The US is widely regarded as a food and beverage haven, with the agriculture and food sector contributing $992 billion to the nation’s GDP, and employing 21 million people in full and part-time jobs. For consumers, food accounts for 12.5 per cent of American households’ expenditures, so it’s not surprising that the world’s F&B entrepreneurs often view the US as the end-goal for expansion.
For UK healthy snack company graze, the way in and the strategy for growth were contingent on the company’s technological capabilities and eye for branding. The technology-led multichannel retailer was one of the early pioneers of the subscription model in the snacking industry and combined its data expertise with healthy food innovation to create healthy grab-and-go snacks to rival less-optimal choices, from candy bars to salty snacks, that line every checkout aisle in stores across the UK and the US.
“Healthy snacking represents a £1.8 billion growth opportunity over the next ten years and our vision is for graze to be the number one healthy snack brand in this space. We are delighted that our multichannel strategy in both the UK and US is exciting customers and we can’t wait for them to taste the new graze innovations coming soon,” graze CEO Anthony Fletcher says, commenting on the results of the company’s year-end review. Fletcher is now the scale coach for international expansion for Tech City, helping fledgling growth start-ups find their path to grow beyond borders.
Graze was founded in 2008 by the developers and logistics experts behind the technology that powered LoveFilm. The company has gone from a bedroom to an international business in less than a decade, and now employs over 500 people on both sides of the Atlantic.
Its American focus began early, as a company that is majority-owned by American investor The Carlyle Group, with Octopus Investments and Draper Esprit and Management owning the remaining share.
Graze has a unique vertically integrated business model which enables the company to provide customised direct to consumer snacks. Using an algorithm applying the use of big data, graze tracks market trends and customer tastes and as a result can create completely new snacks in less than 48 hours. Graze launched into UK retail in 2015 and into US retail in 2016 and is now contracted to be in over 35,000 retailers and drug stores across both markets.
UK growth highlights
Since launching into UK retail in July 2015 graze has successfully evolved the business into multichannel with the retail business continuing to grow strongly. graze is now on shelf in most of the UK’s leading national retailers including Tesco, Sainsbury’s, Waitrose, Asda, Boots and WH Smith and continues to deepen existing relationships and sign-up new partnerships.
- Broken through 9,000 stores and 65,000 distribution points
- Extended from single serve offer in the ‘on the go/front of store’ area into three ‘take home’ aisles in store – premium nuts, cereal bars and confectionary
- Store coverage recently tripled in the UK’s biggest retailer Tesco – now at 16,000 distribution points
- Extremely successful ATL/BTL campaign in January with 1 million punnets sampled across London
- Successful in-store January promotion with WH Smith Travel driving ongoing spend
US growth highlights
Graze has been online in the US for over three years during which time it has localised its entire product range for American consumers. Its knowledge and learnings from 15,000 daily customer reviews, coupled with its expanding US infrastructure have been crucial in making the move to multichannel with the launch into retail in October last year.
- Within just five months of launch on shelf in over 4,000 stores with a further 16,000 stores confirmed
- In store in every state across the US
- Following early sales success in large national drug chain, distribution more than doubled to over 7,500 stores
- Increased in-store penetration spanning the categories of healthy snacks, indulgent treats, confectionary and breakfast food