As subscriptions continue to become primary growth driver for enterprise brands in the food and beverage category, Bold was pleased to host a recent webinar: Growing food and beverage subscriptions in 2021. The dynamic discussion featured industry-leading food and beverage subscription experts: Trae Halkitis, CTO of Metabolic Meals, and Hamid Saify, VP of Ecommerce, Liquid Death, along with subscription industry leader, Chris George, Chairman and Co-Founder, of the Subscription Trade Association (SUBTA). The group was rounded out by Bold’s own Co-Founder and VP of Growth, Jay Myers.
If you’re launching or scaling a subscription program outside of the food and beverage sector, such as beauty, pet supplies, or SaaS — don’t stop reading. When it comes to running a successful value-packed subscription business, the principles and takeaways discussed in this webinar apply across almost any vertical. Here is access to the full webinar.
We've also compiled key takeaways from the webinar for enterprise leaders looking to scale subscription programs:
1. Make your subscription stand out
If you haven’t heard of Liquid Death, get ready to have your thirst for creative ecommerce marketing quenched. This subscription beverage brand offers sparkling and still variations of their death-metal inspired tall-boys of water, packaged and shipped to your doorstep, bar, or one of over 20,000 retail locations.
Saify said the idea stemmed from a desire to bring more fun to the consumer packaged goods (CPG) and water space, a vertical typically not known for creativity or brand differentiation.
Liquid Death pull out all the stops to stand out from the competition—from incorporating gruesome and satirically-dark imagery, asking customers to “sell their soul” to join their auto-death subscription club and leveraging the tagline “murder your thirst,” to death-metal inspired t-shirts and merchandise, horror trailers, or these targeted social media ads that repurpose their harshest critics into a kind of sardonic brand advocacy:
“When you see people shot-gunning a can of water, that’s the pinnacle of water branding.” – Jay Myers
Key takeaway: Tell your brand's story through every touchpoint with your customer.
Thirsty for more? Check out 6 beverage brands using subscriptions to replenish their revenue.
2. Pandemic proof your subscription
Trae Halkitis, CTO of Metabolic Meals, attributes the fresh meal delivery subscription services strong growth during the Covid-19 pandemic to having been equipped to handle an influx of delivery orders, as well as being a brand that customers trusted within the food delivery space. Where other food brands scrambled to get in on food delivery in the early days of Covid-19, Metabolic Meals already had their shipping, logistics, food safety and subscription protocols in place, making them the ideal meal solution for grocery-store wary food shoppers.
Metabolic Meals offered a convenient and customizable option for grocery-store wary food shoppers during the pandemic.
Liquid Death also enjoyed a positive growth spike during the pandemic. Similarly, they were well equipped to offer people looking to stock up on essential supplies a convenient delivery option. Allowing customers to get a discount when they ordered five or more cases at once as part of their popular F*** Corona campaign, they saw a 30% increase in subscriber revenue.
These food and beverage brands ability to pivot and meet new consumer demands under adverse circumstances speaks to the agility and future-readiness of their businesses. As the post-pandemic landscape continues to evolve, brands that can embrace a ready-for-anything mindset and be able to pivot to meet rapidly shifting customer expectations will continue to find easy wins.
Key takeaway: Futureproof your brand for anything by having the infrastructure in place to sell to anyone, anywhere, under any circumstance, and the agility to pivot in real time.
3. Instead of discounts offer a free gift with subscription
Liquid Death has thrived by offering meaningful merchandise beyond their product to their customers. For this reason it made even more sense for them to move from the typical subscribe-and-save offer to a gift-with-subscription model.
Despite initial concerns that customers might churn out after receiving their free shirt, Saify said it was the opposite. Giving out an exclusive, branded gift with a subscription actually became a huge driver for their subscription business, creating increased brand loyalty and a deeper connection with customers.
George agreed that giving a gift with a subscription is the way to go. Not only is the quality of the consumer higher, because they are spending the same amount they would have on a single-purchase, but there’s less chance of that customer churning once the discount expires. The heavy-metal inspired t-shirts and merchandise Liquid Death offers resonates deeply with their customers, as a plus, turn them into walking advocates for the brand.
“If brands did more gift with purchase, they would see higher quality consumers, they would see less churn.” – Chris George, SUBTA
4. Build a rabid fanbase
According to Saify, there are over 50 people with Liquid Death tattoos. They make sure to reward this brand of over-the-top fan loyalty by sending half a year’s supply of water to anyone who gets inked up with their logo.
Cringe-factor aside, most brands would die for this level of customer loyalty. When asked to describe Liquid Death’s approach to branding, Saify said ,“the way that we market this brand is almost like a wrestling character putting on a persona, but it’s still someone you would like to talk to. There’s an element of personality to this brand that people really connect to, a little personal touch we’ve added to this business.”
“You get this small percentage of consumers that now are like ‘I don't eat unless this meal shows up’ and they’ve become super loyal to the brand. It’s a lifestyle change. You look at Liquid Death, they even have this community, and those are two really good things, you have community, you have a lifestyle change, that’s a recipe for success” – Chris George, SUBTA
Key takeaway: Build a subscription brand that becomes part of a customer’s lifestyle or makes them feel part of a community.
5. Give customers control of their membership
Halkitis understands that food and meals are very personal to people, which is why Metabolic Meals goes out of their way to give customers complete control over their subscription. This starts in their onboarding process where customers can choose between “my choice” or “chefs choice.” In the overwhelmingly popular my choice option (90% of their subscribers), customers can curate their fresh meal plan to meet their exact preferences.
The massive growth Metabolic Meals experienced after launching the “my choice” option speaks to the desire customers have to be in the driver’s seat of their subscription.
