Tahlequah Daily Press

Get the scoop!

December 20, 2013

Graze fights General Mills to become the Netflix of snacks

ATLANTA — 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 Britain for five years, plans 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, 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 Inc.'s video-rental service, there's good reason. Some of Graze's founders came from Netflix's British equivalent, Lovefilm. The tech developers brought the same model to processed food, tapping into demand for healthier snacks.

"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, which has about 350 employees globally, declined to disclose how much money it has raised or the size of Carlyle's stake. Other investors include Octopus Investments Ltd. and DFJ Esprit LLP, both in London.

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 Britain.

"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. General Mills earlier this week posted second-quarter profit that trailed analysts' estimates because of higher ingredient expenses and foreign-currency exchange rate fluctuations.

Marketing Director Martin Abrams says his team looked at the subscription market broadly for inspiration. These days, everything from dog treats to razor blades can be purchased by subscription. Similar services have sprung up that send consumers assortments of new products in areas they're interested in, such as Birchbox for beauty products, Glossybox for cosmetics and Shoedazzle for footwear.

Graze's low price will be attractive to consumers as the company grows, said Kay, a technology industry analyst who consults on brand strategies. Graze then can add more premium offerings with higher profit margins or raise prices once it establishes a loyal U.S. customer base.

General Mills took Nibblr national in November and has spread word by mostly social media. Others in the market include NatureBox.com, which ships snack bags once a month for $19.95 and smaller companies offering boxes for vegans or fitness buffs.

Fletcher says the larger competitor's offering looks "heavily inspired" by his company's product, an assertion General Mills' Abrams dismissed.

Graze started with national distribution from London five years ago and now ships 300,000 boxes a week in the U.K. The company began testing in the U.S. early this year and an all-out push starts in January, when consumers make New Year's resolutions.

The company's single plant and shipping center in Jersey City, New Jersey, can reach 250 million addresses using the U.S. Postal Service and FedEx Corp. The company has about 55,000 U.S. customers and is adding 1,000 a day.

At its heart, Graze is a data and technology company, Fletcher said. The company analyzes customers' preferences, 15,000 new ratings per hour, stocking levels and a host of other data using DARWIN, which stands for "Decision Algorithm Rating What Ingredient's Next."

Graze's $6-a-box price includes shipping, made possible in part by a database it calls "the brain." The company uses it to determine whether a certain address would be better served by the USPS or FedEx, down to a particular day of the week.

General Mills' Nibblr boxes are similar to Graze's, using the same four plastic tubs. Customers get the same delivery intervals, as well. Like Graze, Nibblr gives customers control to change, suspend or cancel delivery online any time.

Unlike Graze, whose box is made of earthy brown cardboard, Nibblr decorated its box to look like a gift -- for oneself or someone else, Abrams said. Nibblr targets women looking for snack options at work, he said.

Nibblr's Snacks include Apple of My Pie with cinnamon praline almonds, apple-pie spiced cookies and dried apples. Ale House Blend incorporates corn nuts, Brazilian Steakhouse Peanuts and Mini Pretzels. Nibblr's tagline: "Discover something delightful." Graze's soon-to-be pitch: "Snacking reinvented."

 

1
Text Only
Get the scoop!
  • Doctors to rate cost effectiveness of expensive cancer drugs

    The world's largest organization of cancer doctors plans to rate the cost effectiveness of expensive oncology drugs, and will urge physicians to use the ratings to discuss the costs with their patients.

    April 16, 2014

  • To sleep well, you may need to adjust what you eat and when

    Sleep.  Oh, to sleep.  A good night's sleep is often a struggle for more than half of American adults.  And for occasional insomnia, there are good reasons to avoid using medications, whether over-the-counter or prescription.

    April 16, 2014

  • Low blood-sugar levels make for grousing spouses

    Husbands and wives reported being most unhappy with their spouses when their blood-sugar levels were lowest, usually at night, according to research released this week in the Proceedings of the National Academy of Sciences. Missing a meal, dieting or just being hungry may be the reason, researchers said.

    April 16, 2014

  • treadmill-very-fast.jpg Tax deduction for a gym membership?

    April marks another tax season when millions of Americans will deduct expenses related to home ownership, children and education from their annual tax bill. These deductions exist because of their perceived value to society; they encourage behaviors that keep the wheels of the economy turning. So why shouldn't the tax code be revised to reward preventive health?

    April 15, 2014 1 Photo

  • Victimized by the 'marriage penalty'

    In a few short months, I'll pass the milestone that every little girl dreams of: the day she swears - before family and God, in sickness and in health, all in the name of love - that she's willing to pay a much higher tax rate.

