Anyone buy a CPG company with no direct to consumer?

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May 25, 2025

by a searcher in Seattle, WA, USA

Looking closely at a CPG company that has a relatively commoditized product that they sell through wholesale at solid margins. A component of a growth strategy could be to develop a direct to consumer channel. The brand is likely unknown to most, so I view the social media + paid advertising as essentially starting from scratch. So perhaps more of a long game to diversify instead of short term growth. I’d imagine others in this community have pursued this situation before - would love to learn more about those experiences. Thanks
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Reply by a searcher
from Emory University in Tucson, AZ, USA
As many others in the DTC field will attest, it's increasingly challenging as acquisition costs continue to increase alongside operational expenses. Consider investing in growth for the existing wholesale business. Depending on the category and channel, this may be a blend of increasing your share of the category, bringing new buyers to the category, and increasing/diversifying wholesale outlets. What investments can you make to protect your margin in a commoditized category, typically things like brand marketing, packaging, line extensions, quality improvements, production productivity improvements, etc.
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Reply by a searcher
from Duke University in Chicago, IL, USA
Former CPG Investor Relations. There are a lot of people attempting to build DTC brands in CPG and lots of changes going on with the larger players. A key to extending to DTC is having a solid plan and not assuming you'll be able to get traction with ad spend alone.
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