Shakeup in snack subscription service category

by Eric Schroeder
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Graze.com, an on-line retailer offering a range of snacks its executives deem to be healthy, such as nuts, fruits and seeds, launched in the United States in late 2013.

MINNEAPOLIS — Retailers ringing the doorbell on snack subscription services have experienced a range of results since the sales strategy took off a few years ago. For example, check out the differences between graze.com and General Mills, Inc.

Graze.com, an on-line retailer offering a range of snacks its executives deem to be healthy, such as nuts, fruits and seeds, launched in the United States in late 2013. In a June 9 trading update, the London-based company said it now has a U.S. sales run rate of about $35 million per year, and its U.S. business is profitable and set to scale further.

The company said it is opening and building out its New York office, and has continued to innovate with the launch of new products, including protein boxes and Asian broths.

“Following one of the most successful launches of a British food brand into the U.S., this territory is after just one year contributing significantly to group revenues,” said Anthony Fletcher, chief executive officer of graze.com. “Its success has been driven by our unique product and direct to consumer proposition, allowing us to quickly localize the offer at minimal cost. This exciting customer proposition is underpinned by our vertically integrated model, proprietary technology platform and thorough understanding of the delivery mechanism.”

Mr. Fletcher said graze.com plans to accelerate the pace of innovation through continued evolution of the customer proposition to further expand the market opportunity in the United Kingdom and the United States.

“With strong momentum in the business and a pipeline of game-changing innovations we continue to progress toward our vision of becoming the world’s No. 1 healthy snack brand,” he said.

General Mills’ snack subscription service, nibblr, has come to an end.

On the flip side of the coin, Minneapolis-based General Mills’ snack subscription service, nibblr, has come to an end. The company began shipping a box containing four portion-controlled snacks by mail for $5.99 in January 2014, but this past week opted to end the service.

“Thank you for being a part of the nibblr community,” General Mills said on its nibblr web site. “We’ve truly enjoyed shipping you crave-worthy snacks week after week. Unfortunately, we have decided to close the service.”

As General Mills steps aside, rumors have circulated that another major U.S.-based snacks company will attempt to compete with graze.com — Kellogg Co. Although the Battle Creek, Mich.-based company has not officially commented on a potential move into the subscription snack market, sources have told Bloomberg that Kellogg has assembled a team and invested capital to create a direct-to-consumer food business.

“We’re always looking for new ways to reach our consumers — whether it’s through our foods, programs, promotions or other activities,” Kris Charles, a spokeswoman for Kellogg, said in an e-mailed statement. “We’re exploring new opportunities in many areas of our business, but it’s premature to discuss any details at this time.”
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