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Blue Apron Plummets After Amazon Files for Meal-Kit Trademark
- mi100hael 9y agoThis was bound to happen. A lot of financial analysts have been saying for a while that Blue Apron is a good idea that will be successful under different circumstances. Right now, Blue Apron's cost to attract and retain customers is astronomical and ripe for a competitor like Amazon to undercut.
- DaiPlusPlus 9y ago...especially with Apple's acquisition of Whole Foods.
- elthran 9y agoAmazon, not Apple
- butterfi 9y agoThis seems unsavory to me (pun intended). Would the trademark take away Blue Apron's ability to operate?
- monocasa 9y agoIt signals Amazon's entry into the market.
- butterfi 9y agoBut no actual impact to Blue Apron, other then a 500lb gorilla wanting your lunch?
- hellcow 9y agoAmazon is in a much better position to win the market, and investors recognize that. Amazon has a logistics network capable of doing same-day delivery at lower-than-Blue-Apron's costs. Amazon will ship locally rather than cross-country using dry ice. Purchasing ingredients in Whole Foods' massive quantities will lower costs further. Coupling that with their huge warchest, Amazon can crush Blue Apron by offering a competing service at far below cost for years. If Amazon plays this as aggressively as they did eCommerce, I don't see any way for Blue Apron to win on their own.
- csydas 9y agoIt indicates that a competitor Blue Apron can't hope to compete with is ready to compete. Amazon has everything to hit the ground running and more, and with everyone knowing Blue Apron is bleeding to get customers, it means that investors aren't going to be throwing money their way. With Echo being as popular as it is, it's a natural addition to the Echo Ecosystem; undoubtedly Alexa is about to become the world's best sous chef. As has been pointed out, Blue Apron fails to mark its territory in any meaningful way and only had power from first movers advantage. That power is gone now.
- gruturo 9y ago> This seems unsavory to me (pun intended). Would the trademark take away Blue Apron's ability to operate? My understanding is that this is a strong suggestion that their niche is being invaded by a formidable player.
- ClassyJacket 9y agoIt's a trademark, not a patent. It's for a name.
- ProAm 9y agoA meal kit from Amazon sounds gross.
- gberger 9y agoWhy?
- jbob2000 9y agoProbably for the same reason I don't shop for groceries at Walmart. Both brand images are associated with cheap crap. I don't want to eat cheap crap.
- jimmaswell 9y agoSince when does Amazon have an association like that?
- eropple 9y agoI wouldn't say Amazon does at all. Even their cheaper stuff, like AmazonBasics, is pretty solid. The companies on their marketplace, on the other hand...well, I dunno how effectively other people really divorce Amazon from "Amazon sellers", so maybe the earlier poster has a point.
- jbob2000 9y agoSince their site was full of knock-offs and half of it ships from China? Every time I shop on Amazon, I have to cross-reference with like 8 different sites to make sure I'm ordering the right thing and that the price is fair.
- erik-g 9y agoYou don't _have_ to shop on Amazon. But I feel like being a cognizant consumer is your own responsibility. By that I mean I don't have to cross-reference with 8 other sites, I feel like the prices are fair, and as best I can tell I have avoided buying cheap knockoff items. I hear this complaint a lot (here, especially) but have yet to see much evidence of that.
- jonknee 9y agoIt would be a great fit given that the main challenge is logistics which Amazon is already a leader in. With Amazon Fresh they even have the ability to pick up the previous week's boxes and cold packs (along with delivering the rest of your groceries at the same time!). Blue Apron spends a fortune acquiring new customers, possibly up to $460 per sign up as of recently [1]. I bet the percentage of Blue Apron subscribers that are also Prime members is amazingly high. Amazon doesn't have to pay a dollar to advertise to these people, let alone $460. [1] https://www.recode.net/2017/6/1/15727182/blue-apron-ipo-s1-analysis-customer-acquisition-marketing-churn https://www.recode.net/2017/6/1/15727182/blue-apron-ipo-s1-a...
- dtien 9y agoAnd possibly the ace in the hole, the Whole Foods aquisition. Local distribution centers via the whole foods stores, with fresh foods, even with premade foods if you wish. Could ultimately be a blue apron/munchery hybrid. Their advantage would of course be their world class distribution/fulfillment tech, but also the fact that the costs of the food parts are mostly sunk already into the Whole Foods biz.
