CEO Aihui Ong adds that Love With Food also benefits brand manufacturers by doubling as a market research firm and generating substantial social media and marketing buzz that far exceeds that of traditional in-store sampling
“We are trying to replace the traditional sampling process, which can be inefficient” in part because it’s reach is geographically limited, it involves multiple middle men and can include excessive costs and fees, Ong said.
She explained that unlike retail stores that often charge manufacturers a fee for in-store demonstrations, Love With Food does not charge manufacturers to include their product in one of its monthly subscription boxes, which are tailored to subscribers tastes and include eight to 20 other natural and organic snack samples depending on which of the two box sizes priced at $10 and $17 per month the consumer orders. Love With Food also offers a gluten free subscription box with eight to 12 snacks for $24.50 per month, which can help gluten free product manufacturers directly target their niche consumers.
Nor do manufacturers need to pay the upwards of $300 necessary to set up and staff each in-store demonstration, added Ong, who emphasized the subscription boxes also have a broader reach because they are distributed nationally and not confined to store locations.
Rather, Love With Food costs manufacturers only the price of free samples, which often ranges from 10 cents to 30 cents per product, Ong said. This comes out to a savings of about 70% compared to the traditional model, she added.
Ong said when she started the subscription business three years ago she wanted to keep the cost as low as possible for food manufacturers because she saw first-hand how expensive and difficult it is to start a food company. A friend invested her life savings in a stir-fry sauce business only to fail because the cost and barriers to entry were too high.
Knowing how difficult it is to gain national distribution, Ong said Love With Food offers manufacturers a chance to sell products through its e-commerce website and it provides to consumers contact information directly to manufacturers’ websites if consumers want to order more products after trying them in the sample box.
Market research
Love With Food also supports manufacturers by soliciting and analyzing subscribers’ reactions to the snacks in the box as well as their opinions about potential new product launches and other line extensions that manufacturers are considering, Ong said.
She noted that for an additional fee, Love With Food will work with manufacturers to create questionnaires to effectively gather consumer insights on brand awareness, likes, dislikes and suggestions for improvement, which can be difficult to keep track of during in-store demonstrations.
In general, Ong said, about 15% of consumers respond to Love With Food’s questions and provide feedback on the snacks they sample, “which is more than enough for a sample size” that is comparable to a traditional focus group of 30-50 people. In exchange for participating, Love With Food offers subscribers points that they can then spend in the e-commerce store to order additional snacks.
The reports, which include feedback gathered over three months, cost manufacturers $7,500, which is about half the cost of one focus group, Ong said.
She noted that the information in the reports can be invaluable for start-ups which are still tweaking their products and packaging, allowing them to get consumer feedback before investing in a large run.
Marketing buzz
Finally, participating in the boxes generates substantial free advertising online for manufacturers, Ong said.
She explained that many consumers post about the snacks on You Tube, Pinterest, Instagram and other social media platforms when their boxes arrive. In addition, Love With Food will promote the products on its Facebook page and other social media accounts, which Ong notes “live online forever, unlike a paid advertisement that would go away when the budget is done.”
Tapping into consumer interest for conscious capitalism
As more consumers expect an element of conscious capitalism from companies, manufacturers also can benefit from the halo of Love With Food’s charity involvement.
The subscription box service donates a meal to a food bank in America for every box or product that consumers buy, which translates roughly to a donation of 10 cents to 20 cents per box depending on the food bank, Ong said. She explained that the company donates money, not actual meals, because it is a more efficient way to feed the most people possible.
Ong said she added this component to her business after she discovered that one in five children in the U.S. are underfed daily. So far, she said, the company has donated enough money to pay for 400,000 meals and that it doubles its donations during times of need, such as a natural catastrophe.
A recipe for success
While Ong would not share how many subscribers order Love With Food boxes each month, she noted the business is growing rapidly, which is an indicator of the type of reach the company can provide.
Specifically, Love With Food had revenues of $250,000 in its first year in 2012, during which time it was “figuring out a lot of things that worked for the brands and consumers,” Ong said. After that, revenue jumped to $1.6 million in 2013 and $3.2 million in 2014, she said.