graze.com, the online retailer of healthier, portion-controlled snacks, reported it doubled its U.S. subscriber base in months following its official U.S. launch in December 2013. graze.com has committed to spend over $75 million on the U.S. business over the next two years supported by their investors the Carlyle Group, Octopus Investments, and DFJ Esprit and Management.
Current grazer demographics and behavior indicates the size of the untapped U.S. e-commerce snacking category to be a minimum of $500 million, and this anticipated spend is a commitment to creating the infrastructure and leading the category. The investment will be applied to its graze kitchen, proprietary fulfillment facilities, marketing, U.S. product development, and technology such as the so-called “graze brain,” which determines the best and most efficient route direct-to-grazers utilizing FedEx and the U.S. Postal Service.
“We’re focused on finding avenues for growth and using our one-of-a-kind logistics solution to deliver a high-quality, reliable proposition to our grazers at a price point that’s appealing,” says Anthony Fletcher, chief executive officer of graze.com. “Owning the whole integrated supply chain enables us to use grazers’ feedback to tailor product offerings, ensure the right products are getting to the right markets, to be flexible and fast, and to be profitable.”
graze.com is employing start-up techniques to engage consumers and succeed in the marketplace, and is already achieving record new sign-ups for the company. In addition, graze.com has redeveloped about 30 percent of the product range to suit its U.S. grazers.
At the heart of the graze.com operation is its proprietary technology that is integral to every part of the process from product inception to end delivery. graze.com uses a unique taste algorithm called DARWIN (Decision Algorithm Rating What Ingredient's Next) to determine how snack portions are sorted, how boxes are labeled, and how each box is customized based on dietary requirements and feedback on food preferences. It also records the grazer’s order history and monitors stock levels. graze.com gets over 15,000 new ratings per hour and can use this data to create, pack, and dispatch a new product to grazers within 48 hours.
“This data enables us to do what other companies shy away from, which is to take risks and surprise grazers with a product selection they don’t personally choose but might not try otherwise,” Fletcher says. “Our algorithm is so advanced that it can even capture quite abstract ‘clusters’ of data to spot whether a grazer is lactose intolerant by their behavior when selecting product categories.”
For $6 including shipping and handling, grazers are able to order personalized snack boxes online and have them delivered to their homes or workplace as often as weekly to monthly. Due to its design, the boxes fit in a regular mailbox without the need for a signature. This frequency and accuracy is achieved using graze.com’s logistics model.
“We’re proud to say that even through the recent adverse weather in the U.S. and our rapid rate of growth, we’ve managed to deliver 99 percent of boxes on time,” Fletcher says. “This is a testament to how well our innovative postal model works and our seamless integration with FedEx and USPS.”