As more snack-loving consumers turn to quick bites in place of a meal, a direct-to-consumer start up launched this spring is hoping to help shoppers uncover hidden brands in a space where there is no shortage of products from which to choose.
The website, SnackMagic, offers hundreds of different options across 14 different categories with brands that change weekly. Some come from established companies, like sparkling water Topo Chico from Coca-Cola or Tate's Bake Shop sold by Mondelez International, but much of what the site peddles are "off-the-beaten path" brands new to the marketplace, Shaunak Amin, founder and CEO of SnackMagic, told Food Dive. The idea is to give these largely unknown brands a chance to tell their story and introduce themselves to customers, he said.
"I don't think any one company has actually really cornered this market. And with the innovation that's happening in this space, with so many new brands launching, so many different diet trends, I think this is a big market that's evolving very, very quickly," Amin said. "We'd like to own the space and be the Amazon for snacks and beverages."
As consumer fondness for snacking and eating-on-the-go increases, big food companies including Mondelez International, Hershey and Campbell Soup have increased their presence in snacks, largely through M&A, joining smaller upstarts in flooding the food space with an ever-increasing number of choices.
According to a study Mondelez conducted with the Harris Poll last year, snacking is preferred to eating meals for 59% of adults worldwide. For millennials, that figure jumps to 70%. The results found catering to indulgence might actually be an asset rather than a problem; 83% of respondents indicated an otherwise balanced diet can contain some indulgence. Four in five adults appreciated having both healthy and indulgent snacks readily available.
"I don't think any one company has actually really cornered this market. ...We'd like to own the space and be the Amazon for snacks and beverages."
Founder and CEO, SnackMagic
SnackMagic was officially launched in May, and today carries about 500 different SKUs from more than 200 brands. The company has shipped more than 30,000 boxes — each one containing an average of 17 different snacks, Amin said — during its first six weeks. Sales have been doubling every two weeks since the launch.
"The results have been better than any of us expected. We have a long way to go, of course," he said.
SnackMagic was founded by Stadium, a group lunch delivery service in New York City popular among businesses including Google and Major League Baseball before coronavirus halted office work.
Once the pandemic shut down the city and tens of millions of people across the country started working from home, Amin saw an opportunity both to get snacks to consumers nationwide, and for businesses to reward their employees who are working remotely.
At the same time, as supermarkets focused on increasing safety measures for employees and keeping shelves stocked with popular items, retailers had less time and shelf space to devote to newer products. This left smaller upstarts struggling to get their offerings on the market during a difficult period.
"Snackmagic may have the perfect market timing to become a discovery portal for snacks," James Richardson, founder of strategic planning consultancy Premium Growth Solutions, said in an email to Food Dive. "E-commerce discovery is pretty much the ideal way for shelf-stable early stage startups to get initial traction right now and perhaps for years" depending on what happens with a coronavirus vaccine.
Stephanie Yudowitch, who also co-founded both Stadium and SnackMagic, said the platform mimics the in-store experience online because it gives shoppers a way to try a product before they decide to purchase it again, either as a single item or in a larger quantity.
SnackMagic options consumers are unlikely see on shelves include a Hummingbird's Lavender Pistachio and Blueberry Hemp Protein bar, Cafe Joe's Coffee Bites, Choward's Violet Mints, Vegan Rob's Vegan Probiotic Sorghum Cauliflower Chips and New Wave craft sodas.
The company is testing a QR code that people can scan once the box arrives that would bring up a page showing what the individual ordered and how they can purchase more. For now, shoppers get a follow-up email after an order, giving them the option to buy more with a single click. SnackMagic is currently designing a page on its website prioritizing ordering in bulk.
Yudowitch, who works as head of merchandising at SnackMagic, said the site tries to keep prices close to what a consumer might pay at the store. The cost ends up being slightly higher because the platform has to factor in shipping costs. The average order is $45.
A new chapter in food and beverage
SnackMagic is rapidly growing, both adding upstart brands and better-known offerings that are testing new products with customers. The platform recently added Good Health, the better-for-you snack brand from chip and pretzel maker Utz. It expects to add another 500 brands in the coming months, based on current interest levels, Amin said.
The company wouldn't rule out adding more big-name items to its lineup if the product represented a new flavor idea, but for the most part SnackMagic wants to ensure it maintains the treasure hunt-like sense of discovery. Early on, SnackMagic offered Coke, but Yudowitch said it discontinued the iconic drink to ensure it could give "proper exposure and digital shelf space for a brand who we felt had stories that were being untold."
Still, she wouldn't rule out adding more brands with broader consumer recognition as SnackMagic increases its reach across the United States.
"We are going to have to consider branching out into names that people would recognize" to complement the smaller brands, Yudowitch said.
The SnackMagic website is a virtual snacking store where consumers can choose products in categories such as bars and bites; meat, fish and jerkies; dried fruits, nuts and granola; sodas, soft drinks and seltzers; and wellness, hemp and CBD. The company also offers pre-selected medleys under themes including Mom Approved, Most Unique and The Keto. Pre-selected groupings can also celebrate occasions including birthdays or seasons.
The snack space is becoming increasingly popular as more food CPGs are fighting for a share of the consumer's ever-growing snacking dollar. Many of the services offered by food giants for their mainstream offerings mirror the strategies harnessed by SnackMagic.
Glen Walter, president of North America for Mondelez International, told Food Dive the company uses a direct-to-consumer platform to connect some of its brands with shoppers. It can use the model to increase awareness for a brand that isn't as widely distributed, such as premium cookie maker Tate's Bake Shop, or personalize an already popular offering.
Consumers can create a custom mix of Mondelez's Sour Patch Kids by color and package size or personalize it with their name on it. Iconic cookie brand Oreo allows consumers to purchase personalized gift boxes for special occasions, including birthdays, graduations or weddings.
"It's not that easy to walk in and say, 'Here's the new snacking brand that's going to beat an Oreo.' That's going to be very tough," Dirk Van de Put, CEO of Mondelez, told Food Dive in February. "These brands, ... people have eaten them for their whole lives — that creates a special link. And so it is difficult to sort of displace that."
In May, PepsiCo launched two direct-to-consumer websites where shoppers can order an assortment of the company's products.
PantryShop.com allows consumers to order specialized bundles containing PepsiCo's top-selling pantry favorites from brands including Quaker, Gatorade, SunChips and Tropicana within specific categories such as "Rise & Shine," "Snacking," and "Workout & Recovery." The other site, Snacks.com, enables shoppers to choose from more than 100 of their favorite Frito-Lay products including Lay's, Tostitos, Cheetos and Ruffles, as well as dips, crackers and nuts. The two sites were created in 30 days.
Still, SnackMagic remains confident that its collection of unknown brands and sense of discovery will enable it to succeed and separate itself from its deeper-pocketed competitors.
"We're never going to force what goes into the box, and I think that is what differentiates ourselves from all the other curated box services out there," Yudowitch said.