After five years in the U.K., private equity-backed Graze.com has invested $5 million to launch in the U.S. Founded by ex-Lovefilm executives (the U.K. equivalent of Netflix), Graze is a subscription-based snack service.
Graze.com customers select four items from over one hundred options and wait for home delivery. They choose whether to take delivery once each week, fortnight or month. Selections and intervals can change at will. Online profiles reflect ratings, likes, dislikes and even allergies. New products are tested by several thousand subscribers, often dropped immediately if not popular.
Graze.com's boxes fit into a mailbox and contain one- to two-ounce portions of each snack in separate tubs. Healthy choices are easy to make. Americanized options include Mississippi BBQ Pistachios and Apple Crumble dried fruit and nut mix, while the Cheese Board is comprised of cashews, salsa corn sticks and herb crackers covered in an orange powder. The Salt & Vinegar Nut Selection includes almonds and peanuts.
Having signed up 55,000 customers pre-launch, Graze claims to have added 1,000 a day after that. CEO Anthony Fletcher added, "All I can say is it's even better right now" when interviewed by BakeryandSnacks.com just weeks later. "We're thinking very, very big."
In the U.K., approximately 300,000 snack boxes are delivered each day. Addressing the different postal options in the U.S., Graze has created logistics system, "The Brain," using data analysis from the postal service to decide whether USPS or Fedex would be most efficient to reach any one of 250 million given addresses on a given day from its Jersey City distribution center. At $6, including shipping, Mr. Fletcher insists Graze must "ensure the most reliable delivery system possible".
General Mills launched a competing subscription snack service, Nibblr, before Graze went live. Promoted through social media, choices include Apple of My Pie with cinnamon praline almonds, apple-pie spiced cookies and dried apples. Ale House Blend incorporates corn nuts, Brazilian Steakhouse Peanuts and Mini Pretzels.
Bloomberg reports Nibblr's internal box design, price, delivery intervals and customer options for controlling content and deliveries reflect Graze's. Nibblr's box, however, looks like a gift, leading Supermarket Guru Phil Lempert to surmise Millennial Women are being targeted. General Mills' marketing director describes their audience as "women looking for snack options at work."
How likely is it that subscription services for snack foods will succeed?