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Two Experts Disagree Over Large CPGs’ Prospects In DTC

October 26, 2018: 12:00 AM EST
A talk by Terence Kawaja, founder of Luma Partners, an investment banking firm, and an interview with Marc Pritchard of Procter & Gamble, provided some interesting insight to the way in which new direct-to-consumer brands are taking market share from established CPGs. Kawaja sees the trend continuing, fueled as more new companies emerge funded by “rampant venture funding”. Pritchard believes that the large CPGs are countering the threat: P&G, for example, is experimenting with brands at seed-stage and has brought the direct-to-consumer startup approach to some of its brands. Kawaja is not convinced that companies like P&G can succeed with DTC brands, saying "Think about a middle-aged white man trying to dance," adding that venture funds are supporting DTC startups because of their similarity to tech companies, which P&G is trying to emulate, according to Pritchard. Kawaja called P&G’s Gillette DTC business "a copycat business model that screams inauthenticity." [Image Credit: © LUMA Partners LLC]
Jack Neff, "P&G's Pritchard at the ANA confab on how to combat the direct-to-consumer threat", Advertising Age, October 26, 2018, © Crain Communications
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