Following the news of Unilever’s acquisition of Graze, Ronan Stafford, Research Director at GlobalData, offers his view:
“Direct to consumer brands have a big future ahead of them, and Unilever’s acquisition of Graze is a necessary step in helping it to achieve leadership in this space.
“Last July Unilever stated that direct to consumer accounted for 5% of their revenues, but that this could easily double. The acquisition of Graze is a big step in this direction: it brings not only a successful snacking brand, but also the know-how of making a direct to consumer business work in food markets.
“Adding a direct to consumer food brand is a natural expansion for Unilever. Unilever already owns Dollar Shave Club, a pioneer of subscription model products in toiletries markets. Its other direct to consumer efforts includes beauty brands such as Skinsei and Nexxus.
“The next step for Unilever is Graze’s international growth. Currently only present in the UK and the US, strong expansion opportunities exist in Canada and other Western European countries as a result of the growing importance of online shopping and demand for personalized and healthier snacking.
“While Graze is available in retail stores, further development of this brand should be focused on the direct to consumer model. Online shopping is on the rise, the online platform offers an exciting ability to offer a personalized experience to consumers driving customer loyalty, and the direct to consumer model offers Unilever greater control over margins at a time when discounters are in the ascendancy in retail markets.”