If you really fancy a lemon drizzle flapjack, pop in most shops and a tempting, ‘healthy’ snack made by Graze awaits you, but it wasn’t always that way. The snack creator started life as an internet retailer, dishing out vast quantities of nuts and seeds, particularly to office workers. The novelty oozed out and the mass marketing was met with occasional and distinctive delivery boxes containing all of your daily snack needs.
The slick snack selling strategy was enough to lure Anthony Fletcher, chief executive officer of Graze.com, to jump ship from fellow sensation Innocent. Anthony was planning to leave the drinks company and start his own venture, “but one day I saw a grey box and was blown away by this idea, which was very novel then, of bypassing the retailer and going direct to the consumer and the advantages that would bring you and some of the technology trends it represented, such as around access to data or building brands in a digital way,” said Anthony.
Anthony got the job at Graze the same way as he had at Innocent, by knocking on the door and presenting himself to some slightly startled founders. “I told them that I thought their idea was the next big idea, because it was not just a brand or a product idea, it was a business model idea, which I found very intriguing. I said, well, I’ll taken any job, keen to be involved,” said Anthony.
A twisty and turny journey followed, during which Graze re-pioneered its model. Radical at the time, but the company looked like a basket case, losing huge amounts of money. “We built our own factory, mastered the use of data, got the product right in a very iterative and data-led way,” said Anthony. Profitability and leveraging a fantastic cashflow was followed by a private equity buyout.
What had become crystal clear was that most people wanted to buy Graze in shops. “It’s a snack product at the end of the day,” said Anthony. “Snacks are impulsive, but, also, people are quite attached to their original shopping habits. When it comes to food, the size of the online market is somewhat overstated. In people’s imagination, most consumers want to buy food in the way they have done for years.”
Graze’s response was to pioneer a multichannel model, surprising those who saw online as the future. “The online channel, for us, has some disadvantages, in terms of complexity, in terms of online postage,” said Anthony. “It has many advantages in terms of data in terms of your relationship with consumers and building the brand.”
The data also revealed that a lot of people tried the product, with those who found it a strong proposition remaining loyal for years. The challenge lies in establishing the models that appeal to different groups of customers. “The good news is that it has become a lot simpler,” said Anthony. “When Graze started, 11 years ago, you needed very, very rare expertise. The cost and simplicity of delivering the technology has moved on enormously, so it is within reach of entrepreneurs should they want to look at it and master the certain skills you need.
The company is now specialised in vegetable sources of protein: nuts and pulses, not just for vegans and vegetarians. “Consumers are interested in protein beyond meats and yoghurts and animal-derived products, but they are more interested in protein generally, seeing it as a good way to fuel them through the day. That’s something that has been big for us.
“The advantage of the online model is you do the big launches in retail, which are really honed and thought through. Online you can fiddle a lot more and play around, which is fine with your consumers. Your customers need the best and very well executed. The consumer and online models are very different beats. Mastering both is twice as hard, but it also brings advantages.”