Company aims to be Netflix of snacks

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Posted: Thursday, December 26, 2013 12:00 am

Americans may soon get their snacks the same way they rent movies.

Graze.com, which has been selling personalized, mail-order boxes of snacks in the U.K. for five years, is planning a major U.S. push in January, funded by its majority owner, private-equity firm Carlyle Group. While Graze has barely landed in the U.S., its $70 million of sales in its home market this year already has Big Food’s attention. General Mills is rolling out a service almost identical to Graze’s, right down to the $6 price.

If the idea of a snack subscription, with treats such as Mississippi BBQ Pistachios and Apple Crumble dried fruit and nut mix sent to customers’ mailboxes, sounds like Netflix’s video-rental service, there’s good reason. Some of Graze’s founders came from Netflix’s U.K. equivalent, Lovefilm. The tech developers brought the same model to processed food.

“It’s quite real,” Roger Kay, founder and president of Wayland, Mass.-based Endpoint Technologies Associates, said of the prospects for the emerging category. “There’s definitely room for web-based subscription services, especially in the area of consumables if it’s something you know you are going to want to have every month.”

Graze declined to disclose how much money it has raised or the size of Carlyle’s stake.

To manage its growth initially, Graze requires an invitation code that will be phased out soon. Once in, customers create an online profile, listing preferences and limitations such as allergies.

They can then elect to get boxes once a week, every other week or monthly. The boxes are designed to fit in a mailbox and have four different snacks, chosen from among 90 ever-changing options, in portions ranging from about an ounce to 2 ounces, sealed in plastic tubs.

One snack called the Cheese Board includes cashews, salsa corn sticks and herb crackers covered in an orange powder. The Salt & Vinegar Nut Selection includes almonds and peanuts. The Orange & Ginger flapjacks are a kind of moist granola bar popular in the U.K.

“I’ve watched with interest the wider market in the U.S. on subscription go absolutely bananas,” Graze Chief Executive Officer Anthony Fletcher said in an interview. “This is a source of convenience. You don’t have to worry about it.”

General Mills’ version, called Nibblr, was developed at 301 Inc., a unit in the Minneapolis-based company that incubates products outside core brands such as Cheerios, Yoplait yogurt and Progresso soup. The company is looking for new avenues of growth amid higher costs and shaky consumer demand.

Marketing Director Martin Abrams said his team looked at the subscription market broadly for inspiration. These days, everything from dog treats to razor blades can be purchased by subscription.

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