Around this time last year, just as most of us were tucking into Thanksgiving turkey, the sleepy world of consumer packaged goods was stunned by the news of Procter & Gamble’s $100 million cash acquisition of Native, a venture-backed natural deodorant company based in San Francisco. Why was the company that gave the world such iconic brands as Ivory soap and Scope mouthwash interested in a tiny armpit of a startup whose claim to fame was a pumpkin spice SKU and a slogan that beseeched users to “take care of your body, it’s the only place you have to live”?
The answer, of course, was the stunningly rapid rise of DTC: the direct-to-consumer brand revolution, an army of 21st-century David-like underdogs whose sole purpose was to slay a shelf’s worth of increasingly irrelevant packaged-good Goliaths. No long-standing brand was immune to it, and decades — in some instances, centuries — of margin and market share were crumbling at the expense of these comers. Warby Parker blackened the eye of Sunglass Hut; Harry’s and Dollar Shave Club gutted Gillette; Glossier was leaving L’Oréal red-faced. The disruptive unicorn list went on and on and on. Indeed, according to the highly respected boutique investment bank Luma, there are now more than 400 DTC brands, with some 45 newbies attacking P&G alone. Which is likely why the incumbent concluded it was better to buy Native than let it become a threat. “There’s a competitor for everything,” says Terry Kawaja, CEO of Luma. “For legacy brands, this should be terrifying.”