founded in 2018, Olipop recorded $35k/month in eCommerce sales in Feb 2020. That number became $1mn+ by Jul 2021 and the brand wants to increase its run rate to $100mn by 2022.
• They are estimated to be present in 8,000-10,000 store locations by end of 2021.
• Most customers buy directly from their website, through email and SMS, but many also buy through Amazon.

Much of this growth is driven by excellent content marketing including earned media (appearance in a Discovery+ documentary or a mobile game).

Olipop features a lot of medical research on gut health, brain function, immunity, etc on its blogs to build credibility around its product.

It hasn't shied away from innovative marketing campaigns, like jumping in on the limited edition sodas released in collaboration with the Minions movie(which sold out soon).

For Olipop, subverting expectations around soda with proven health benefits has been extremely lucrative.

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2. NUGGS (Simulate)

What happens if you apply the principles of software development to creating hyper-realistic alternate chicken nuggets?

You get NUGGS, who unironically call themselves the Tesla of Chicken.

Simulate, the company that started with plant-based chicken nuggets has been one of the stars in the fast-growing plant-based meat market worth $1.4bn in 2021.

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NUGGS often goes viral on social media because of stunts like the flying chicken while a lot of their social media marketing is all dank memes.

While their product packaging is dripping with dark humor, the product page copy is heavily influenced by tech products.

But they gained loyal customers, because the product tasted like real chicken, and not heavily processed goop.