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Blue Apron Shares Hit New Low, as Anyone Can Do “Meal Kits,” Even Walmart
- breakpointalpha 9y agoWithout reading the article, this is exactly why I gave up on my last side-project. The subscription box business is great for consumers, but nearly indefensible against competitors. Dollar shave club was hugely successful because it was a first-mover. Now Gillette and others are offering direct subscription services. There simply is no moat if you don't own the base materials in the package and can control for manufacturing costs.
- alex_hitchins 9y agoOr, possible have a white label option in place from day one. Would an easy franchise/affiliate/brand-able option result in less copycats and more sales partners?
- amclennon 9y agoI suppose that depends on what your goal is. If you're hoping to create a product segment that didn't previously exist, I think Blue Apron succeeded. If the goal is to make money, then I think the Blue Apron founders / investors were also able to cash out from an IPO when they saw the writing on the wall.
- nicholas73 9y agoI'd encourage you to re-think this. Blue Apron fails because it is higher cost in a VERY low margin business, combined with a mandate to scale. Simply put, their value was mostly saving you time, with a novelty twist. But you have to start getting close to upper middle class to make up for the premium paid. Shame on VCs who didn't understand this, or did but knew they could push the stock all the way to IPO. Anyway, plenty of subscription businesses that can be sustainable at a smaller scale.
- adrr 9y agoDSC wasn't a first mover there were other people in the market including amazon subscriptions. You defend yourself with brand and scale. Thats the Amazon moat. Biggest costs for these food in a box companies is shipping and packaging which are solved at high volumes.
- skellera 9y agoThere were people online who recommended using dorco blades as they were cheaper than other shaving brands (blades have been overpriced). DSC took advantage of that idea and used good marketing to build their very profitable business.
- mathattack 9y agoMarket cap is now under 500M. Is there any point at which they become a value play, or are the unit economics too awful? Edit: Typo dutifully noted and corrected!
- strictnein 9y ago> Market cap is now under 500K I think you mean $500M. https://www.google.com/search?tbm=fin&q=NYSE:+APRN https://www.google.com/search?tbm=fin&q=NYSE:+APRN
- mjcohen 9y agoSoon under $500K.
- ghostbrainalpha 9y agoFor them to be a 'value play' wouldn't they need to have purchased a bunch of real assets, like farms etc? Blue Apron stopped making sense for me when Uber Eats started delivering to my house. It's just too expensive. For $9.00 per meal, and a family of 4, I can just get delivery from most of my favorite restaurants. (More Choice, Same Price, Tastes Better, Much Easier) I guess Blue Apron is healthier than what I typically order, but I could choose to order healthy if I wanted to... which I usually don't.
- RandallBrown 9y agoI would have a hard time even getting McDonald's delivered to me for $9 a meal. I love Blue Apron. $10/meal for the quality of their food is fantastic. I also really enjoying cooking it with my girlfriend. But, I don't order it every week, just probably once or twice a month.
- deleted 9y ago[deleted]
- mywittyname 9y agoI think the OP meant that $9 per serving. So $36 (now $40) for a family of four.
- OscarTheGrinch 9y agoCompletely indefensible from competitors with zero chance of a monopoly. Peter Thiel is tutting disapprovingly down in his antarctic survival mansion...
- DougN7 9y agoI've been using HelloFresh for a couple months. I don't think there is a business model here. Too much expense in shipping materials, and then a pain for the customer to dispose/recycle said materials. Vegetable quality is hit or miss. And the price is high. The convenience factor just barely, barely makes it worth while. Having said that, the recipes are really great (I'm not a cook, but can follow a recipe). Wish they would just bundle their recipes into a book and sell that (strangely, I've not been able to find a 'complete meal' recipe book with a set of steps for each part of the meal sequenced together)
- jerkstate 9y agoI really liked Blue Apron but there was so much trash left over! I really wish they would do better pre-planning with ingredients, like send a stick of butter and a jug of vinegar instead of a pat and a tiny bottle. There were so many bottles from week to week of the same stuff - vinegar, soy sauce, mirin, etc.. We ended up just using a lot of the techniques we learned from Blue Apron to prepare vegetables from CSA boxes. It's a great idea for young people who would like to learn how to cook (or learn some new techniques/staples). I might get a few months subscription for a relative who just moved out on their own as a gift, for example.
