Everywhere you look there are healthy food alternatives; from energy balls to matcha chocolate, there is an endless, overwhelming list of options. But before the market blew up there was Graze. Launched in 2008, Graze started out as a subscription service allowing users to hand pick a range of snacks to be delivered to their door.
Since then it has gone through a colourful rebrand and successfully expanded into retail. Its focus on healthy snacking and direct connection to consumers earned it covetous eyes from a number of major FMCG companies when it was put up for sale last year. In the end, Unilever won the bidding war, marking the first acquisition since new CEO Alan Jope took charge.
Graze’s CMO, Pia Villa, talks to Marketing Week about the challenges of direct-to-consumer, branching put into retail and what Unilever can learn from the brand.
You have recently been bought by Unilever. What can it, and other big FMCG companies, learn from direct-to-consumer brands such as Graze?
“Having worked at larger and smaller organisations, including Unilever and Innocent Drinks, Graze is the fastest and most agile. It has a more flexible and dynamic way of working that bigger business can adapt.
“The core principle of agile working is you get a team of experts together, give them a problem and a certain time frame to crack it and they have to come back with a solution. That can be a new product, new packaging or a new tool on our website. Those core principles can apply to any organisation.”
What do you think your background brings to Graze?
“Retail expertise. When you look at the basics of brand building they are the same as a subscription brand or as a retail brand but the context is different.
“On the retail shelf you need to stand out, you’ve got seconds to grab someone’s attention and you are also framed by the competition around you. It’s thinking about all of that and making sure we consider that on our packaging, in the products we develop and the products we build.”
Graze expanded into retail in 2015. How has that gone?
“The key factor to our success is looking at both channels as complementary and not competing with each other. What I mean by complementary is that we view our direct-to-consumer subscription business as a brand building channel first and foremost. When you look at people that experience direct-to-consumer, they are much more likely to buy Graze in retail as they are more loyal, spend more and understand the brand better.
“Retail we see as our channel to drive market penetration for the brand. Our launch into retail has not had any negative impact on our direct-to-consumer business, actually we’ve found it’s the reverse.
“Ultimately retail is the majority of our business and is also the growth engine and strategy for the future as well.”
If retail is the majority of your business, what role does direct-to-consumer play?
“Direct-to-consumer allows us to tap into a slightly younger, more millennial target group which typically food brands find more difficult to connect with.
“We use it as a much quicker and cheaper market research tool by harnessing our community to test concepts. When we launch new ideas or packaging designs basically overnight we can get feedback from hundreds of thousands of people, so it is an important source of intelligence for the retail business as well.
“Over time the way we have used direct-to-consumer has changed, so now we also look at consumption data: out of all the products that people use which ones do they like and if we change positioning and recipes what impact does that have? Also, looking at long-term trends for example, we see that interest in plant protein has been going up while other fads have not lasted over time.”
Do you think Graze could have reached the scale it has now without branching into retail?
“There will always be a natural limit to the number of consumers you can recruit online versus in a physical store. In any brand, the potential for consumers is likely to be bigger in retail than direct-to-consumer.
For us as a business, I don’t think we would be at the scale that we are now without retail. That might be different for other categories and businesses but in FMCG and grocery, retail is still where the majority of people shop and you can reach that mass market.
Graze relaunched its packaging and brand in July 2018. What was the reasoning behind the decision?
“Graze is founded on the idea that we want to make healthy exciting and we realised that our old packaging – brown and natural – did a great job in landing health and naturalness but we could dial up the excitement.
“Secondly, we wanted to align the brand around a consistent idea and brand identity because the power of multi-channel is that [retail and direct-to-consumer] reinforce each other. But the danger is you build slightly different brands across the two channels and we wanted to make sure we define a really consistent brand that can flex across both channels.”
Graze has an in-house creative team. Why does this work for the brand?
“We have a team of experts who know the brand inside and out and can deliver a really consistent look and feel. Having an in-house team enables us to work at a faster pace. And when you really look at the total creative system it ends up actually being cheaper to have an in-house team and only use agencies for selected projects where you maybe don’t have the expertise in-house or where you really want to stretch your creative.”
What have been your biggest challenges at Graze?
“Getting my head around the multi-channel model and the role that direct-to-consumer plays and how it reinforces your retail proposition. [It’s been a challenge] to make the two channels support each other while having consistent but distinctive roles.”