Snacking subscription service Graze.com has pumped nearly $5m into US expansion - a market that has very, very big potential, CEO says.
The UK-headquartered healthy snacks specialist kick-started operations in the US a couple of weeks ago after extensive beta trials in January 2013.
Graze.com has built a production kitchen and offices in New Jersey and has also developed a logistics system ‘The Brain’ that uses data analysis from the US postal service network to decipher the quickest delivery route to customers.
Anthony Fletcher, CEO of Graze.com, said he had big hopes considering the size of the US market and desire for convenience and health among consumers.
“We’ve invested nearly $5m in the States, and we want a return on that. We’re thinking very, very big,” he told BakeryandSnacks.com.
“This is a market we only think will evolve,” he said.
Balancing mature UK business with US prospects
Graze.com has a well-established UK business that has been in operation for five years. The company offers over 100 snack options and distributes around 300,000 snack boxes per day across the country.
Fletcher said this experience and knowledge means Graze.com can transfer all its learnings over to the US.
“Of course we’re tweaking our position, but Americans, much like the British, are looking for more interesting snacks which are better for them, so the core positioning is therefore the same. But we are adapting to the local market.”
One major hurdle when entering the US was distribution, the CEO said, because the postal system is far larger and more complex with more carriers, different holidays and weather impacts.
‘The Brain’ has been developed to ensure the most reliable delivery system possible, Fletcher said.
Online brings speedy innovation and consumer intimacy
The CEO said the integrated nature of Graze.com was conducive to business and enabled more risk-taking on innovation. He said the business was about the product and service but also the delivery system.
“What I’m quite passionate about is the model – manufacturing yourself and dealing with end consumers directly. The agility and speed of innovation that enables is definitely part of our success,” he said.
“The food values of a nation are very complex, but with this model we can launch a product and get instant consumer feedback… Being online, you have that customer intimacy, learning what works and what doesn’t.”
When developing a new product, Graze.com can push that out to a few thousand subscribers and listen and react to feedback, in some cases immediately discontinuing a snack.
“There are a lot of terms used in business like crowdsourcing, and I definitely see these as an element to our business. We thrive on feedback, whether from data and ratings or direct emails,” Fletcher said.
Taking on General Mills and Nibblr
Snack major General Mills recently launched its similar subscription snacking service Nibblr – developed by an internal team at the company – a move that the Graze.com CEO said was flattering.
Asked if he was worried about the competition from General Mills, Fletcher said: “In the US, the way it’s going at the moment, I’m not worried with the category and we are seeing phenomenal growth.”
When Graze.com launched this month, it had 55,000 subscribers. This figure then increased by 1,000 a day. “All I can say is it’s even better right now,” the CEO said.
He said that while Graze.com is interested in opportunities beyond the US and UK, the focus for the company at the moment would remain on the US expansion.