- Rapzid 9y agoTimely; we just started Blue Apron about a month ago. I'm concerned about the waste; particularly the freezer packs.. It would be good if they kept you topped up on bulk items like you mentioned: Vinegar, Soy, rice, noodles(noodles and rice last forever!). Just let them know what you are low on and they top you up. I'm going to have to look into Walmart kits. I can swing buy for a weeks worth of meals and not need to have all those freezer packs to deal with...
- Lendal 9y agoYeah I agree. So much waste, plus it doesn't really solve the problem we were trying to solve which is time. Preparing the meal is still time-consuming. It wasn't saving us much time at all. Add to that the guilt of having all the extra waste for what, so we don't have to stop at the grocery store on the way home? Not worth it. The meals were good though, and healthy.
- jerkstate 9y agoIt was good for us because we have a toddler/infant so going out to a restaurant is really difficult and we like variety without a whole lot of meal planning effort. Adding the blue apron techniques to our repertoire made it a lot easier to throw stuff together from our CSA box and have a pretty focused shopping list for the grocery store.
- AstralStorm 9y ago
- officemonkey 9y agoWow, it's only been 18 years since Blue Mountain Arts being sold to Excite@Home for $780M. If you recall, Blue Mountain Arts made 3/4 of a billion dollars in 1999 for it's "ecard" business, a business that literally anyone with a webserver can replicate in an afternoon. It's too bad too, because Excite was my favorite "webportal/homepage" back then. And the dotcom bubble burst killed it.
- jstalin 9y agoI used to subscribe to Green Chef, but stopped mostly due to the time it takes to make the meals. Usually it took twice as long as it said on the recipes. We now subscribe to Freshly. Meals are pre-made and in 3 minutes they are heated up. Perfect!
- wiremine 9y agoAgreed this isn't much of a defensible business: if anything it feels like a stepping stone to the next phase: 100% on demand meal kits. 1. I upload my meal plan for the next week or two, or select from pre-designed options. 2. The grocer [1] picks and packages the ingredients into kits, one per meal. 3. I pick them up and/or they are shipped to me. (or a bit of both if it's Amazon or Walmart) Actually, that's just a stepping stone to a fully automated kitchen, but that's a separate thread for another day... [1] I'm using this term loosely.
- shostack 9y agoI think you're right that it is just a stepping stone, and it may work like that, but I also see another option. With Amazon's Whole Foods acquisition and penchant for turning everything into scaleable infrastructure, I wouldn't be surprised to see an API for groceries released in the near future. Then every single recipe blog out there could simply have a button to "Buy this meal" and get it either delivered or assembled and ready for in-store pickup. It would be a game changer.
- wiremine 9y agoTotally agree, I'd group that in my #1 above.
- AstralStorm 9y agoWhat makes that really different from plain old food delivery? Customizability is a huge cost as you cannot prestock ingredients and negotiate wholesale deals... even if you were to stock everything, preparation will take longer and require more skill.
- an4rchy 9y agoI feel like there's still a lot of potential for this type of a business to pivot/grow as they try to improve the unit economics in multiple ways. It sounds like (based on the thread) a lot of people picked up Blue Apron as a starting point to cooking. So why not create an interesting skillset based/gamification of cooking product where you learn new skills all the time. I'm sure everyone can dice/cut/bake/fry/sautee etc in a few meals but there are probably other advanced techniques which you could subscribe to, to learn new/interesting techniques/recipes. Also, you could have a community based thing where different people compete for skillset or you order blue apron for a party and cook together etc (larger quantities -- less wastage, better economics).
- WheelsAtLarge 9y agoBlue Apron needs to sell itself to a large supermarket chain. They can use the markets as a base of operation. Their business model is impossible to maintain. Marketing and delivery costs are killing them. I suspect a year from now we won't see them as an independent concern. They might even go out of business. Walmart will win this fight, no question.
- mywittyname 9y agoWhat supermarket would buy them though? Their product is trivial to replicate. In fact, every supermarket I shop at already sells meal-kits.
- WheelsAtLarge 9y agoI shop at Ralphs which is part of the Kroger chain. They have a meal kit system in place but they're doing a really bad job at marketing it. It's there but there's little motivation from the store to sell it. If they could get the same marketing energy that Blue Apron has then it would be a big part of the store's revenue. But you have a good point, it's a hard sell. I suspect they, Blue Apron, went public since they ran out of funding sources. I wish them luck. It's a hard business but maybe they can work things out.
- omw192168 9y agoSo easy the Trump admin is making one for poor people.