Can Bokksu Go Bigger than D2C?
How do you survive as a subscription box brand? You diversify. That’s the plan Japanese snack and candy subscription box Bokksu has taken, and investors have noticed. The company, which now includes two online retail platforms and a distribution business, raised $22 million in 2022 at a $100 million valuation. So, what’s next? According to CEO and founder Danny Taing, get ready for Bokksu-branded items.
But, I’m getting ahead of myself. Let’s start with a timeline:
In 2015, Taing founded Bokksu and subsequently launched the company’s flagship Japanese snack subscription service in 2016. Available online only, the monthly box includes premium snacks from largely family-run businesses.
After proving there was an appetite for Japanese products, Taing expanded the business in 2018 to include Bokksu Boutique (an e-commerce store for premium Japanese lifestyle products) and Bokksu Grocery followed in 2021. The Boutique ships products directly from Japan and carries more craft, small-batch products, while the Grocery is more of an “Asian version of Thrive Market,” Taing said. Compare The Boutique’s $405 Le Creuset Tsumami Sauce pan to the Grocery’s $8.99 Strawberry Kit Kats, and you’ll see what he means.
Last fall, Bokksu acquired Japan Crate, which sells mass-produced Japanese candy and snacks. By acquiring the company, Bokksu gained not only a new base of subscribers but also distribution in 5,000 retail locations.
While the online businesses are still growing, Taing said, a big part of Bokksu’s current focus is on expanding into brick-and-mortar retail. The channel strategy is playing out in two ways:
Growing Japan Crate’s distribution in grocery (Giant just added a $19.99 Japan Crate in over 150 stores).
Distributing Japanese products to conventional groceries who want more mass produced Japanese items like Kit Kats and Ramen.
“What we've been hearing from a lot of our buyers is that…[they want to sell] things like Pocky or KitKats and such, and they just have not been able to because a lot of that [distribution] has been dominated by traditional Asian food import companies in America,” Taing said. “[Many of those importers] don't even speak English very well and definitely do not have a modern sales process.”
Even if grocers can get these items, he added, often they don’t know what to bring in. Bokksu, meanwhile, has that data and can easily curate a custom product assortment that’s plug and play for a retailer. While American shoppers are interested in Japanese items, there’s still a limit, Taing said, sharing that many of the items you might find on Bokksu Boutique are still a bit “too culturally curious.”
“The first step into mass retail is to use the products people already familiar with,” he added. “Generally speaking, it's like American brands with kind of Asian flavors.”
Currently revenue between the two streams is split roughly 50/50.
But neither of these options works in natural and higher-end grocery. So what’s next? Think branded Bokksu food items. Coming in 2025, the line will have a premium focus. One example Taing gave me was a gourmet mochi.
2025 is still a ways off, so why the long runway?
“We're going do it in a way that's not as over committing…it’s a step process where we got retail distribution first via the box, [and] then via being a general Asian food retail distributor,” Taing said. “It [will be] a small part of our business.. [but] the idea is to have more of that competitive moat, so new products and retail would be another way.”