Subscription Brands Deliver for Consumers

Subscription Brands Deliver for Consumers
Winc subscription boxes start at $39 a month

For consumers stuck at home during the pandemic, a surprise delivery box just might be the thing that lights up their day.

Culver City-based Awesome Office Inc. fills boxes with snacks while Playa Vista- based Club W Inc.’s boxes show up on doorsteps loaded with bottles of wine.

Both companies offer delivery and subscription services and allow customers to either curate their own boxes or let the companies make the selections. For many, the boxes usually arrive at an expected time, but what’s inside is unknown.

Demand for subscription boxes has seen a huge uptick during the lockdown, the companies say.

Awesome Office, doing business as SnackNation, set out to supply corporate clients with snacks for their workplaces. While the company does offer services to individual consumers, B2B sales account for 80% of the company’s revenue, according to Chief Executive Sean Kelly.

“Snacks were becoming more like coffee. Offering free coffee in the office was somewhat novel. Today, coffee is purely table stakes,” Kelly said.

While office buildings are largely empty because of the pandemic, SnackNation’s B2B business has continued and even grown as it has shifted deliveries to homes, the new workplace.

Kelly said the company spent six weeks to develop a platform that allows employers to manage orders for each employee, including uploading addresses and setting budgets as well as the frequency for delivery. “It’s a completely customized program. Most members do monthly, but that’s certainly not set in stone,” Kelly said.

SnackNation now delivers in all states. It has an in-house team to handle logistics in Southern California and uses FedEx Corp. services to ship boxes to other regions, Kelly said.

He added that the company has been able to maintain the per-person cost for home deliveries at the same level as office delivery, thanks to the scale of its business. The company has acquired more than 1,000 new corporate clients since mid-March.

SnackNation’s B2C sales, meanwhile, have tripled during that time, Kelly said.

Wine subscription company Club W, branded as Winc, has seen an increase in customers, too.

The company reported 96,000 new clients in March and April, marking its two highest customer acquisition months. Orders in March and April more than doubled from the same period last year, it said.

Customers can subscribe to a monthly Winc order that starts at three bottles for $39, plus a $9 flat shipping rate and tax. The shipping fee is included if more than three bottles are ordered. Bottles start at $13 each, according to the company.

First-time customers are asked to complete a palate profile quiz with questions like, “How salty do you like your food?” and “How do you feel about berries?”

A company spokeswoman said Winc’s algorithm makes initial wine recommendations for customers based on their answers to the quiz. The algorithm will make more personalized recommendations as customers continue to rate their wines, she said.

The company, founded in 2011, started out selling other brands’ wines. It began making its own wine in 2014 and launched its wholesale channel in 2015, which now distributes bottles of wine to retailers and restaurants in 48 states.

Chief Executive Geoff McFarlane describes the company as a “data-driven winery” that leverages customer ratings and feedback to inform its winemaking decisions.

“We believe that due to the accelerated growth in ecommerce, we will continue to see new customers discover wines that they love digitally,” McFarlane said in an email.

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