16 ms·

Can't help but feel like Blue Apron and its competitors are the next generation of Groupon and its competitors. Burnt through VC funding competing with each oth

by untog 8y ago

Can't help but feel like Blue Apron and its competitors are the next generation of Groupon and its competitors. Burnt through VC funding competing with each other only to find out the actual market for their product isn't that great. But thanks for all the free trials, VC investors! I've had a few above average dinners out of it.

raverbashing 8y ago
Cough Moviepass cough
- baddox 8y ago
  It’s slightly different, since Moviepass has a huge market (selling dollars for quarters), just not a very profitable one.
- jonwachob91 8y ago
  Moviepass didn't mess up on the size and demand of their market. They messed up in assessing the moat they thought they had. When the movie theaters saw how successful they were, it was too easy for them to raise the prices on moviepass and introduce their own product offering.
kalleboo 8y ago
Where I'm from all the big grocery store chains have a variant of a Blue Apron style service. Seems like a feature not a product.
- jrochkind1 8y ago
  I wonder if that would have a higher chance of actually being profitable here in the U.S., charging about the same but cutting out the expensive to-your-door delivery. Although there's probably more food wastage. The article mentioned Blue Apron (and competitors) are trying to increase sales at grocery stores, maybe some of them can survive like that if that works.
  - ahi 8y ago
    I have seen it in grocery stores here in the midwest.
  - magic_beans 8y ago
    I did always wonder why Blue Apron didn't just partner with grocery stores. It makes so much more sense, and my little grocery store in New Amazon HQ, Queens does not have any type of meal kits.
  - flukus 8y ago
    > I wonder if that would have a higher chance of actually being profitable here in the U.S., charging about the same but cutting out the expensive to-your-door delivery. From what I've seen it doesn't help, the in store ones cost almost as a restaurant anyway, But at least a restaurant solves the time consuming part (cooking, cleaning), if your in the store then getting everything packaged together only saves a few minutes. This is in Australia with a higher minimum wage, I imagine it would make an even smaller difference in the US.
    - ghaff 8y ago
      I don’t really have good restaurant options around where I live though. I’d prefer to cook at home a lot of the time. But I sometimes prefer it to be a minimum of planning and prep. But this is the conundrum. If I can pick up a few ingredients, even if there’s some waste, and throw together a meal quickly the meal kits may not add much.
      - Symbiote 8y ago
        When I was a student, the local Sainsbury's supermarket in London had recipe cards by the entrance. It was easy enough to find everything in the shop. There were perhaps 30-40 cards to choose from. This no longer exists, people probably look on their phones, but the restriction in choice was useful.
  - reaperducer 8y ago
    I wonder if that would have a higher chance of actually being profitable here in the U.S. Kroger has these in the U.S. Probably some other chains, too. I was surprised by how little food you get, and how expensive the Kroger kits are. I expected them to be a cheaper alternative to Blue Apron, but they're about the same price. And at least Blue Apron and its competitors deliver to my door. I have to stop at the supermarket for the store-brand knock-offs.
- TuringNYC 8y ago
  Funny thing is that whenever we learned about entrepreneurship, the three phrase was always SUSTAINABLE COMPETITIVE ADVANTAGE. When I look at meal ingredient delivery services (or Groupon type businesses) almost none of them seemed to have actual sustainable competitive advantages. Some had advantages (early traction, etc) but nothing seemed sustainable. What is the thinking behind backing these businesses for VCs?
  - eismcc 8y ago
    FOMO
  - manigandham 8y ago
    There's not much thinking. It's hype and portfolio theory, and mostly hoping for a quick acquisition by a bigger company.
    - jjeaff 8y ago
      There's plenty of thinking. The VCs know what they are doing. For those that have plenty of cash, the game is to invest in anything and everything that has a good public facing brand. Pump it with cash, then dump it on the public market with an ipo to all the less sophisticated investors that aren't reading the financials. Sure, every once in a while, you'll come across a Facebook type business that ends up being profitable, but in the meantime you can still make money on the losers when you cash out.
      - phamilton 8y ago
