What A $12 Million Series B Funding Means For The Snack World
SnackNation now delivers their snack boxes to over 500,000 office works and is collecting their snacking habits and data analytics to brands, which could change the snack category for the better.
Just days after the Sweets & Snacks Expo, the nation's largest trade show that focuses on confectionery and snack manufacturers ended, SnackNation announced another round of funding led by 3L Capital bringing its total venture funding to $22.5 million; which could change the way snack brands do business.
While the timing of the funding announcement might be just coincidental, the rise in Americans’ snacking habits certainly is not – and SnackNation seems to be focused on hitting the bull’s-eye. According to Jordan Rost, vice president of consumer insights at Nielsen, in his session titled “The Snacking New World Order” at the Sweets & Snacks Expo, the snacking category, which includes everything snackable like yogurt, Kombucha and dessert bars has grown $168 billion since 2014. iRI reports that the sales for snacks alone now tops $25 billion a year (which does not include sales for candy which reached $24.9 billion itself), . Much of the discussion at Sweets & Snacks educational sessions was about retailers combating online based-based services like Amazon and Walmart's Jet.com and that many supermarket chains in the country are redesigning their checkout lanes to reduce their sugar and fat laden offerings and switching to “better-for-you” snacks.
SnackNation delivers healthier snack boxes to offices, directly to consumers’ homes and just launched a program in agreement with Cargo to offer their snacks to Uber passengers while in car. Their business, while it seems as if it is selling these better for you snacks everywhere they can reach a consumer, is actually more focused on the data they can collect about snack eaters preferences - and offer that to the brands they partner with. In fact, Sean Kelly SnackNation’s CEO told me in an interview at their Culver City, CA headquarters, that most of the snacks they ship and sell in their kits to offices is given to them by the brands who are eager to reap the rich data they provide.
It’s not just about free samples. SnackNation rotates a panel of “snack tasters” from their 150+ mostly Gen Z and Millennial staff who he says are the ultimate deciders of what snacks are on trend, hip and of course, meet their nutritional criteria. Which is more valuable than you might think. For the 2018 Best in Show Most Innovative New Product Award at the Sweets & Snacks Expo this year, the top winner was presented to Hostess Brands, LLC for Double Chocolate Cake Delights (which I've tasted) is sickingly sweet and has one of the longest list of ingredients, both natural and artificial, that I have ever witnessed on a snack product and would doubt that many Gen Z or Millenials would find hip or on-trend.
The benefits to the offices who purchase the snack boxes, satisfies their workers’ hunger pangs - and keeps their workers in the office - and also offers them a surprise with mostly products they have never seen or heard about before. Making these workers trend setters in their own Instagram world and they will often share their snack discoveries in their social media outlets to the brands’ benefit. Yes, you will find seaweed and kale snacks as well as the latest offerings that include insect protein, ancient grains and ones with Ghost Pepper for those who want to test the boundaries of their taste buds. Within weeks of delivering their snacks, SnackNation works with the offices (usually through HR) to have their employees complete a survey about the snacks they consumed – and that’s the information to the brands that could well become their roadmap for success, and to understand why a particular snack was a failure.
SnackNation, according to Kelly, offers a unique combination of core competencies: collecting data analytics and consumer insights that allow them the tools to curate what snacks these generations want - and also to help companies create new products through its business intelligence. He sees SnackNation using the $12 million in funding to enrich their direct to consumer business as well as offering webinars, SEO and brand marketing tools to their snack brand partners. He believes that the combination of B2B in offices and direct to consumers moves SnackNation to a huge position that is unheard of in the snack world. Bottom line for Kelly is that the sum of all the parts of what SnackNation is now doing is greater than the whole and he wants to expand their offerings to include scan data that he could offer even more data, including the time of day that a particular snack was being consumed the most.
SnackNation, in business since 2014 now delivers to about 500,000 people in offices nationwide and each snack box is different and based on the office’s preferences collected through the survey from more than 5,000 different and rotating products that are now packed in their Carson CA fulfillment facility. One key to the business and the intelligence it can offer to the brand, is office customer retention in order to properly track the trends over time, and he has assembled a large team that focuses on just that – in fact, that team is separate from those who are responsible in selling the boxes to the offices. A snack concierge service for offices if you will.
Not a surprise, Kelly told me that unlike when the company first started and they had to hit the streets to get snack brands involved, today the emerging on-trend and well-established brands are reaching out to Snack Nation to sample their snacks to it's influencer customer base, which includes some of the hottest start-ups as well as established game changers including Microsoft, Huffington Post and Uber. And in return reap the benefits of all those snack-alytics.