Dive Brief:
- Online snack subscription service UrthBox is launching an online marketplace, dubbed UrthMarket, later this month, according to Food Navigator. Company spokeswoman Kathy Chang explains that UrthMarket will be “a platform which would allow consumers access to a large selection of healthy, ethically sourced, and GMO-free products in food, beauty, skincare and lifestyle goods.”
- The UrthMarket model is akin to online retailer Thrive Market, but consumers can expect significant savings because UrthMarket doesn’t require a membership fee. Another incentive that could draw shoppers to the site is UrthBucks, in which the retailer gives consumers anywhere from 10-30% back in dollar-for-dollar credit to use on future purchases.
- There are incentives for manufacturers to stock their products on the platform as well. “Early bird vendors/brands are getting first-come, first-serve top placement for their products, plus 70% off all of our standard marketing programs during pre-launch,” Chang said. This includes preferential keyword search rankings.
Dive Insight:
UrthBox primarily delivers ready-to-eat snacks with some beverages and personal care products on a monthly subscription basis, but consumers don’t get to choose what’s in the box. In contrast, UrthMarket is intended to be a marketplace where consumers can buy exactly what they want — a model more aligned with growing consumer interest in personalization and customization. Some “healthy” brands UrthMarket is posting about on its Facebook page are: Annie Chun’s, Justin’s peanut butter, NuGo Nutrition bars, Pressed Juicery and Purely Elizabeth, among others.
This latest strategic move by UrthBox toward an online marketplace could be a sign that consumer interest in snack and other food subscription services is waning — or that they’re just not a very sustainable model for manufacturers. Given what seems to be a host of struggling online meal kit startups, including Blue Apron, this wouldn’t come as a total surprise. Already, startups Sprig, SpoonRocket and Maple Food have closed operations.
“We see online grocery shopping growing rapidly over the next few years, especially in health and wellness,” Chang of UrthBox told FoodNavigator-USA. Most analysts would agree with Chang on this point. It’s expected that 20% of all grocery sales, representing around $100 billion, will come from online shoppers by 2025, according to data from the Food Marketing Institute and Nielsen.
But then Chang continues, “We are planning on UrthMarket being the go-to online destination for health-minded consumers.” Most analysts would find this goal overly optimistic, since it seems UrthMarket is a bit late to the e-commerce game. With grocers increasing their online shopping options and pure-play sites like Thrive Market and MoveButter moving in with low prices, the question becomes, how will UrthMarket stand out from the competition?
Amazon has big plans to disrupt retail grocery, and those plans now include using newly acquired Whole Foods for fresh foods distribution and as physical pickup points. Many of the largest U.S. grocers — Walmart and Kroger among them — are heavily investing to ramp up their own click-and-collect models. Walmart’s e-commerce sales grew 73% year-over-year in Q2 2017, with online grocery as the key driver.