        > less sophisticated investors that aren't reading the financials Do these actually exist? My understanding is that retail investors aren't significant and I don't believe that institutional investors don't look at financials.
        deleted 8y ago
        [deleted]
        8y ago
- mvindahl 8y ago
  Here in .dk-land we have several Blue Apron style businesses. The most prominent one started out more than two decades ago by as a kind of subscription service -- every week you'd get a bag containing the produce of the season, along with weird stuff like Hokkaido pumpkins that most people had no idea what to do with. These days they ship recipes along with the exact quantities of ingredients that you'll need for cooking. Often ingredients that are hard to come by in grocery stores. It's time saving and usually delicious. Anyway, my point is, they bootstrapped their business, pivoted a bit here and there, and built it to be profitable. So it's certainly doable.
  - kbar13 8y ago
    I'd subscribe for a service that provided hard to get ingredients for unique meals. I love cooking and I love trying new things. This would be fun!
- mrarjen 8y ago
  Exactly, the only advantage that these meal services can possibly offer is perhaps a streamlined way to get ingredients that are less likely sold by supermarkets. Then again that would be a rather niche market.
  - notyourday 8y ago
    I'm guessing you have not really gone to supermarkets recently. There's literally nothing that BlueApron has that is not stocked by most. This is from 2008: https://tucson.com/lifestyles/food-and-cooking/jacques-pepin-finds-plenty-to-like-in-supermarkets/article_e2a66d40-0271-5066-8720-f30a2a3f4f68.html https://tucson.com/lifestyles/food-and-cooking/jacques-pepin...
- michaelmior 8y ago
  This probably won't come as a shock to anyone, but I have noticed more convenience foods being sold by supermarkets over the past several years. Things like trays of freshly prepared pre-seasoned food you just throw in the oven. Anecdotally, this seems much less expensive than services like Blue Apron even if it does force you to go pick it up yourself. (Then again, there's always Instacart...)
zbrox 8y ago
I know about them only from the numerous podcast commercials. Here in the Nordics all supermarket chains have had that service for a while now and it's quite convenient. I can see the value of it but all these supermarkets have their supply chain built and they started a similar service in no time. So I can't see how Blue Apron can compete in Europe for example.
DoubleGlazing 8y ago
I think a bigger problem which these services don't get is that if you live in a reasonably sized city then you will have a huge range of takeaway/delivery food options. The amount of people who want to cook and prepare a nice meal is probably a lot less than the amount of people who just want to buy, eat and enjoy a nice meal. I live in Dublin, not exactly the biggest of cities, but I can't think of a single type of food that I can't order through one of the various home delivery apps available to me. No need to cook food or be constrained by a predetermined set of menus. It's hard to make the case for a meal in a box service when you can order just about any food imaginable from your phone and it will be delivered within 30 minutes.
- anongraddebt 8y ago
  It's bordering on out-of-control in some U.S. cities. About six months ago, I briefly stopped while in the middle of cleaning our apartment and realized the majority of our 'trash' was food delivery detritus. We've been spending $500-$700 a month on food delivery this year, and I only see that increasing in the future. I can regularly obtain a $1 (sometimes less) delivery fee by selecting among Uber Eats/GrubHub/DoorDash/etc. The pricing blood-bath between restaurants (and delivery companies) combined with convenience-induced laziness has me doing nutty things like order a $6 froyo from a place ~100 meters away. Speaking of Blue Apron, I recently threw out half of an unopened meal kit of theirs that convenience-induced laziness had caused to rot away in the fridge. The delivery trend is strong. Not sure it's a net positive society-wide habit.
  - zanny 8y ago
