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Baltimore companies jump on the subscription box bandwagon

Subscription boxes call to Baltimore companies -- and their customers

Once a month since October, Vanessa Kreckel's children have awaited a box that's delivered to their doorstep in Philadelphia. They know it will be packed with a surprise dessert recipe and all the premeasured ingredients needed to bake it.

Kreckel, a mother of three, is testing out Happiest Little Baker, a new Baltimore-based subscription box designed for kids to bake treats from snickerdoodle bars to chocolate surprise cookies. Founded by Lindsey and Mike Maurath, the boxes are designed to bring families together for some quality time in the kitchen.

"It's a really cool idea for kids who sort of love to do things in the kitchen," Kreckel said. "It's a fun way to do something with them that takes little effort."

Happiest Little Baker is among the Baltimore companies getting in on the craze for subscription boxes — the successor of sorts to the wine-of-the-month and fruit-of-the-month business model. They often feature multiple products. Some Baltimore-area retailers have begun launching monthly subscription boxes to supplement their existing sales, and others are establishing entire businesses based on the model.

Newcomers are jumping in just in time for the holidays. Mallow Crunchies, a White Marsh-based rice crispy treat maker, started offering subscription boxes on Black Friday. Owner Nikki Lewis sees it as another way to reach her online customers, three-quarters of whom live out-of-state.

"We have a lot of online customers who just order repeatedly, so we figured we'd do it as a convenience for them," she said.

Mallow Crunchies has a three-month minimum subscription period for customers who join its Mallow of the Month Club. Subscriptions start at $25 a month, and each box contains either six Mallow Crunchies, the Rice Krispies-style treats the company is known for, or three bags of Mallow Softies, Lewis' homemade marshmallows.

In addition to reaching more customers nationally, Lewis said subscription boxes give Mallow Crunchies a chance to experiment with flavors and get feedback before making new treats in larger batches. Bananas foster, strawberry shortcake and pretzel chip are among flavors she wants to test out.

"I've seen different companies do it and do it successfully, and I think it's such a good source of revenue that a lot of people haven't tapped into," she said. "We are always looking for ways to grow our online business and until the subscription box it was just a one-time sale."

Pikesville-based Maryland Box is another local company that's starting to offer subscription boxes in time for the holidays. Founder Norlene Gensler has been in the gift basket industry for years, and recently began packaging Maryland-themed gift boxes.

She's adding the subscription option this month, starting with two types of boxes: a ginger-themed box featuring items from Cathy's Ginger Spices, and a box with items all made by Maryland women. The Made by Maryland Women box has products ranging from Carla Hall Petite Cookies to Copper Pearl Chocolates. Both are $39.99 a month.

The subscription box model started gaining momentum several years ago, attracting players such as Birchbox and Julep, which offer monthly assortments of beauty products, and alternative grocers Blue Apron and Hello Fresh, which ship meal kits.

The boxes have become successful alternatives to traditional retail. Mary Brett Whitfield, senior vice president of market research firm Kantar Retail, said part of what makes subscription boxes popular is their curation and catering to individual customers. The element of surprise is a strong selling point, too.

"They're really helping [shoppers] kind of weed out all the alternatives and focus on the things that are most specific for that shopper," she said. "[For] others, it's more just sense of discovery and whimsy that can be enough."

The discovery aspect is part of the reason Matt Silverthorne continues to subscribe to B-More Box, which packages monthly boxes full of products made in the Baltimore area. He first bought a three-month subscription in December 2014 as a Christmas present for his wife, and he's renewed the subscription twice.

"What I like about it is it's promoting small businesses in that area — ones I never realized existed," he said, noting a few favorite products they've received in the boxes like Mouth Party Caramels, candles from Annapolis Candle and decor by Plak That.

Whitfield said she expects the number of companies offering subscription boxes to continue to grow.

Birchbox, the beauty box company that helped spark the subscription trend when it was founded in 2010, for example, has more than 800,000 subscribers to the $10-per-month box. And that's just for one company in a field of thousands. According to a May report from the Fung Business Intelligence Centre's Global Retail and Technology division, the top 10 startups in subscription-based retail have raised more than $543 million in the last five years.

The model is alluring for startups because the cost of setting up a business is so much lower than opening a brick-and-mortar shop, and inventory is more predictable, Whitfield said. For established retailers, subscription boxes provide one more avenue to reach customers.

"For entrepreneurs who are passionate about something — a category, an idea, a topic — it's a very attractive business model to combine something you love with a business," Whitfield said.

That's how Happiest Little Baker, which shipped out its first batch of boxes Oct. 1, came to be. Lindsey Maurath was looking for a change from her corporate job and wanted to do something with baking, but she didn't want to open a bakery. The box model gave her a way to combine baking, a family pasttime, with a business. Boxes start at $32 per month.

Many of the recipes she puts together have been in her family for several generations — she grew up baking with her grandmother — and others are her own creations. Happiest Little Baker's signature box includes the ingredients and recipe for "chocolate surprise cookies," her grandmother's recipe with layers of chocolate, marshmallow and frosting. Last month was snickerdoodle bars.

"They're spilling flour everywhere and it's fine," Maurath said of baking with her kids. "It's a really great way for us to just put our iPads away and turn the TV off and kind of come together as a family."

In contrast to other subscription boxes Kreckel has tried, such as Birchbox or the canine-centric BarkBox, the experiences that come with Happiest Little Baker boxes are what keep her subscribing.

"It's really fun because it's just what they say — you're kind of making memories instead of getting cool beauty boxes," she said.

While Happiest Little Baker declined to disclose the number of subscribers it has, it is small enough that the owners are packaging their boxes themselves. But even some local box companies that have been in business a bit longer are still packaging everything by hand. That's the strategy Cory Shaffer still takes, and he founded B-More Box more than a year ago.

B-More Boxes, which start at $20 per month, include three food products and three pieces of art, apparel or memorabilia, all Maryland- or Baltimore-themed — think Otterbein's Cookies, sauces from Baltimore Barbecue Co. or the Mouth Party Caramels Silverthorne likes so much.

The company partners with about 40 local vendors, and Shaffer said it has about 100 monthly subscribers on average, though orders can double during the holidays. Most of his customers are in Maryland.

Shaffer was drawn to the subscription box model for its reliability, and he hasn't encountered too many glitches in his first year.

"One of my worries was: Will we have enough stuff?" he said. "If so, will people continue to enjoy that stuff?"

So far, Shaffer said he's been pleased with duration of his customers' subscriptions. Most of his clients stay with the subscription for six or eight months.

"Pour your heart into it and do your best," he said. "Then your customers will stick with you."

smeehan@baltsun.com

twitter.com/sarahvmeehan

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