    April 15, 2014

  • Allergies are the real midlife crisis

    One of the biggest mysteries is why the disease comes and goes, and then comes and goes again. People tend to experience intense allergies between the ages of 5 and 16, then get a couple of decades off before the symptoms return in the 30s, only to diminish around retirement age.

    April 15, 2014

  • E-Cigarettes target youth with festivals, lawmakers say

    The findings, in a survey released Monday by members of Congress, should prod U.S. regulators to curb the industry, the lawmakers said. While e-cigarettes currently are unregulated, the Food and Drug Administration is working on a plan that would extend its tobacco oversight to the products.

    April 14, 2014

  • Search teams will send unmanned sub to look for missing Malaysian airliner

    Teams searching for a missing Malaysian airliner are planning for the first time to send an unmanned submarine into the depths of the Indian Ocean to look for wreckage, an Australian official leading the multi-nation search said Monday.

    April 14, 2014

  • Why Facebook is getting into the banking game

    Who would want to use Facebook as a bank? That's the question that immediately arises from news that the social network intends to get into the electronic money business.

    April 14, 2014

  • Cherokee Nation launches online art database

    Cherokee Nation officials have launched a new website providing the public access to information regarding art owned by the tribe and its businesses.
    “We have hundreds of traditional and modern works of art in our collection across the Cherokee Nation’s governmental and businesses facilities,” said Cherokee Nation Principal Chief Bill John Baker. “This expanded database is a significant accomplishment and now makes our art collection more accessible for various audiences, including artists, enthusiasts and tribal citizens.”

    April 14, 2014

  • mfp file Hoffner Fired coach unjustly accused of visiting porn sites

    The president of Minnesota State University-Mankato accused a football coach of looking at Internet porn on a work computer before firing him, an arbitrator has revealed. The official said the claim could not be supported, and the coach shouldn't have been fired.

    April 11, 2014 1 Photo

  • Stepping forward: The real Colbert

    Letterman changed the late-night TV game between his run on NBC's "Late Night" and starting the "Late Show" franchise in 1993. And while it's tough to replace a pop-culture icon, Colbert, in terms of pedigree and sense of humor, makes the most sense.

    April 11, 2014

  • Millions of Android phones, tablets vulnerable to Heartbleed bug

    Millions of smartphones and tablets running Google's Android operating system have the Heartbleed software bug, in a sign of how broadly the flaw extends beyond the Web and into consumer devices.

    April 11, 2014

  • taylor.armerding.jpg Obama's equal pay exaggeration leads us all into danger

    The president's claims of national shame over gender-based pay inequity spring from distorted calculations, as well as some convenient political math.

    April 11, 2014 1 Photo

  • mfp file Hoffner Big win for college coach wrongly accused of child porn

    The ex-coach of Minnesota State University-Mankato - cleared on child porn charges - gets his old job back or could take the difference in pay should he decide to stay in a new position in North Dakota, an arbitrator has ruled. Todd Hoffner was accused when a technician found videos of his young children on his school-issued cellphone. Officials in Mankato fired him even though a judge had thrown out the charges.

    April 11, 2014 1 Photo

Poll

What to you think of a state Legislature proposal to forbid cities from raising the minimum wage? Choose the closest to your opinion.

The federal government should set the minimum wage across the board.
States should be allowed to raise their minimum wages, but not cities.
Both states and cities should be allowed to raise their minimum wages.
Cities should be allowed to raise their mimum wages, but not states.
There should be no minimum wage at all.
Undecided.
     View Results
Tahlequah Daily Press Twitter
Follow us on twitter
AP Video
Obama Hopeful on Ukraine, Will Watch Russians Flamingo Frenzy Ahead of Zoo Construction Crew Criticized Over Handling of Ferry Disaster Agreement Reached to Calm Ukraine Tensions Raw: Pope Francis Performs Pre-easter Ritual Raw: Bulgarian Monastery Dyes 5000 Easter Eggs Diplomats Reach Deal to Ease Tensions in Ukraine U.S. Sending Nonlethal Aid to Ukraine Military Holder: Americans Stand With KC Mourners Obama Greets Wounded Warriors Malaysia Plane: Ocean Floor Images 'Very Clear' Sparks Fly With Derulo and Jordin on New Album Franco Leads Star-studded Broadway Cast Raw: Two Lucky Kids Get Ride in Popemobile Boston Bombing Survivors One Year Later Sister of Slain MIT Officer Reflects on Bombing
Stocks