Graze Good to Go has just been launched, featuring 12 products including pretzel dippers, nuts and flapjacks. The move points to the longevity of physical stores – still valued by online businesses looking to grow.
The company said it had been approached directly by retailers, which were looking to branch out healthy snacking alternative offerings.
The range, which will also be sold by Boots and WHSmith, was inspired by “some of our most popular snacks” according to the company’s retail director, Emma Heal. Prices will range from 99p to £1.49.
The business has seen speedy growth since launching in 2009, delivering cardboard boxes designed to fit through letter boxes, with several healthy snacks including seeds, cakes and nuts directly to customers. In a climate where consumers increasingly expect widening choice and personalisation, Graze catered for that demand early on in an effective way. It let customers tick off what they liked and didn’t like from the array of snacks and algorithms then threw in surprises in future orders to mix it up.
Graze expanded into the US and set up a nationwide service there in late 2013, and had annual sales of £68m for last year.
The company acknowledged it was an interesting step as its founding premise was on providing healthy and appealing nibbles straight to customers, whether at home or in the office. Chief executive Anthony Fletcher said that while it “may seem a contrary move”, customers were telling Graze it would be “more convenient if the product was available in a number of different ways”.
It flags up two interesting points. Firstly, that even in a world increasingly dominated by online and ecommerce, a high street presence is still of value and sought after by newer businesses. Secondly, that retailers are moving in a more health-orientated direction – as the government has been pressuring each to do.
There has been an increasing focus on how food and drink is presented and advertised to consumers – as well as awareness among the general public towards just what is being offered. Research from Dunnhumby last year indicated that food manufacturers and retailers were in a position of responsibility – more than half of the 9,000 individuals surveyed said they felt influenced by manufacturers and retailers to lead a healthier lifestyle. The number of consumers who claimed to spend at least £7 in every £10 on healthy products had risen by 38 per cent since 2009, with Dunnhumby’s global director of customer knowledge, Julian Highley, stating this reflected “healthy eating has clearly climbed the agenda among consumers in the UK and across the globe in the past five years”.
The department of health has been targeting supermarkets and grocery brands to help support proposals among its Responsibility Deal consumer health programme. It pushed for retailers to switch up the “guilt lanes” lining supermarket checkouts – laden with sweets, chocolate and fizzy drinks. Tesco had committed to scrapping such arrangements as part of efforts to help customers make “healthier choices”.
At the time, former CEO Philip Clarke said: “We all know how easy it is to be tempted by sugary snacks at the checkout and we want to help our customers lead healthier lives.”
Lidl has also stopped stocking chocolates in the lead up to checkout services.
Sainsbury’s, meanwhile, has seen “an increased demand” among customers searching for healthier choices. Amy King, the firm’s impulse category planner, said this was “exemplified by strong sales in areas like alternative grains such as freekah and dark leafy products like kale”.
The new range of Graze snacks will be stocked at checkout tills, which King said “fits really well into this trend by bringing a tasty and more permissible snacking offer to our customers”.
It also points to the more prominent role snacking is playing within the food market – the change in lifestyles, with different working days and routines, has prompted a move away from set mealtimes.
As healthy options are becoming an increasing focus of retailers, this is allowing growing businesses like Graze to gain further traction in well-recognised establishments, which bodes well for the firm’s reputation.
The snacking business, which is majority-owned by US asset manager Carlyle Group, said branching out from a pure online business should see it reaching a new range of customers.
“How do you become a national brand? Ships bring you a huge amount of credibility. Many online businesses have to cross a trust threshold,” Fletcher pointed out. Longstanding bricks and mortar stores offer the sense of reliability and familiarity that is difficult to come by among the wave of new businesses.
“I don’t see this as a retrograde step, but as a deep appreciation of multichannel. We were the first to build a food brand online; now we want to sell in shops.”
As Graze comes from an online starting place, the company was armed with “half a billion pieces of customer preference data” across its range of 1,000 products, which enabled it to select the most appealing offering for its retail range. The ability to quickly tap into current trends is shown in the presence of veggie protein power and punchy protein nuts among the products – reflecting the consumer desire for higher-protein products.
A test run in Boots suggested the pre-planning is set to pay off. Heal said Boots Advantage Card data showed that nearly “50 per cent of purchases were made by consumers who hadn’t bought into the Boots category snacking category in the past five months”. Teaming an established online presence and the wealth of data that brings, with the brand value and familiarity of retailers, looks like a nifty move for Graze as it seeks to keep growing in the future.
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