Recipe for a Successful Food and Beverage Subscription Website

Camila Gómez

September 10, 2022

America loves home delivery. Why go to the store when you can access it from your computer or your phone? While these other forms of home delivery have been skyrocketing in popularity, none has surpassed America’s love affair with subscription boxes. Some of the most popular subscription boxes are for food and beverages.

Some Interesting Stats About Food and Beverage Subscription Services

McKinsey reports that subscription box revenues grew from $57 million in 2011 to $2.6 billion in 2016. Those are eye-popping numbers. The 2016 number is over 45 times the 2011 number. That’s growth that occurred in only five years.

Statista reports American consumers spent $74 per month on meal kit boxes in 2020. Outside of meal kits, other popular subscription boxes include:

Clothing
Technology
Alcohol
Personal care
Pets

The most popular retail subscription services, according to McKinsey, are Amazon’s Subscribe and Save and the Dollar Shave Club.

Curation subscribers make up 55% of all customers for subscription services. This type of subscription personalizes the products to each consumer’s taste. This differs from services such as Amazon Subscribe and Save, which is only for replenishment. That subscription automatically maintains the normal amount of some basic supplies.

Access subscriptions grant consumers access to certain services or media.

Netflix and other streaming services are access subscriptions. Similarly, Amazon Prime free shipping, Instacart+ free delivery, and DashPass free delivery for DoorDash are access subscriptions.

Mckinsey reports that 28% of access and curated subscribers require a personalized experience. Whereas 45% of replenishment subscriptions last at least 12 months, only 35% of access and curated subscriptions last so long. The reason for this is obvious. Access and curated subscriptions are more taste-driven, whereas replenishment subscriptions are need-driven and convenience-driven.

The average subscription box subscriber is between 25 and 44 years old. They earn between $50,000 and $100,000 per year. While 60% of subscription box subscribers are women, men have more active subscriptions on average.

Keeping customers is the greatest problem for subscriptions for perishable products. These include items like meal kits. The cancellation rate is 40% across subscriptions for all services. But in the first six months for a meal kit subscription services, the cancellation rate can be as high as 70%.

Start Selling Your Products As Subscriptions

As you can see from the statistics, you should be concerned about some aspects of the business. That’s why it’s critical that you pay attention to the strategies the most successful food and beverage subscription services have used to overcome issues like high cancellation rates.

One way to avoid the risks involved with a food subscription business is to use a great software provider. Subscriptions Cloud is a provider that knows all the best tips for subscription business owners. We can show how to make a subscription website that will boost revenues.

You may want to read:
10 Tips to Prepare Your eCommerce For a New Holiday Season

Clearly Explain Products and Subscription Plans

One company that does a great job of explaining its products is Amazon. You could go to a store and read all the information on a product’s box before buying it. Or, you can go to the Amazon website and get far more detail about the product. You can see videos of the product and pictures from multiple angles.

It’s critical for consumers to have a good understanding of any product. It’s far more important for food. Subscribers want to know all about nutrition and ingredients. Often their very reason for using a food subscription service is to have convenient and nutritious food. Nutrition is something they aren’t getting with fast-food outlets.

Subscribers will try your product if it looks like it will taste good and it meets their other requirements. That doesn’t mean you’ll keep them as a subscriber. You could have the most nutritious meals available, but even a marathon runner won’t remain a subscriber if the meals don’t taste good.

Other critical information your potential subscribers demand includes:

Cooking and preparation instructions
Information about shipping and packaging
List all potential allergens in the food

Shipping is usually an overlooked item for merchants. Customers need to know if you use FedEx, UPS, the postal service, another shipper, or some combination. You’ll waste your time and money with a free trial subscription if you use the shipper mentioned in this article.

Different shipping companies have different levels of servicead and areas. Even if a customer has to pay extra to avoid a bad shipping company, it’s better than losing the it. Of course, if you are a big company like Amazon, you can afford not to listen to your customers regarding shipping. If you’re a startup, you don’t have that luxury.

Similarly, if a customer can’t determine whether a package has something they’re allergic to, they will not order. If they can’t see the cooking instructions, they often won’t order. Maybe they want something they can cook in a microwave oven. They need to know if that’s an option.

Get Personal With Subscribers

As mentioned above, 28% of customers for curated subscription services demand personalization. If you’re in the food and beverage subscription box business, you fall within the curated category. What is personalization? Think of when Netflix recommends a movie based on other movies you’ve watched. That’s personalization.

Personalized Products and Plans

How are you going to make personalized recommendations that are accurate? You can’t — at least until you have enough data on the customer. Once you see items the customer chooses repeatedly, you’ll have a baseline to make recommendations.

Wouldn’t it be nice if there were a way to jump start the recommendation process? You’re in luck because there is. You could develop an online quiz that can help you understand each subscriber’s taste from the start.

What questions should be on this quiz? One of the most important questions is whether they’re on a special diet. Do they prefer a Keto diet or a Mediterranean diet? Are they vegan? Do they follow strict kosher rules? Another critical question is if they’re allergic to anything.

So, you have all the data you need to make recommendations. You even know that the subscriber’s favorite wine is pinot noir. Is there anything else you can do to increase revenues? Yes. You can cross-sell.

Cross-Sell With Recommended Product Pairings

You know your customer prefers pinot noir among red wines. Pinot noir is a very flexible wine, so you’ll have a lot of choices. You know the customer isn’t vegan and doesn’t follow kosher rules. So, you recommend a pork dish or filet mignon to go with the wine.

There are an infinite number of cross-selling opportunities. If you aren’t cross-selling, you’re letting a lot of revenue slip through your fingers.

Allow for Flexible Self-Management via a Customer Portal

Customers give up a lot of control when they subscribe to a food and beverage service. They do this for convenience. But, when they want to make a change, they need a self-service portal so they can do so, just as easily as the new subscriber process was for them. This expectation even applies to cancelations. Mastercard and Visa now require online subscription companies to have online cancellation.

Subscription management in a customer portal needs to provide the subscriber with a lot of flexibility. They need to be able to set the frequency of deliveries. They may have originally been a weekly subscriber, but their financial situation has changed. That may require them to switch to a monthly subscriber. The more frequencies options you have, the more customers like it.

With Subscriptions Cloud, your subscribers can choose any frequency you wish to allow. Some examples include:

Monthly
Weekly
Daily
Twice a week
Twice a month
On-demand one time purchases

You have control over what you offer with our app. But frequency of delivery is the flexibility functionality you need. Subscribers are able to:

Pause their subscription
Restart their subscription
Change their subscription
Skip a delivery

And, all this functionality must be easily available in their customer portal. Giving them all this control makes it much more likely they’ll maintain their subscriptions. If a customer feels they’ve lost control of the subscription, they’re far more likely to cancel.

We provide you with state-of-the-art functionalities. We built our systems for BigCommerce subscriptions and our system is powered by Square subscriptions.

Conclusion

To start food and beverage subscriptions apps, you need a subscription software provider that has the experience to guide you away from the pitfalls — such as high cancellation rates.

Subscriptions Cloud can do this for you. We know how to keep your subscribers happy; we’re the right app integration.