Snack-maker Graze.com, which manufactures and delivers letterbox-sized parcels of healthy snacks to subscribers, has reported “unprecedented” growth in the US, traditionally the graveyard for small British firms

Snack maker Graze.com smashes US targets

Snack-maker Graze.com, which manufactures and delivers letterbox-sized parcels of healthy snacks to subscribers, has reported “unprecedented” growth in the US, traditionally the graveyard for small British firms.

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Graze.com now boasts more than 100,000 subscribers across the US.

By Rebecca Burn-Callander, Enterprise Editor

7:00AM GMT 10 Mar 2014

Graze.com launched into the American market in December last year. Within a week, the company had signed up 30,000 subscribers across 48 states. Three months on, the company has smashed its first quarter targets, with 100,000 customers signed up.

“We estimate the size of the US postal snack market at $500m,” chief executive Anthony Fletcher told The Telegraph. “The opportunity in the US is significantly larger than in the UK. The growth we are seeing there is phenomenal and, within two years, the US business will surpass the UK.”

The £52m-turnover company is planning to invest $75m in its Stateside operations over the next two years. The cash will be generated from a mix of operating profit and bank debt, said Mr Fletcher.

However, the success of the British company has not gone unnoticed. US food giant General Mills launched a rival snack delivery service in January this year. Its new Nibblr offering will compete directly with Graze’s product.

“General Mills is a big competitor but their size is not an advantage in this business,” said Mr Fletcher. “It’s more about tech savvy, responding instantly to customer needs, and creating a smart supply chain than about economies of scale.”

While the US is a key growth driver for the brand, Graze will continue to use the UK as its innovation test bed. “We’ve trailed kid-specific products, which have been hugely popular,” said Mr Fletcher. “Kids love receiving a package with their name on it. And we’ve also been exploring new segments, testing a porridge box. We would like to take ownership of meals as well as snacks.”

Graze uses existing postal services to break into new markets. This posed a challenge in the US. “The US Postal service is a very different beast from the UK,” said Mr Fletcher. “It’s tough to ship a low-value item at a cost that made sense to the business.”

Using Graze’s proprietary logistics solution, codenamed “the Brain”, the company has brought costs down and now serves the whole of the US. Following the success of the new market, Mr Fletcher admitted that he is now considering launching into Western Europe. “Although we’d be mad to take our eye off the ball in the US,” he said.

“It’s great to be a British company succeeding in America,” he continued. “Too often the traffic is in the other way.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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