Food and Beverage Subscriptions Struggle to Retain Members

Food and beverage subscriptions see disproportionate churn relative to other industries as consumers rethink which recurring payments they really want or need and which they could do without.

By the Numbers

Research from PYMNTS’ April study, “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” created in collaboration with sticky.io, which draws from a survey in February of more than 2,200 consumers with retail product subscriptions, found that food and beverage subscriptions underperform relative to other kinds of product subscriptions.

Specifically, merchants’ index scores — a measure that factors in acquisition and retention — averaged 55.5 across industries, while food and beverage subscriptions averaged 54.3. These subscriptions actually slightly overperform in driving signups, but they struggle to hold onto the customers they have.

The Data in Context

Some subscription businesses are now looking for ways to drive sales without demanding that kind of commitment from consumers.

Blue Apron, for one, is turning its focus to its lower-effort Heat & Eat meals and to sales channels that enable consumers to make purchases without committing to a regular subscription plan. The company announced last month that it is expanding its partnership with DoorDash’s direct-to-consumer (D2C) convenience store DashMart to 11 markets, including New York City. The move follows a pilot program in Philadelphia.

“These types of strategic partnerships are an important market opportunity for us to expand our reach and provide customers with access to our products without a subscription,” Blue Apron Senior Vice President of Physical Product John Adler said in a statement.

Many meal kit providers are looking for more flexible purchasing modes.

“What meal kits were based on was this sense of convenience — we solve the what’s for dinner question for people,” Julie Marchant-Houle, U.S. CEO of multinational meal kit company Marley Spoon, told PYMNTS in an interview last year. “[Now], we’re seeing expansion into different meal occasions; we’re seeing a demand for ready-to-eat meals across the industry; we’re seeing even more and more brands looking to offer incremental items that could be added to the basket. So, I think convenience is a big theme that has it just continuing to accelerate.”