    Cooking is hard, requires a lot of hardware to do, and is an acquired skill that takes a lot of blunt learning of a lot of minute details about how certain ingredients interact. In the same way you don't ask everyone to learn to repair car engines or diagnose medical issues modern society puts a lot of pressure on specialization of hard work like cooking. That being said the true optimization would be that most people be content to eat in cafeteria style settings where there are limited options and the chefs are using whatever is freshest and most affordable and availability is fixed (even if you just grab and go with the food). There is a trade off between menu diversity, the prices you pay for it, and how good it can actually be where 16+ hour open restaurants with several page menus (including fast food) are making concessions on freshness / shortcuts in preparation to provide their diversity and availability. I think a lot of this relates to how we are in a transnational period for density. In the coming decades I am almost certain we will trend globally towards packing people into apartment / condo style living in city cores because the trends of sprawl and mcmansion single families that are going to be inherited by unmarried or childless descendants without the incomes to support them falls apart. Right now trying to build up a "local" kitchen you can go to three times a day for regular, good, healthy and diverse meals isn't feasible because the density isn't there to get them to walkable convenience, but I hope rising density makes them a possibility. At those kinds of scales it becomes a technical probability we might just get short range delivery drones where the kitchens advertise via app or notification whats on the menu and you just select what you want and a lil bot brings it to you a la room service but optimized in the aforementioned ways to make it more sustainable.
mathattack 8y ago
They’ve also kept several of my favorite podcasts afloat, though I haven’t heard them advertise as much since the IPO. Maybe their customer acquisition costs got ahead of them.
- cptskippy 8y ago
  They changed their target demographics, now they sponsor mechanical engineering channels on YouTube.
SonicSoul 8y ago
I believe they’re solving a real problem. For people that want a healthy meal but don’t want to spend $ on farm to table type restaurant. Although I do see quite a few more healthy options sprouting up in NYC I can’t speak for more suburban areas. Point being is a lot people care about ingredients, food prep (i.e. those brussel sprouts are not that healthy if cooked in re-used vegetable oil). The tricky part with this business model is making the food taste good is an art form and not easy to boil down to a simple 9 step formula. Also difficult is keeping all the ingredients fresh and portioned / ready to cook while keeping the price lower than it would be to go out and eat.
- WhompingWindows 8y ago
  You don't save that much, especially after the cheap trial. If you know what you're doing, a run to the grocery store will actually be much cheaper. I think it's more for people who want a home-cooked meal but don't want to go shopping or find a recipe.
  - acdha 8y ago
    We were a great example: some family members gave us a Green Chef subscription while we were both home on parental leave and it was a great way to eat better while having very little free time / energy.
  - SonicSoul 8y ago
    I don't believe savings is the primary goal. to me main benefits are: > control of food prep > control of ingredients > having ultra fresh cooked meal > less packaging waste ?
- acdha 8y ago
  I don't think the question is whether they're solving a problem but how profitable the market is: VC bubble thinking tends to chase high-margin businesses but this seems like something where anyone in it long-term will need to be comfortable with far more modest margins similar to what the restaurant industry has, especially since they can't make up a low-profit entree by selling high-profit alcohol and soda.
Symmetry 8y ago
Unlike Groupon they're providing value on net. The problem is that they didn't have any sort of moat to protect them from competition and when that competition arrived they weren't prepared for their market share to go down.
screye 8y ago
Just curious. How much does one meal (per person) come out to be ? If I am correct, they are targeting a relatively well off crowd and not the general populace. Are their margins large enough to get by on just rich-ish customers ?
- anonu 8y ago
  Blue apron was about $10 per person... $60 for 3 2-person meals. I think that's a reasonable price to pay for blue apron convenience. Yes, you might be able to source the ingredients for less. But you lose out on time there, as well as right sizing of ingredients.
bpp 8y ago
Wow, was thinking of this exact comment. 100% correct. (Somehow the online mattress craze seems immune to the same downfall.)
- joe5150 8y ago
  the online mattress store business model can't be any stranger than the brick-and-mortar mattress store business model. I'd love to read more about that.
PretzelFisch 8y ago
I don't see the value of Blue Apron over take out. The do the shopping but none of the prepwork so they don't solve the lack of time to prep and cook issue. I would rather sing up for a service that planned a monthly menu and delivered the meal ready to eat or reheat.

