A candid Q&A from our partners Attest
D2C can be challenging for F&B brands, but DRY have used the pandemic to take non-alcoholic occasion drinks direct into consumers’ homes.
Chief Revenue Officer, Betsy Frost, explains how they’ve ridden the opportunity and overcome barriers to establish a whole new drinks category online.
What’s it been like at DRY over the last year? Is the pandemic and your move to D2C responsible for your upwards growth?
“We’ve been around for 15 years and have a pretty solid retail footprint but we’re really late to the D2C space. That’s because it’s hard to ship liquid across the country in an affordable way. But if you look at the low and no alcohol space, it was really primed for D2C because there’s really no spot in stores for the segment and this idea of alcohol-free sets just doesn’t exist. It’s really hard for consumers to find stuff in stores and retailers are still trying to figure out where it goes. So you have this need that’s growing and taking off but no place to buy it and that’s where D2C comes in. Those two things came in right at the exact same time.
“We did some work with Attest on consumer behaviour and I would say that the pandemic has accelerated the adoption of low and no for us. People got alcohol fatigue and they needed a ritual to move from day to night on a Tuesday but they didn’t want to drink anymore. The pandemic has also made people more apt to stock up online. We never saw that before, particularly in these offerings that are more expensive due to the shipment and weight.”
What drove you to jump on that opportunity with the D2C model?
“We did go into 2020 with a plan to launch a D2C site but really only as a customer service and a learning platform. We did not expect it to be a growth engine but it’s taken off as people are changing the way they buy. They find the convenience of delivery to be worth the price point. For us, it’s also been a new platform to experiment with innovation.”
"We did not expect the D2C site to be a growth engine but it’s taken off as people are changing the way they buy."
What do you think is going to happen to how people shop as we come out of the pandemic? And what trends do you see right now that you’re jumping on?
“We’ve been doing these little pulse surveys throughout the pandemic on shopping behaviour to understand how online is impacting on retail. Pre-pandemic, we had discovery happening online and then stocking up happening in retail. Now what we’re finding is that people are using stores for discovery and using D2C to stock up.
“The other part of the business that truly took off for us was the adoption of Instacart or grocery delivery and I believe 100% that’s going to continue, particularly on the stock-up side as you have your carts saved. It’s been a huge driver for us, especially as an emerging category where people don’t know where to find you in store. Instacart is a great short cut for that because you just type in the category and you can pop right up. That’s helped us improve overall brand penetration.”
What are people searching for on Instacart and how did you make sure that DRY was the most discoverable?
“We’ve been able to buy terms in categories that are adjacent to us. In the store, we sit in ‘specialty soda’, which doesn’t necessarily make a ton of sense but there was no place else to go. We’ve been able to buy terms of ‘non-alcoholic’, ‘mixer’, ‘NA wine’, ‘NA beer’ – anything related to the occasion, and that has helped discovery happen because you don’t have to go to that very narrow set in the store.”
"What we’re finding is that people are using stores for discovery and using D2C to stock up."
How important are marketplaces in your strategy?
“Amazon is a huge part of our business; they’re actually now our third largest customer. It is probably the most essential part of my marketing mix right now. What we’re finding is when people are searching for products they’re more often searching on Amazon than on Google, so you’ve got to be there. There is a bit of a catch 22 situation to working with them; they’re not the most lovely when you have issues and their distribution is hard to work through and it’s expensive.
“Pre-pandemic, Amazon was pretty much a breakeven marketing tool. We realised how important it is for the discovery of the brand but you have to spend to be able to get the advertising and the placement to be discovered. We reset the business model and took a really hard decision to almost double the price to move into Seller Essentials. That has created a self-sustaining investment and accelerated discovery. The amount of money we’re able to put back into the channel is driving over 60% of our new-to-brand customers.”
What factors motivate people to shop with you D2C?
“What we’re finding is that Millennials and Gen Z are visual buyers and so the visual representation of your brand experience is a huge motivating factor. We actually just updated our website earlier this year and our conversion rate has doubled just by upgrading the visual experience.
“The other factors are recommendations and customer reviews – people really do use them. And for us, it’s also about creating impulse reasons or celebration occasions to just say yes. We’re finding that email marketing specific to occasions is driving purchase behavior. For example, encouraging people to stock up for Father’s Day or stock up for Memorial Day. People are starting to think of the low and no space in the same way they do about food allergies – You want to have something special on hand for all your guests.”
"Amazon is driving over 60% of our new-to-brand customers."
What’s the one piece of advice you’d give to brands that are thinking about their D2C strategy this year?
“I would say that it’s really going back to basics. Truly knowing what your brand stands for, what that purpose is and how that authentic story translates to the consumer is at the core. I think sometimes, particularly for a business that’s starting in D2C and hasn’t gone through some of those deep questions, you can get lost. And so it’s about going back to basics to understand the true value proposition and making sure it comes out in a truly authentic way.”