Oddbox and SimplyCook on what F&B subscription brands need to succeed

Direct-to-consumer (D2C) selling enjoyed a massive boost during the pandemic – and the F&B sector was among those to benefit. Attest research shows more than a quarter of UK consumers are now signed up to a food and drink subscription box service.

But as we navigate out of the pandemic, is there still opportunity for new F&B subscription brands and what will existing ones need to do in order to continue to thrive?

We sat down with Liz Yates, Head of Growth at vegetable box brand Oddbox and Oli Ashness, founder of meal kit brand SimplyCook, to explore these questions in a recent webinar organised in partnership with The Grocer. You can watch the webinar ‘DTC and Subscriptions Masterclass’ here or carry on reading to learn their top pieces of advice…

So, what’s changed?

The rise in food and drink subscription services mirrors the increased interest in home cooking seen since the outbreak of coronavirus. With restaurants closed, Brits have grown in confidence in the kitchen and this has changed their reasons for subscribing to food and drink boxes. Today, 30% of Brits think food or drink subscriptions are great for trying new things, up from 16% in 2019. ​​

Ashness from Simply Cook agrees: “Customers use SimplyCook to try new meals initially. And then often they get hooked on particular dishes, and they might cook those on repeat, but that initial customer needs to cook new meals. People’s interest in cooking more adventurous meals is on the rise.”

Keys to success

While there might be higher consumer interest in F&B subscriptions than ever before, there’s also greater competition. When looking at what it takes to be successful as a D2C brand in this environment, Yates from Oddbox has a three-pronged approach of measurement, consistent brand comms, and exceptional customer service.

“You’re having to constantly iterate, whether it’s your on-site conversion rate tests or different ad formats that you’re using across multiple channels,” she says. “If you don’t have a very clear measurement framework or forget to have a control group for an ad that you’re running, then, ultimately, it’s been a waste of time because you don’t really know whether it’s worked or not. Be very clear about what the KPIs are so that you can act quickly. Having that framework in place is critical to success.”

Yates adds that consistent brand messaging is particularly important for purpose-driven brands like Oddbox, and not just in terms of marketing. “It’s everything from the creative and copy you see on the website to what you get in the box to the way that our customer happiness team speaks to colleagues, and that’s important for building trust and authenticity.”

Be very clear about what the KPIs are so that you can act quickly. Having that framework in place is critical to success.

Liz Yates, Oddbox

Finally, exceptional customer service is what helps set Oddbox apart from its competitors. This means stepping up to the plate when a customer’s box is not delivered or if there is an issue with the products.

Says Yates: “We just launched in the North of England at the beginning of September during the petrol crisis and a lorry driver shortage. If you’ve got an incredibly strong customer service team, you can preempt some of those issues and get ahead of that; you can turn a negative situation into an incredibly positive situation.”

Our research has found that the worst things a subscription brand can do include failing to deliver quickly enough and making it difficult to cancel. Among the best things they can do are offering free delivery and rewarding committed customers. 

Making data-backed decisions

Both Oddbox and SimplyCook say they rely on consumer insights and other data sources to guide their decisions and make sure their brands maintain growth. 

“Understanding the target customer is the key to success,” says Ashness. “And that’s a constantly moving target that will always change with each of your decisions. So constantly looking at the data and figuring out where to go next is the most important thing you can do to win.”

Yates adds that understanding – and responding to – consumer behaviour is especially important: “We constantly see behaviours like over the summer loads of customers were skipping boxes. What we didn’t understand without running a survey was, are they skipping because they’re on holiday, in which case there’s really not much we can do, or is it because they’re getting too many items in their boxes and they’re not getting through them? In which case, that is something we need to tackle.”

Understanding the target customer is the key to success – and that’s a constantly moving target.

Oli Ashness, SimplyCook

In addition to using Attest to survey their own customers (which is something you can do for free), Oddbox also use the platform to reach potential customers, tapping into Attest’s audience of 125 million consumers in 58 markets. 

“We use Attest right through the entire marketing and product lifecycle of activity,” says Yates. “We use it for validating messaging, creative and NPD. We ran a recent out-of-home campaign and all of our copy lines were tested so we had real conviction in our creative route, which is really important if you’re spending a lot on media. 

“Finally, we also use Attest to track the impact of those activities. We set our brand tracker live last week and within a day it’s complete, we’ve already got the results and we’ve got a much fuller picture of that out-of-home activity.”

What’s the next big opportunity in D2C?

Pinpointing areas for innovation will becoming increasingly important for F&B brands hoping to find success in the direct-to-consumer sector, especially as the market becomes more saturated. 

According to Yates, the older demographic represents one area that’s ripe for exploration: “Historically, there’s always been a perception that D2C brands are for younger generations, and I think one thing that the pandemic has changed is that everybody, to some extent, has moved to online shopping. 

“If you’re an existing D2C brand that perhaps has younger audiences, especially post iOS 14 and the challenges with Facebook, if you’re having to look at more traditional media channels, there is an opportunity to investigate how you can better serve older audiences. 

“The inverse of that is, if you’re an FMCG brand thinking about direct-to-consumer, maybe you have an older customer base already and maybe there’s a real opportunity there to serve them in a better way and perhaps this could be a new competitive advantage for you?”

 If I were setting up a D2C business tomorrow, I’d either pick a niche or a business that I could internationalise into emerging markets.

Oli Ashness, SimplyCook

Ashness adds that because big players are becoming interested in the D2C model, smaller brands will need to focus on niche offerings in order to find an audience.

“I think there will be more opportunities in different niches with different preference sets,” he says. “So if you can find a slightly higher value product and there’s a niche customer group to go after, there will be opportunities to build smaller businesses there.”

He adds that the biggest opportunities might not be in the UK: “Internet penetration is really high here and COVID has just happened so we’re four years ahead. Royal Mail parcel sales have massively contracted in the last three months so it’s short term in reverse, whereas emerging markets are absolutely bonkers.

“If I were setting up a D2C business tomorrow, I’d either pick a niche or a business that I could internationalise into emerging markets where they’re going to go through that ecommerce penetration growth we’ve been through.” 

Want to find out more about food and beverage consumer trends?

Download our D2C Digest to access all the F&B subscription data discussed in the webinar: