While we mostly focus on long-term trends and technologies, another part of the AgriFoodTech ecosystem has a much more immediate and disruptive impact: brands. Unlike most of the innovation ecosystem, where funding is declining due to the combined absence of profitable growth and exits, DTC brands are thriving. That’s even more remarkable, as incumbent leaders are faced with increasing pressures from consumers, private label, and their own investors. In a word, emerging DTC brands are among the main drivers of growth. As we expect this trend to continue and acquisitions to increase, I wanted to take a look at the root causes of this shift and DigitalFoodLab’s DTC acquisition framework.

1 – the new DTC playbook

There is a lot of confusion when we talk about DTC (Direct-To-Consumer) brands, often because many of them emerged as pure online models and many failed when they tried to scale in the “real world” of retail. Here are the current three different types of models, which are also three answers to false assumptions:

• Pure DTC/online models do work and can scale, as long as they are not dependent on paid acquisitions: brands like AG1 (NZ, supplements) do exist uniquely online and thrive (AG1 had revenues over half a billion in 2025). This model can’t be expanded to most F&B categories (due to logistics and margin constraints), but it can deliver real value.
• Retail-first brands: nowadays, most emerging brands are launched directly in retail stores and don’t promote online sales as much as FMCG players. They are most successful in stores when they can draw attention to an otherwise stale category, especially by attracting new consumer segments.
• Omnichannel brands that have successfully moved from online to offline distribution: players like Huel or Yfood (both meal-replacement companies) were initially created as pure online players, but with retail in mind from the beginning.

While initially most of the emerging brands were embodied by their founders, this “trend” has shifted towards celebrity investment and endorsement, such as David Beckham for IM8, or Cristiano Ronaldo for Bioniq (personalised supplements).

2 – Food and beverage brands are doing much better than the rest of the innovation ecosystem

Emerging food and beverage brands are among the few segments which are thriving. DTC brands are doing well on three fronts:

• Funding: while the rest of the innovation ecosystem is doing quite poorly, brands are still raising quite significant amounts of money. For sub-segments like beverages, this is even increasing year over year.
• Scale and profitable growth: unlike most startups, brands generally operate profitably (outside of expenditures related to scale-up and marketing efforts).
• Acquisitions: looking at a chart of AgriFoodTech acquisitions over the past years is basically looking at a list of brands getting acquired by large CPG companies.

3 – FMCG leaders under increasing pressure to shake up things

What’s even more interesting is that this rise of DTC food and beverage brands is happening in an otherwise depressed food and beverage environment:

• Deceptive sales and investor returns for large F&B companies, which are not doing well in terms of sales: 2025 volume growth for the global CPG leaders was mostly between 0 and 2%, with similar expectations for 2026. This leads to investors’ dissatisfaction, especially when compared with the rest of the market.
• Many large brands are challenged: this stagnation or decline in sales can be seen in a number of “former star brands” now struggling.
• Investors are pressuring companies to find solutions: finally, these poor results have been spotted by investors, who are putting ever-increasing pressure on management teams to deliver better results. Most FMCG companies have indeed delivered very poor results to their investors (-34% in three years for Nestlé compared to almost +40% for a global stock market benchmark).

4 – Emerging brands are “stealing” billions from FMCG leaders

If FMCG leaders are suffering, it’s obviously due to a mix of structural and contextual reasons (including the rise of GLP-1 drugs and inflationary pressures), but it’s also because they see their market shares being raided by private labels and emerging brands:

• In the categories most associated with ultra processing, we observe a strong decline in sales of major brands… compensated by emerging and smaller brands.
• In the meantime, many of these emerging brands are delivering strong growth and moving out of the “tiny player” box to become quite massive in their respective markets. Examples include Chomps (beef jerky snacks), Olipop (healthy fizzy beverage) or Liquid Death (water), all in categories that weren’t considered easy targets for innovators.
• There are many reasons these brands are succeeding, but they often include four factors: excellent operations, agility (most have pivoted at least once), a combination of healthy claims with indulgence, generational alignment (some are targeting millennials, other more Gen Z-focused), and simply put, “not being the incumbent”.

5 – DigitalFoodLab framework to avoid M&A failures

FMCG will have to evolve fast, and looking internally won’t be enough. With so many emerging brands popping up and stealing market shares, we can expect an increasing number of acquisitions. However, many past examples have not been so successful. DigitalFoodLab’s DTC acquisition framework includes having strong answers to the six following questions:

• What is our legitimacy in this category?
• Can we integrate this company?
• Has it been validated internationally?
• Does it work in retail stores?
• Is it the right time to buy it (Could it be too soon, or too late to internationalise it?)
• Do we have a clear plan to support and grow the brand, and what is the plan with the management?

Also, a good look at recent failures could give some hints about what “not to do”: success is hard to replicate, but you can be sure that the causes of a failure once will strike again.

6 – So many brands to put on your radar

As explained above, the DTC space is thriving, with a high level of funding and a good number of brands which are growing fast.

There are brands emerging in most categories. FMCG and ingredient companies, and independently of their immediate M&A strategies, should have a radar for emerging brands in their own and adjacent segments, even if only for inspiration.

In a word, as we have seen, the next couple of years will be fascinating as:

• FMCG companies are under increasing pressure to evolve; this pressure will only grow as investors become impatient with current sales growth. Part of the change can come from internal evolution (ingredient list, refocus on marketing efforts), but it will require portfolio movements that go beyond the current wave of large mergers and divestments.
• DTC food and beverage brands are stealing billions in revenue from FMCG leaders, and many of these companies are now ripe for an acquisition.
• In a context where valuations are much more reasonable than a few years ago, and by leveraging the right framework, FMCG companies can return to growth through acquisitions.

Contact us if you want to discuss these insights and access the slides.