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Emerging CPG Brands Rethink Direct-to-Consumer Model, Embrace Wholesale

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ConsumerGeniuses

Direct-to-consumer (DTC) business models have been popular among emerging CPG brands, with companies like Warby Parker and Bonobos receiving millions of dollars in funding.However, this model has now been applied to low-margin food and difficult-to-ship beverages, leading founders to question the viability of a DTC-only brand. One such company is plant care brand Arber, which launched in 2021 and has raised $3.5 million in funding to support retail rollouts and an Amazon launch. Arber’s current revenue split is 90% from wholesale and 10% from its DTC website, with the majority of revenue expected to come from wholesale. Arber sells chemical-free plant food and insecticide and has plans to add soil food in the near future. The company chose to prioritize wholesale over DTC as the majority of garden and lawn products are still purchased in brick-and-mortar stores, and the rising costs of customer acquisition from digital ads.

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