- petra 9y agoI agree. The munchery/whole-foods combo is the ace here. They only need to figure out meals that last 7 days (chilled) with natural ingredients only, but since freshly(acquired by nestle) did it, it's possible. Or maybe there's some patent here, and it's really hard to achieve otherwise, and that's why nestle bought them.
- notyourday 9y agoAs I have said before with Amazon eating Whole Foods meal kit companies that are not currently ramen profitable are toast. Ramen profitable companies would have to learn how to grow out of their cash flow. No sane investor would be pumping money into them until they know what and how Amazon would be looking at this market. I think over next few years we would see a total implosion of meal-kit industry with the exception being whoever operates Whole Foods on a national scale. On a regional level grocery stores and small grocery chains would offer the local meal kit service as for them the costs of expanding into that market locally is tiny.
- calafrax 9y ago> I think over next few years we would see a total implosion of meal-kit industry I don't think so. Meal kits are a niche business fighting against mass market competitors already so nothing changes with the Amazon entry. If anything having an established player like amazon advertising meal kits increases market awareness and gets people interested. No one is going to have a monopoly of the food business, ever. It just doesn't work that way.
- ghaff 9y agoPretty much agree. I think it's more: - Grocery delivery seems to generally be gaining a bit of momentum in the US, at least close in to major urban centers, as a lot of people get more and more comfortable with buying things online. - Grocery chains are beginning to take notice of meal kits. Most of them already sell a fair bit of prepped but uncooked food. Creating packaged bundles with a recipe card is a pretty small incremental step.
- rednerrus 9y agoAmazon is going to have giant advantages which will allow them to push the prices through the floor. The only thing that Blue Apron had going for it was the fact they had a giant markup on their product. Amazon now has regional distribution centers in every major city. They have a network of vendors, they have a fleet of delivery trucks and contract drivers. Blue Apron is F'ed.
- 9y ago
- randomf1fan 9y agoThis was inevitable. I wonder how Blue Apron is planning to compete.
- chinathrow 9y agoHonestly, WTF Bloomberg and their auto play videos.
- 0xCMP 9y agouMatrix has been a blessing for me. Block everything until you need it. I'd rather have the web broken than let them do whatever they want.
- pera 9y agoPlease Amazon, do something different about the huge amount of material waste generated by companies like Blue Apron and Hello Fresh. This is the main reason why I stopped using these services, the footprint is just disgusting: plastic bags inside aluminum+plastic bags inside cardboard boxes with more plastic. Please, invent some form of reusable container that can be easily stored and delivered back so we can stop trashing the Earth.
- calafrax 9y agoThe packaging waste with some meal kits is a negative but they also eliminate a lot of food waste which is a positive. The traditional food distribution system is massively wasteful but all of that waste is hidden so it is easier to ignore.
- erik-g 9y agoHow does meal-kit distribution eliminate a lot of food waste?
- notyourwork 9y agoBecause the ingredients provided are the exact amounts needed for a meal. If I was making the same meal doing my own shopping I will probably purchase slightly more than I need of some perishable ingredients. These will in a lot of kitchens end up as waste and not used in other meals.
- vdnkh 9y agoLeftovers?
- notyourwork 9y agoOne word answer's with a question mark are usually always the answer, thanks for contributing to the conversation.
- 9y ago
- bearton 9y agoI've tried a few meal kit companies (blue apron and hello fresh) and I was underwhelmed by the product and the service. Whole Foods ingredients + Amazon delivery = game over for most of these meal kit companies. They would be able to provide users added levels of customization and probably same day or next day delivery whereas with most meal kit companies, you have to lock in your menu for the week the prior week, which is inconvenient if plans change. Ultimately, I'm excited about this move as I shop at whole foods regularly and look forward to the ease of delivery that Amazon provides. I wonder where Amazon will target next; they've already targeted grocery and meal kit delivery and revealed plans to compete with Zillow and Redfin this week in real estate. Which industry is next?
- 127001brewer 9y agoAn article called "The Slow-Motion Trainwreck Facing the Meal-Kit Industry" relates how the meal-kit industry faces the same problem(s) as Groupon: "The problem Groupon faced was that their initial success validated a model that anyone could copy, and everyone who copied it increased both Groupon’s cost of customer acquisition and its churn rate." https://medium.com/@byrnehobart/the-slow-motion-trainwreck-facing-the-meal-kit-industry-345f14df45ad https://medium.com/@byrnehobart/the-slow-motion-trainwreck-f...
