Calabrese was working on a health and fitness e-commerce platform when he discovered that consumers were having a hard time finding snack options with the right mix of good nutritional value and taste from the plethora of options now available in a range of formats.
“Everyone is jumping on the subscription model. Everyone is jumping on the snack model,” Calabrese tells FoodNavigator-USA. “We tried a bunch of them and found that most of them offer far too many options to the customer, and a lot of those options aren’t all that healthy.”
‘Most people don’t want 1,000 snack options’
Trendwatcher Hartman Group says that roughly half of eating occasions in the U.S. are now snacks or mini meals. But even as what we consider a meal evolves, we are still largely creatures of habit, Calabrese points out.
“People don’t want to have to go through 1,000 options—most people eat the same three things 20 times a week,” he says. “We like variety, but we like controlled variety. For most part, we’re looking for a few specific characteristics and don’t really care beyond that.”
Calabrese founded HealthyCheats in July 2014 as a healthy snack catalog (for purchasing snacks a la carte) and launched the subscription box option in February with about 30 customers. The majority of HealthyCheats’ customers fall into two camps: so-called weekend warriors in search of high-protein snacks for pre- or post-workout occasions, and consumers looking for slightly more nutritious—albeit still tasty—versions of their favorite snacks.
To sign up, consumers first select their preferences from a list of snack characteristics—including paleo, kosher, gluten-free, dairy-free, soy-free, peanut-free and high-protein. Then, they choose the format (such as pasta, muffins, bread, granola, bacon, jerky and nut butters) and flavors (cheddar, BBQ, sea salt, vanilla coconut and sour cream & onion) they prefer. Subscribers get about a dozen servings of pre-selected snacks for $39.99 a month.
“We try to get products that fit in all categories,” Calabrese says. “The sub-selection portion is based more on taste because we want to enable users to customize their snacks without having to select each individual item.”
HealthyCheats sources products at events, samples sent to its offices and by following fitness professionals on social media—“we see what snacks they’re tagging,” Calabrese says. It conducts staff taste tests on every potential item and negotiates with manufacturers to get reasonable prices. Before deciding on Boundless Nutrition’s Perfect Cookie as its high-protein cookie, for example, the team tested some 80 brands and 120 different formulas.
“The greatest products are often the hardest to find,” Calabrese says. “They’re buried somewhere in Iowa or Florida and can’t get any kind of distribution.”
Though Calabrese won’t disclose the number of HealthyCheats customers, he says the bulk of the company’s revenue comes from its catalog, which it also offers at food retailers and through affiliate programs with corporate offices and health and fitness facilities. About two weeks into its first big advertising push in mid-February, the company was contacted for a licensing deal by a top diet company, which Calabrese won’t name.
“We might be moving back to a predominantly catalog format, which the company prefers,” he says.
Snack industry headed for consolidation
When asked what’s next for the snack category, Calabrese likens it to search engines just before Google changed the standard—adding that it’s due for some big changes.
“Before Google, you’d visit a site like Yahoo and see 5,000 different things on the page before you even found the search bar. When Google launched, you knew exactly what you were there to do because there was only one option,” he says. “With snacks, everyone is exploding into it and spending a ton. I think there will be lot of consolidation because the business model isn’t sustainable. You can’t have 20 brands of independent products all around crackers on same shelf.”
He adds that the category also has to contend with the growing number of drug stores, supermarkets and other retailers streamlining their own snack aisles by packing them with store brand versions of healthy, organic and sustainable snacks (think Walgreens’ Nice!, Kroger’s Simple Truth and CVS’ Abound, to name a few).
“Retail stores like Walgreens are increasingly stocking shelves with white-label sustainable, organic, Paleo, grassfed and other such products, so they’re clearly paying attention to where people are spending their money,” he says. “Three to five years down the line, the local points we tend to go when we eat a snack will crush a lot of these online marketplaces because they have so much more access to consumers locally.”
He sees the future of snack consumption as a hybrid of retail and technology serving major metropolitan areas throughout the US.
“We will be a place for high quality foods and snacks to sell directly into the consumer market.”