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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.

Carrots, squash, purple sweet potatoes, ginger and squash seeds on a red background.

How FMCG companies are using the subscription box model: examples

A growing number of FMCG brands are capitalizing on their growing popularity of subscription boxes. With reduced customer acquisition costs, easier revenue predictions and stronger customer relationships, the benefits are clear to see.

For some inspiration, let’s look at three FMCG brands that have successfully launched a subscription model.

Smol: embracing subscription for sustainable cleaning

Launched in 2018, this cleaning product subscription service caters to those shoppers worried about the future of the planet – a growing concern among FMCG consumers.

With sustainability and eco-friendliness at the heart of its business, Smol offers a range of vegan, cruelty-free products. The range is extensive, spanning laundry and dishwasher detergent, fabric conditioner and surface sprays, all dispatched in either 100% plastic-free packaging or refillable bottles made with recycled plastic.

Smol also tracks how many tons of plastic and chemicals were saved by customers switching to the brand, as well as the corresponding reduction in carbon emissions.

Subscribers can choose separate products or a starter kit that includes different items and can get a taste of the service by signing up for a free trial. Once they’ve signed up, they get regular deliveries that can be adjusted, paused or cancelled if needed.

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.

Vita Coco products on a light blue background.

Oddbox: reducing food waste with subscription boxes

With the goal of reducing food waste by rescuing misshapen fruit and vegetables unwanted by supermarkets, Oddbox offers boxes with produce, mainly from UK farms, to be delivered every week or every other week.

The service allows subscribers to personalize their orders, with the option to exclude up to three items in each order. If this is done in advance, Oddbox promises to surprise other customers by including other products.

The food waste business also gives customers the opportunity to further customize their orders by letting them include add-ons – or “extra-special, last-minute rescues” – to their box for a small cost. 
Just like Smol and Vita Coco, Oddbox offers subscribers the possibility to pause, cancel or skip a delivery with ease.

Oddbox, which has recently expanded into Scotland, is another green-minded business, listing on their website the amount of produce rescued from going to waste, the liters of water saved and the carbon emissions that were cut.  

As consumers increasingly look for alternatives to their local supermarket to get their everyday essentials, be it in the search of value, quality, variety or convenience, many FMCG brands are embracing the subscription model to satisfy these needs.

For a subscription model with confidence, FMCG businesses need the right partner to get them there, one that can ensure that everything, from first click to last mile, works as it should. Ingenuity is that partner.

With a global commerce platformfully integrated digital services, global fulfilment and delivery, and a unified technology stack, we’ve helped FMCG brands such as Vita Coco and Hotel Chocolat optimize their direct-to-consumer (DTC) offering and reach new audiences effectively.

Get in touch with us today and find out how we can support your brand’s DTC journey.



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