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The Rise of the Subscription Model in the FMCG Industry
The UK subscription box market is expected to reach £1.8 billion by 2025, up 34.7% from 2020. As consumers increasingly seek value, quality, variety and convenience, more brands from the FMCG sector are giving the subscription model a go. Discover more about their experiences in our blog.
June 17, 2022
6 mins read
Celeste Rivas
Between work, the commute, family and social lives, modern living is getting busier. Consumers are increasingly looking for more convenient ways to shop for essentials such as food, drink and hygiene products. As a result, subscription boxes are soaring in popularity.
In the UK, the subscription box market is estimated to be worth £1.8 billion by 2025, up 34.7% from 2020, with just under 30% of shoppers currently subscribed to at least one of these services.
Hastened by the pandemic lockdowns, FMCG brands have emerged as particular successes here. The industry’s subscription model growing steadily for over a decade, particularly in male grooming and food and drink services.
The latter segment grew markedly during the pandemic in the UK, with its market value expected to reach just under £729 million by 2025, up from £521 million in 2020.
But why is the FMCG subscription model so popular, and what can we learn from successful brands who have benefitted from this? Let’s explore the rise of the subscription model in the FMCG industry to learn more.
Why consumers choose subscription boxes
There are a number of reasons behind consumers’ decision to sign up for subscriptions, but value for money remains their top priority.
62% of subscribers report that price points are their main motivation to sign up for a subscription service – and it’s also the top reason to cancel a subscription.
Many brands seek to highlight this by focusing on the freshness or source of their products, particularly in the case of vegetable and fruit boxes. Others look to sign-up-specific special discounts or an emphasis on the potential time savings their subscription boxes could provide.
However, price alone is not enough to attract consumers.
The high quality of the products, a good variety of items or experiences, and convenience also ranked among the most common motives driving them to choose subscriptions.
Beyond this, some consumers also value the more playful aspects subscription boxes can offer. Access to fun items or experiences, as well as the possibility to customize orders, were also among the top ten reasons to sign up.
In the same vein, offering the opportunity to remove or add items to suit customers’ tastes or routines better, or adding surprise extras from time to time, can be a good way to attract and retain customers.
Vita Coco: taking their subscription model direct to the consumer
With an offering spanning a range of coconut-infused products, Vita Coco launched in the US in 2004. After partnering with THG Ingenuity to enhance its direct-to-consumer website in 2020, it now operates in 54 markets.
To get its broad product offering to a wider audience, Vita Coco offers a subscribe-and-save scheme that lets consumers save 20% on their first order.
Products are delivered every one to four months according to customer needs, and subscribers have the flexibility to pause, cancel or skip at any time.
With its products both vegan and organic, Vita Coco also takes its environmental and sustainable credentials further by supporting coconut farmers and their communities across the world.
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