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Graze has global expansion snack plans

By Rick Pendrous

- Last updated on GMT

Graze plans to start selling products in US stores this summer
Graze plans to start selling products in US stores this summer

Related tags Meal Marketing

Graze, the online healthy snack provider that supplies directly to consumers, is set to launch its range of products in US supermarkets this summer following a similar roll-out in the UK last year.

Speaking at Food Manufacture’s ‘New frontiers in food & drink innovation’ conference in London last week (March 17), Graze supply chain director Tom Carroll announced the snack producer’s global expansion ambitions.

“We do have big aspirations for the business for next three to five years, which will be facilitated by what we do with data,” ​said Carroll at the conference, which was sponsored by Lloyds Bank and legal firm Roythornes Solicitors.

The potential to grow online sales of snacks by subscription in the US, in particular, using its “disruptive technology”,​ is huge, he added. “Now we’ve done the UK, now we’ve done the USA, guess what? France Germany, Austria, the Netherlands, Benelux, Japan, they are all within our sights now.”

Omnichannel approach

Graze, which picked up the Judges’ Star Performer Award in the 2014 Food Manufacture Excellence Awards for its innovative ‘omnichannel’ approach to marketing snacks, uses sophisticated computer data systems to create a dialogue with its online customers. Customers are encouraged to rate the snacks received, which Graze uses to tailor its snack catalogue and target sales at individual preferences.

Omnichannel involves using multiple sales channels – online, via computers and handheld devices, etc, and through traditional store space – to offer what is said to be a seamless purchasing experience for consumers.

“Graze uses innovation to deliver omnichannel and uses data to facilitate that,” ​said Carroll. “We are basically a fully integrated manufacturer and distributor. We compete against FMCG ​[fast moving consumer goods manufacturers] and we are doing ok.”

Set up six years ago, Graze now employs 500 staff in the UK and US and expects to have a turnover of £105M this year, said Carroll. It supplies 500,000 snack boxes each month to customers in the UK and 600,000 in the US, where the business was now profitable, he added.

£10.5M Hayes facility

In the UK, it sources around 200 ingredients from 70 countries around the world, which come into its £10.5M facility at Hayes, west London. “It’s the second largest of its type in Europe and the fifth largest in the world,”​ said Carroll.

Since launching into UK supermarkets last year, store sales had grown to £7M in just seven months and sales are predicted to reach £12M this year, he said. Graze is the number one snack product in WH Smith, he claimed.

Carroll recognised that expanding into supermarkets as well as direct-to-consumers presented some challenges, and some worries. But it had opened up the potential for more cross-selling between different sales channels, he said.

Graze was confident that it would also provide more product feedback that could be used to further develop products, while attracting purchases by customers who might have “got bored”​ with regular online purchases and cancelled their subscriptions but still liked the products and recognised the brand in store.

US range change

Carroll reported that because of the direct feedback it received over the 18 months it had been selling products to consumers in the US, 96% of the original product range no longer existed.

“Once we started to get the data in, we could rearrange the range around what people liked,”​ he said. “In the first year we got to a 34M run rate, which for a UK food business is pretty decent going.

“We were EBIT​ [earnings before interest and tax] positive 17 months into it and washed our face in terms of all the investment we had to make in New Jersey around our facilities. In all, 96% of the range is actually localised.”

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