“Within a few months of launching our My Choice plan we doubled our business.” – Trae Halkitis
6. Analyze customer churn as a whole
Though the food and beverage industry can have a high subscription churn rate, it can also be a rewarding space for gaining loyal customers who associate your brand with a lifestyle change or some aspect of their personality. Most subscription brands know the importance of monitoring and tracking their churn rate, but Myers had some additional tips on how to make the most of this data.
He explained how brands have a tendency to focus on “initial churn,” that being people who churn out after the first month or two, maybe after getting the sign-up bonus or deal or deciding it isn’t for them. It’s important to note that the type of campaign that is getting you sign ups — whether that be Instagram ads, a mass email campaign, or simply word of mouth — will greatly affect your churn rate.
For example, social media campaigns tend to bring in high traffic, lots of sign-ups, but also a high amount of initial churn. This speaks to the high volume of exposure as well as the fact that customers may see your ad, feel inspired, and make an impulse decision. On the other hand, if you are getting customers through word of mouth or referral marketing, you can often expect a much lower churn rate. Chances are, someone who signed up after a close friend or family member recommended the product will be more likely to give it a serious try.
Myers also emphasized the importance of trying to assess where people most commonly churn in your subscription and creating a tactic to counter that. For example, if you are finding 80% of customers churn after 9 months, there’s a huge opportunity to run a promotion at the 8 month mark incentivizing customers to sign up longer term and get past this mark.
Key takeaway: It's ok to have a high churn rate if you are bringing in a lot of traffic through a mass marketing tactic. However you should be concerned if your high-quality referral customers are churning.
7. Build membership into your subscription.
Metabolic Meals has always called their meal subscription plans a membership. For Halkitis this means offering access to a variety of perks, benefits, useful content, and community access that add value beyond just the product. Their customers view Metabolic Meals as a resource for their lifestyle, rather than just another product.
“People crave membership, and when you can find a way to monetize that, it’s a win-win situation.” – Jay Myers
For Saify, the Liquid Death membership means customers feel like they are part of an exclusive club. The approach they’ve taken with their merchandise and branding strategy is a kind of secret weapon against churn and rising customer acquisition costs. He said: “With subscription we are trying to figure out what membership means to us in a world where customer acquisition costs are rising across the board. For us membership is the counter attack to that.”
Asking customers to “sell their soul” may seem like nothing more than playful branding ploy, but it seriously speaks to Liquid Death's desire to develop lasting and long term customer relationships and grow their recurring revenue.
George thinks a membership mindset approach to subscriptions can give brands a chance at competing with the biggest competitors.
“How do you stop Amazon? Amazon’s going to sell everything you sell for cheaper, and they’re going to ship it faster. You build a membership model, you build loyalty, you build a subscription model that allows you to provide an experience that you can’t get on Amazon.” – Chris George
8. Add a personal touch
When it comes to personalization, Metabolic Meals makes sure their customers feel like they are getting an experience tailored to them. In addition to giving them complete control over their subscription, they have built an AI engine that constantly measures customer behavior to build a rich profile of each individual. The goal is to give customers the option to allow personalized AI data to take care of their order for them.
They also offer a closed Facebook community where customers can talk about products, ask questions to chefs and dietary specialists, and reach out to experts if they need help planning their meals, or inquiring about dietary restrictions or health goals. As a result their customers feel like their opinions really matter because the company listens and develops products based on them. They also offer nutritional content, workouts from brand ambassadors, blogs on ways to better improve sleep, eat healthier, or tackle anxiety. It’s a whole informational experience.
“We’re probably the only food company in the entire world with an article and series on intermittent fasting basically saying “hey eat less food, but also eat this food, because it’s going to give the best experience.” – Trae Halkitis
9. Choose the right model
In our Bold ebook 7 Subscription Models to Master we highlight a number of subscription models, with use cases on which models work best for different industries and situations.
During the webinar, panelists were asked to comment on three popular Food & Beverage subscription models. These included:
- Subscribe and Save
So which model is the best for a food and beverage subscription brand? According to George, there isn’t a best one, but each has its strengths and challenges.
The Subscribe and Save model is one of the most popular for food and beverage because it works well with goods that need to be replenished. It tends to result in the lowest churn and highest lifetime value among all models because it gives customers a discount for buying something they already would be purchasing regularly.
The Curation model, which is where customers provide some information and receive a product curated by the brand, has the advantage of adding surprise and delight to the customer’s day. Customers also love sharing their unboxing experiences online, which gives this model the most potential as far as virality. However, as far as customer churn, this model takes a hit because surprise and delight purchases tend to be the first thing customers cancel when looking to cut costs.
Build-a-Box is similar to the Metabolic Meals approach where customers get to hand pick their own product. This approach is growing in popularity as customers become more comfortable with shopping for goods like food, beverages, and beauty products online. George believes that there is potential in a hybrid approach between Build-a-Box and Curation models, where customers choose some items and have the rest curated, for a best of both worlds approach.
For a closer look at how these different models can work in the food and beverage subscription vertical, check out Setting the Table: Bold’s guide to growing food and beverage subscriptions in 2021 — reduce friction, minimize churn, and deepen brand loyalty across the customer journey.
We did our best to recap some of the highlights and key takeaways from this insightful webinar. If you’re thirsty for more valuable subscriptions insights, check out the entire conversation here.
Looking to add subscriptions to your retail operation or enhance and optimize and existing subscription program? Bold Subscriptions can help. Learn how you can generate more predictable recurring revenue with a customizable subscription program that’s unique to your business.
Have a question about food and beverage subscriptions? Drop a comment below. We'd love to keep this conversation going.