The future for
subscription brands


10 years since its launch as a subscription brand, graze is selling individual snack packs in Boots.

Image courtesy of Graze

And ‘Hello Fresh’, the fresh food delivery subscription service, has launched meal kits into Sainsbury’s.

What is the future for subscription brands as routes to market blur?
Are consumers getting turned off by subscription brands?
Everywhere we look these days, subscription brands are vying for our attention.

There’s no denying that subscription brands have satisfied consumer desire for quality and convenience, and the surprise and delight in receiving a delivery can make us feel all warm and fuzzy inside. But is the move into retail a sign that they are struggling to remain relevant? And are they actually convenient, or a bit of a pain?

Images courtesy of Hello Fresh and The Grocer

As a consumer who has frequently bought into subscription brands, the novelty has tended to wear off fairly quickly, and I’ve ended up cancelling my subscription within a matter of months. Meals that take ages to prepare and cook, or the tyranny of vegetables that need eating, doesn’t feel so convenient after all. And most people I have spoken to have experienced the same thing.

So, is subscription a sustainable business model, or is it a leaking bucket that requires constant recruitment?

I think it is a really interesting way to launch a new brand, not least as a level of cash flow is secured. It also provides a great way to build a consumer base and fine tune products and recipes as you go, with regular consumer feedback.

For those subscription businesses that have established a strong brand and product offer and have built a loyal consumer base, going into bricks and mortar stores actually feels like the logical next step to grow the business significantly. A sign of success, not failure.

So, what might the future hold for subscription brands?

Will we see more subscription brands make the transition into traditional retail channels? Probably. But like graze and Hello Fresh, they will need to be brands that have already established themselves with a strong relevant offer.

My feeling is that there will always be a place for subscription services, but in order to succeed, they are going to have to develop a unique offering or a highly personalised service, and not just jump on the subscription band wagon because, quite frankly, we’re all getting a bit bored of it.

And what are the implications for retailers?

Tesco’s ‘Food Love Stories’ campaign, which places the emphasis on fresh, home cooking in a people-centred, relatable format shows how big retailers are responding to the demand for fresh produce and revived love of home-cooking.

Will retailers start offering their own meal kits delivered to your door? Or is the bigger challenge to convince consumers that their Own Label offering in fresh meat and produce is as good a quality or better than the subscription brands?

We’re excited to see how retailers and retail brands respond.

Images courtesy of Hello Fresh and The Grocer

‘Food Love Stories’ by Tesco

Laurie Offer - Marketing and Development Director - Cowan London
12th September 2017