- acchow 9y agoWait, isn't this how capitalism works? Can someone explain what I'm missing here?
- ams6110 9y agoYes, ideally in a competitive market for something that is a "commodity" type of good, profits fall to (near) zero. Not what VC investors are looking for.
- tim333 9y agoIndeed https://news.ycombinator.com/item?id=14646679 https://news.ycombinator.com/item?id=14646679 315 comments
- stevewillows 9y agoThis was heavily predicted around here, and seems like a natural direction for Amazon (with very little effort.) It'll be interesting to see who else steps into this market. Hopefully there will be a focus on local pick ups to eliminate even more of the footprint. Ideally we'd see something similar to the CSA shares where you get a rubbermaid bin once per week with everything packed in something similar to Mason jars (with an initial deposit to ensure people are playing along.) This is a fantastic opportunity for local supermarkets and grocery stores to dedicate a section to 'What's for dinner?' -- where all of the ingredients are grouped together with a small recipe card and a link to a video, or something along those lines.
- rednerrus 9y agoThis is why Amazon purchased Whole Foods. I've been trying to get my regional WF competitor (New Season Market) to do these meal kits and have them delivered with Amazon Prime for the past 18 months. They could have killed this game and without all of the wasted packaging. I am going to continue to chip away at them.
- s0rce 9y agoNew Seasons is great, there has been one in the progress of opening across from my office in Emeryville (East Bay - SF Bay Area) for the past year.
- lubujackson 9y agoAs someone who has used and enjoyed meal kits (Good Eggs, not Blue Apron), I don't think this is a slam dunk for Amazon. Meal kits are a lot more than recipes and portioning. I have 2 small kids so meal planning is hard to do consistently. I can whip up a chicken breast and veggie, but what I get from Good Eggs is seasonal recipes and fresh produce sourced directly from local farmers PLUS prepared elements including marinated meat and sauces. So when I cook a meal kit I'm getting a much better meal (more like a dinner party meal) for about the same effort as a barebones meal I would make otherwise. I have used Instacart and bought prepared stuff from Whole Foods, and there just isn't a comparison. In SF, I often get or see old/bruised produce in Whole Foods which used to be consistently good.
- desireco42 9y agoI am not fan of Blue Apron, but just ability to have this kind of stupid patents is clearly anti-business and would support any measure to get rid of those.
- ericwood 9y agoAmazon filed for a trademark, not a patent.
- desireco42 9y agoOK I see. Thanks. Then however bad, it kind of is legitimate practice to put pressure on them. I need to read more carefully next time.
- madengr 9y agoAren't meal-kits just plain expensive, compared to shopping at a local grocery store?
- blacksmith_tb 9y agoI don't think they are interested in competing on price, the value proposition is that they save you time, and the effort of meal planning. But they are pitching themselves as cheaper than eating out, and with at least the illusion the food is healthier (plus a pinch of the IKEA effect since you cooked it yourself).
- metalliqaz 9y agoI've used Blue Apron. They don't save any time at all. What I saved in shopping I lost in meal prep. I quickly went back to the prepped food at my local grocery store, which is also much cheaper. People who really wish to trade money for time would just eat at restaurants.
- DoubleCribble 9y agoPeople initially subscribe for lots of reasons but long term subscribers may see the value proposition as this: More expensive in cash cost, less expensive in opportunity cost.
- gautamnarula 9y agoAn even better question is why don't many grocery stores offer Blue Apron style meal kits? They could offer it much cheaper (while still getting better margins on them compared to regular groceries) and have them available for pickup. If they were able to bring the cost to $3-5 a meal (which seems doable) I'd use them all the time.
- crudbug 9y agoPlease use your local grocery store. I am 31, live in Manhattan and shop once a week for groceries. All these food startups are not solving any real problems, its Webvan all over again.
- Sargos 9y agoNot wanting to spend my precious time researching on the internet for a good recipe, going to the grocery store to pick up items for said recipe, and them prepping the ingredients before the cooking process even starts is a "real problem" that is very much solved by these services.