D2C Food Brands Shift to Offline Channels Amid Quick-Commerce Space Crunch
Festive season shelf space constraints push direct-to-consumer brands toward B2B marketplaces and traditional retail.
1Quick-commerce shelf space crisis
With the festive season approaching, quick-commerce platforms are prioritizing established products over new launches due to warehouse space constraints. Dark stores are limiting shelf space for emerging D2C food brands, forcing them to explore alternative distribution channels. Industry experts note this reflects broader market saturation, with too many brands competing for limited inventory slots. The crunch is particularly acute for packaged foods, where quick commerce represents just 1.5-2% of India's total market.
2B2B marketplaces bridge distribution gap
D2C brands are increasingly turning to B2B marketplaces like IndiaMART to access neighborhood stores and supermarkets without building their own distribution networks. These platforms allow retailers to test new products through smaller orders while giving brands wider offline reach. However, experts caution that B2B marketplaces alone can't solve distribution challenges - brands still need sales teams to drive product placement and consumer demand in traditional retail channels.
3Modern trade gains importance
Brands like WellBe Foods are focusing on modern trade and large-format retailers such as Metro Cash Carry, finding better economics than quick commerce where marketing costs are high. General trade accounts for 76% of India's packaged-food sales, compared to 17% for modern trade. Companies are adapting packaging sizes and product mixes to suit different retail formats, with some introducing larger packs specifically for modern trade outlets.
4Festive season channel strategies
Brands are employing different approaches for the festive season - Lal Sweets is launching new products primarily through offline channels while maintaining quick-commerce presence for bestsellers. Khetika conducts joint forecasting with both B2B and B2C platforms to manage inventory across channels. The Healthy Binge reports quick commerce now contributes 70% of its revenue, with delivery frequency to platforms up 50% this season for proven products.
5Regional distribution hubs emerge
To manage festive demand spikes, companies are establishing regional distribution networks. Khetika operates seven plants across India that double as distribution hubs, like its Patna facility serving eastern India. This reduces delivery lead times when demand rises simultaneously across channels. The strategy supports both domestic expansion and international growth, with Khetika already launched in the UK and planning Middle East/Europe entry.
6Corporate gifting trend grows
A new trend emerging this festive season is corporate gifting of healthier snack alternatives to traditional sweets. Both Khetika and The Healthy Binge report growing interest from businesses seeking alternatives to conventional mithai boxes. While still a small revenue contributor, this segment shows potential for premium D2C brands to access bulk orders and build brand awareness through corporate channels.
7Manufacturing cycle accelerates
IndiaMART reports manufacturing activity for festive foods begins ramping up three months before celebrations, with inquiries for food processing and packaging equipment rising first. Bulk stocking by wholesalers and retailers follows 4-6 weeks before festivals. The platform has seen 25-30% increases in categories like Indian sweets and packaging materials, with strong demand emerging from non-metro trade hubs including Surat and Jaipur.
8Strategic implications for D2C brands
The quick-commerce space crunch is forcing D2C food brands to develop more balanced channel strategies. While digital platforms remain important for discovery, offline expansion through B2B marketplaces and modern trade is becoming essential for growth. Successful brands are those that can maintain quick-commerce presence for bestsellers while using traditional retail for assortment expansion and building sustainable distribution networks beyond digital channels.