by untog 8y ago

raverbashing 8y ago

Cough Moviepass cough

baddox 8y ago
It’s slightly different, since Moviepass has a huge market (selling dollars for quarters), just not a very profitable one.
jonwachob91 8y ago
Moviepass didn't mess up on the size and demand of their market. They messed up in assessing the moat they thought they had. When the movie theaters saw how successful they were, it was too easy for them to raise the prices on moviepass and introduce their own product offering.

kalleboo 8y ago

Where I'm from all the big grocery store chains have a variant of a Blue Apron style service. Seems like a feature not a product.

jrochkind1 8y ago
I wonder if that would have a higher chance of actually being profitable here in the U.S., charging about the same but cutting out the expensive to-your-door delivery. Although there's probably more food wastage. The article mentioned Blue Apron (and competitors) are trying to increase sales at grocery stores, maybe some of them can survive like that if that works.
- ahi 8y ago
  I have seen it in grocery stores here in the midwest.
- magic_beans 8y ago
  I did always wonder why Blue Apron didn't just partner with grocery stores. It makes so much more sense, and my little grocery store in New Amazon HQ, Queens does not have any type of meal kits.
- flukus 8y ago
  > I wonder if that would have a higher chance of actually being profitable here in the U.S., charging about the same but cutting out the expensive to-your-door delivery. From what I've seen it doesn't help, the in store ones cost almost as a restaurant anyway, But at least a restaurant solves the time consuming part (cooking, cleaning), if your in the store then getting everything packaged together only saves a few minutes. This is in Australia with a higher minimum wage, I imagine it would make an even smaller difference in the US.
  - ghaff 8y ago
    I don’t really have good restaurant options around where I live though. I’d prefer to cook at home a lot of the time. But I sometimes prefer it to be a minimum of planning and prep. But this is the conundrum. If I can pick up a few ingredients, even if there’s some waste, and throw together a meal quickly the meal kits may not add much.
    - Symbiote 8y ago
      When I was a student, the local Sainsbury's supermarket in London had recipe cards by the entrance. It was easy enough to find everything in the shop. There were perhaps 30-40 cards to choose from. This no longer exists, people probably look on their phones, but the restriction in choice was useful.
- reaperducer 8y ago
  I wonder if that would have a higher chance of actually being profitable here in the U.S. Kroger has these in the U.S. Probably some other chains, too. I was surprised by how little food you get, and how expensive the Kroger kits are. I expected them to be a cheaper alternative to Blue Apron, but they're about the same price. And at least Blue Apron and its competitors deliver to my door. I have to stop at the supermarket for the store-brand knock-offs.
TuringNYC 8y ago
Funny thing is that whenever we learned about entrepreneurship, the three phrase was always SUSTAINABLE COMPETITIVE ADVANTAGE. When I look at meal ingredient delivery services (or Groupon type businesses) almost none of them seemed to have actual sustainable competitive advantages. Some had advantages (early traction, etc) but nothing seemed sustainable. What is the thinking behind backing these businesses for VCs?
- eismcc 8y ago
  FOMO
- manigandham 8y ago
  There's not much thinking. It's hype and portfolio theory, and mostly hoping for a quick acquisition by a bigger company.
  - jjeaff 8y ago
    There's plenty of thinking. The VCs know what they are doing. For those that have plenty of cash, the game is to invest in anything and everything that has a good public facing brand. Pump it with cash, then dump it on the public market with an ipo to all the less sophisticated investors that aren't reading the financials. Sure, every once in a while, you'll come across a Facebook type business that ends up being profitable, but in the meantime you can still make money on the losers when you cash out.
    - phamilton 8y ago
      > less sophisticated investors that aren't reading the financials Do these actually exist? My understanding is that retail investors aren't significant and I don't believe that institutional investors don't look at financials.
      - deleted 8y ago
        [deleted]
      - 8y ago
mvindahl 8y ago
Here in .dk-land we have several Blue Apron style businesses. The most prominent one started out more than two decades ago by as a kind of subscription service -- every week you'd get a bag containing the produce of the season, along with weird stuff like Hokkaido pumpkins that most people had no idea what to do with. These days they ship recipes along with the exact quantities of ingredients that you'll need for cooking. Often ingredients that are hard to come by in grocery stores. It's time saving and usually delicious. Anyway, my point is, they bootstrapped their business, pivoted a bit here and there, and built it to be profitable. So it's certainly doable.
- kbar13 8y ago
  I'd subscribe for a service that provided hard to get ingredients for unique meals. I love cooking and I love trying new things. This would be fun!
mrarjen 8y ago
Exactly, the only advantage that these meal services can possibly offer is perhaps a streamlined way to get ingredients that are less likely sold by supermarkets. Then again that would be a rather niche market.
- notyourday 8y ago
  I'm guessing you have not really gone to supermarkets recently. There's literally nothing that BlueApron has that is not stocked by most. This is from 2008: https://tucson.com/lifestyles/food-and-cooking/jacques-pepin-finds-plenty-to-like-in-supermarkets/article_e2a66d40-0271-5066-8720-f30a2a3f4f68.html https://tucson.com/lifestyles/food-and-cooking/jacques-pepin...
michaelmior 8y ago
This probably won't come as a shock to anyone, but I have noticed more convenience foods being sold by supermarkets over the past several years. Things like trays of freshly prepared pre-seasoned food you just throw in the oven. Anecdotally, this seems much less expensive than services like Blue Apron even if it does force you to go pick it up yourself. (Then again, there's always Instacart...)

