LONDON — The snack subscription service Graze.com is expanding into retail stores in the United States. Graze branded products will be appearing on store shelves over the next two weeks in 3,500 U.S. outlets under such banners as Walgreens, Hannaford, Big Y and Shop Rite.
“This is a model we rolled out in the U.K. a year ago,” said Anthony Fletcher, chief executive officer of Graze, in an interview with Food Business News. “It has been a big hit, and we are looking to bring the same successful multi-channel model to the U.S.”
Graze.com launched on-line in the United States in 2013, and Mr. Fletcher said the company has been collaborating with its subscribers to develop and launch hundreds of new products. Products available on-line consist of combinations of fruits, nuts, seeds, pretzels, confectionery pieces, extruded crackers and bars in a variety of flavors. Products range from apple and cinnamon flapjack bars; “billionaire’s shortbread,” which features almonds, cranberries, vanilla fudge and milk chocolate drops; “booster seeds,” which consists of sunflower seeds, pumpkin seeds and flaxseeds; and “herby bread basket,” which include mini basil breadsticks, oregano rice crackers and garlic crostini.
“Now it’s time to sell the winners in retail stores,” Mr. Fletcher said.
For the retail launch, Graze has curated a line of 17 products that include such varieties as sweet Memphis BBQ, dark chocolate cherry tart and veggie protein. Product development is based on two separate data sources: on-line and in-store, Mr. Fletcher said. He called the on-line data “a bit cleaner” that “you can pick apart more easily,” but said in-store data has its benefits.
“The real benefit is when you combine them,” he said. “For example, after 12 weeks in Sainsbury’s (a U.K.-based retailer), they were stocking 12 s.k.u.s (stock-keeping units), and we recommended they delist four. This was not something they were used to, but we found in our data there were four products not performing. We did want them to replace those four products with four other products, but that decision had to be made by them.”
In the United States, Graze’s data indicate free from is a “massive” trend, Mr. Fletcher said.
“We see a very long tail of personal decisions people are making to exclude some things from their diet,” he said. “A lot of this plays to the increasing importance of personalization. On-line it is easy to deal with, but I don’t see why this can’t feed through to C.P.G. products and address these sorts of needs.”
He uses the example of a consumer who visits a store and starts regularly buying a product without wheat.
“That will show up in the data,” Mr. Fletcher said. “What else can be done with that information? Can you give that person information about other wheat-free products in a store and where to find them?”
The challenge facing anyone bridging on-line and brick and mortar is the cost of failure.
“On-line has a different speed and risk,” Mr. Fletcher said. “You essentially have a model where the cost of failure is zero. But when you roll a new product into retail there is a cost of failure. With the data we are generating, we think we have a new model in consumer goods that doesn’t remove the risk but lets us be more responsive to our customers.”
The focus on being responsive is built into the company’s supply chain. Graze has a manufacturing plant in Jersey City, N.J.
“Our supply chain is designed to cope with the high cadence of product development,” Mr. Fletcher said. “We can launch a product in 24 hours. All of the nutritional and technical information and packaging can be generated and printed in real time.”
He said a strength of Graze is the company was founded by people with backgrounds in technology development, but Mr. Fletcher’s experience is in the food business. He worked for Innocent Drinks, a company that was acquired by the Coca-Cola Co. in 2013.
“When I proposed we build our own plant they didn’t understand,” he said. “But I felt we needed the control so we could develop and release products quicker.”
Next steps for Graze include international expansion on-line.
“Once we understand the consumer then we can expand into additional channels,” Mr. Fletcher said. “We will have one brand in one category around international and then focus on the number of channels we sell through.”