There’s no question that our snacking behavior has transformed the American way of life. Half of all eating occasions are now snack driven. And entire industries have evolved to (try to) meet those needs. Snacking is a big deal and a big business. So as the marketplace for food technology startups soars, it should come as no surprise that there’s been a lot of investor interest in the expanding field of online snack-delivery services.
While companies like graze and NatureBox are among the most well-known (and well-funded) of the bunch, there are dozens of others playing in the same space. Some have cute names, like nibblr and Mouth. And there is even one for dogs called BarkBox. Woof indeed.
Which of these companies will succeed and which will fail is anybody’s guess. It’s also possible that this fledgling category will implode like so many Internet-based businesses and brands did when the dot-com bubble burst in the late 1990s.
But we’re not here to worry about any of that.
Instead, we are tracking a more fascinating development that could foreshadow a sea change in the entire food industry. Most of these online snack-delivery services operate on a subscription basis, with customers receiving regular home deliveries of snack and food products in intervals ranging from weekly to monthly.
Some of these services, like Mouth or Love With Food, seek out unique and interesting packaged food products from boutique, specialty companies and deliver them on a regular schedule. Sort of like a wine of the month club, only for snackers looking for more exotic treats. There’s nothing wrong with these models per se, but they’re missing the mark with how we live and eat. More than half of all eating occasions are snacks. And 80 percent of all snacks are eaten at home.
We need something more than treats; we need something that’s always there as we snack from our kitchen counters, our pantries and refrigerators – and, of course, our desks or cubicles at work. We need a streamlined supply of food, ingredients and combinations of those ingredients to build our customized snack solutions that match our everyday snack routines.
And that’s where companies like NatureBox, graze and nibblr enter the picture.
These services typically provide regular shipments consisting of 5-20 small packages of real food designed to accompany real snacking occasions. There are no conventional packaged food brands to be found. It is simply food carrying the moniker of the company in question. Think of this as private label digital vs. private label retail.
Customers of NatureBox, graze or nibblr can choose from hundreds of combinations of foods and flavors, most offered in single-serve packs, which provide a perfect match for consumers interested in portion control. In terms of specific offerings, all of the usual suspects are there: bars, crisps, chips and dips. And plenty of old-school offerings like granola and trail mix combinations of raw nuts and dried fruits.
But that’s just the beginning. Graze offers several dip selections ranging from sweet to savory and everything in between. Those snacking on indulgent occasions may choose the Chocolate Pretzel (chocolate hazelnut dip with poppy seed pretzels). In the mood for savory? Consider the Thai Sweet Chili Bites (sweet chili sauce with baked wasabi soy bites).
NatureBox offers many granolas, oatmeals and baked snacks. Those may seem pretty pedestrian, but consider the variety of flavor offerings such as chocolate chia granola, blueberry & apple oatmeal, and salt and pepper lentil loops.
Indeed, flavors play an important role here. Customers can choose from dozens and dozens of flavor combinations – some indulgent, some global and some just plain exotic. And this hits on one of the critical differentiating features that give these models a leg up over traditional CPG companies: namely, the ability to quickly innovate and adjust their offerings to meet the increasingly complex flavor profiles consumers enjoy (and demand) as they explore global offerings in unprecedented numbers.
A critic might suggest that there is really not much very new here. Granola, food bars, oatmeal, etc., can be found crowding the shelves of any food retailer. But the differences here, of course, are about variety, portions and flavors. We are not aware of any retailers where one can put together a box with one pack of oatmeal, one serving of pretzels with chocolate dipping sauce and so forth.
And consider this: graze is now branching out beyond traditional snack food formats with aromatic broths like Tom Yum, Pho and Miso. This hints at the possible future expansion of these models into categories like shelf-stable cheeses and meats, which would begin to blur the line between snack-delivery services and other digital startups focusing on home meal preparation kits.
In the case of nibblr, all of this is particularly fascinating because, unlike the other entrants into this space, it happens to be backed by a major CPG food company. Currently, large CPG food companies spend most of their time trying to manage innovation, advertising, promotions, shopper marketing, retail, etc., for a portfolio of brands – some more successful than others.
But nibblr doesn’t have to worry about any of that.
Why manage a collection of packaged food brands when you can manage the relationship between the food and the consumer directly? Freed from such constraints, nibblr can spend most its time developing the most relevant offerings that align with how consumers are living, eating and snacking. And its product development team can respond almost instantly to real-time customer feedback.
This is a model that is nimble and instantly scalable. And it suggests a new way of doing for major CPG companies. If nibblr (or a competitor) succeeds – and that is a big if – it could become one of the most successful food companies in the world. In the case of nibblr, that would be a great coup for its parent CPG company.
Because this will be something more than a branding shop; it will be a food company in the truest sense of the word. How ironic that these new models based on whiz-bang technology could find success delivering food the old-fashioned way: Food as food rather than food as brand.
As leaders in the study of American food culture, The Hartman Group has been tracking how Americans shop for food since the 1990s. From one-stop shopping to multichannel shopping to online markets and click-and-collect, we continue to track consumers’ evolving perceptions, needs, habits and relationships with food retailers. New to the 2017 report is a special section on the expansion of the discount grocery channel, the emerging fresh-format channel and smaller-footprint retail formats.