zbrox 8y ago

I know about them only from the numerous podcast commercials. Here in the Nordics all supermarket chains have had that service for a while now and it's quite convenient. I can see the value of it but all these supermarkets have their supply chain built and they started a similar service in no time. So I can't see how Blue Apron can compete in Europe for example.

DoubleGlazing 8y ago

I think a bigger problem which these services don't get is that if you live in a reasonably sized city then you will have a huge range of takeaway/delivery food options. The amount of people who want to cook and prepare a nice meal is probably a lot less than the amount of people who just want to buy, eat and enjoy a nice meal. I live in Dublin, not exactly the biggest of cities, but I can't think of a single type of food that I can't order through one of the various home delivery apps available to me. No need to cook food or be constrained by a predetermined set of menus. It's hard to make the case for a meal in a box service when you can order just about any food imaginable from your phone and it will be delivered within 30 minutes.

anongraddebt 8y ago
It's bordering on out-of-control in some U.S. cities. About six months ago, I briefly stopped while in the middle of cleaning our apartment and realized the majority of our 'trash' was food delivery detritus. We've been spending $500-$700 a month on food delivery this year, and I only see that increasing in the future. I can regularly obtain a $1 (sometimes less) delivery fee by selecting among Uber Eats/GrubHub/DoorDash/etc. The pricing blood-bath between restaurants (and delivery companies) combined with convenience-induced laziness has me doing nutty things like order a $6 froyo from a place ~100 meters away. Speaking of Blue Apron, I recently threw out half of an unopened meal kit of theirs that convenience-induced laziness had caused to rot away in the fridge. The delivery trend is strong. Not sure it's a net positive society-wide habit.
- zanny 8y ago
  Cooking is hard, requires a lot of hardware to do, and is an acquired skill that takes a lot of blunt learning of a lot of minute details about how certain ingredients interact. In the same way you don't ask everyone to learn to repair car engines or diagnose medical issues modern society puts a lot of pressure on specialization of hard work like cooking. That being said the true optimization would be that most people be content to eat in cafeteria style settings where there are limited options and the chefs are using whatever is freshest and most affordable and availability is fixed (even if you just grab and go with the food). There is a trade off between menu diversity, the prices you pay for it, and how good it can actually be where 16+ hour open restaurants with several page menus (including fast food) are making concessions on freshness / shortcuts in preparation to provide their diversity and availability. I think a lot of this relates to how we are in a transnational period for density. In the coming decades I am almost certain we will trend globally towards packing people into apartment / condo style living in city cores because the trends of sprawl and mcmansion single families that are going to be inherited by unmarried or childless descendants without the incomes to support them falls apart. Right now trying to build up a "local" kitchen you can go to three times a day for regular, good, healthy and diverse meals isn't feasible because the density isn't there to get them to walkable convenience, but I hope rising density makes them a possibility. At those kinds of scales it becomes a technical probability we might just get short range delivery drones where the kitchens advertise via app or notification whats on the menu and you just select what you want and a lil bot brings it to you a la room service but optimized in the aforementioned ways to make it more sustainable.

mathattack 8y ago

They’ve also kept several of my favorite podcasts afloat, though I haven’t heard them advertise as much since the IPO. Maybe their customer acquisition costs got ahead of them.

cptskippy 8y ago
They changed their target demographics, now they sponsor mechanical engineering channels on YouTube.

SonicSoul 8y ago

I believe they’re solving a real problem. For people that want a healthy meal but don’t want to spend $ on farm to table type restaurant. Although I do see quite a few more healthy options sprouting up in NYC I can’t speak for more suburban areas. Point being is a lot people care about ingredients, food prep (i.e. those brussel sprouts are not that healthy if cooked in re-used vegetable oil). The tricky part with this business model is making the food taste good is an art form and not easy to boil down to a simple 9 step formula. Also difficult is keeping all the ingredients fresh and portioned / ready to cook while keeping the price lower than it would be to go out and eat.

WhompingWindows 8y ago
You don't save that much, especially after the cheap trial. If you know what you're doing, a run to the grocery store will actually be much cheaper. I think it's more for people who want a home-cooked meal but don't want to go shopping or find a recipe.
- acdha 8y ago
  We were a great example: some family members gave us a Green Chef subscription while we were both home on parental leave and it was a great way to eat better while having very little free time / energy.
- SonicSoul 8y ago
  I don't believe savings is the primary goal. to me main benefits are: > control of food prep > control of ingredients > having ultra fresh cooked meal > less packaging waste ?
acdha 8y ago
I don't think the question is whether they're solving a problem but how profitable the market is: VC bubble thinking tends to chase high-margin businesses but this seems like something where anyone in it long-term will need to be comfortable with far more modest margins similar to what the restaurant industry has, especially since they can't make up a low-profit entree by selling high-profit alcohol and soda.

Symmetry 8y ago

Unlike Groupon they're providing value on net. The problem is that they didn't have any sort of moat to protect them from competition and when that competition arrived they weren't prepared for their market share to go down.

screye 8y ago

Just curious. How much does one meal (per person) come out to be ? If I am correct, they are targeting a relatively well off crowd and not the general populace. Are their margins large enough to get by on just rich-ish customers ?

anonu 8y ago
Blue apron was about $10 per person... $60 for 3 2-person meals. I think that's a reasonable price to pay for blue apron convenience. Yes, you might be able to source the ingredients for less. But you lose out on time there, as well as right sizing of ingredients.

bpp 8y ago

Wow, was thinking of this exact comment. 100% correct. (Somehow the online mattress craze seems immune to the same downfall.)

joe5150 8y ago
the online mattress store business model can't be any stranger than the brick-and-mortar mattress store business model. I'd love to read more about that.

PretzelFisch 8y ago

I don't see the value of Blue Apron over take out. The do the shopping but none of the prepwork so they don't solve the lack of time to prep and cook issue. I would rather sing up for a service that planned a monthly menu and delivered the meal ready to eat or reheat.