Blue Apron Shares Hit New Low, as Anyone Can Do “Meal Kits,” Even Walmart(wolfstreet.com)
wolfstreet.com
Blue Apron Shares Hit New Low, as Anyone Can Do “Meal Kits,” Even Walmart
https://wolfstreet.com/2018/03/05/blue-apron-shares-hit-new-low-as-anyone-can-do-meal-kits-even-walmart/
54 comments
I think you kind of keyed in on their problem: these meal kits are great for learning how to cook, but once you have the basic techniques and concepts down, the kits are usually more hassle than they're worth.
Someone gifted me a few boxes, and they were nice, but the what I took away from it wasn't a subscription, it was the recipe cards which went right into my recipe folder.
Someone gifted me a few boxes, and they were nice, but the what I took away from it wasn't a subscription, it was the recipe cards which went right into my recipe folder.
> it was the recipe cards
All of which they post online, e.g, https://www.blueapron.com/recipes/beef-mushroom-stew-with-ro...
All of which they post online, e.g, https://www.blueapron.com/recipes/beef-mushroom-stew-with-ro...
Yeah 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.
It 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.
And not stopping at the grocery store can be solved in other ways, like grocery deliveries...
Timely; 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...
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...
Without 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.
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.
I 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.
I'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.
Anyway, plenty of subscription businesses that can be sustainable at a smaller scale.
Or, 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?
DSC 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.
There 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.
I'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)
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)
FWIW, we found Blue Apron ingredient quality to be better than HelloFresh. Probably varies by locale.
Completely indefensible from competitors with zero chance of a monopoly. Peter Thiel is tutting disapprovingly down in his antarctic survival mansion...
Agreed 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.
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.
I 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.
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.
Totally agree, I'd group that in my #1 above.
What 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.
Wow, 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.
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.
I 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).
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).
I 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!
We now subscribe to Freshly. Meals are pre-made and in 3 minutes they are heated up. Perfect!
Blue 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.
What supermarket would buy them though? Their product is trivial to replicate. In fact, every supermarket I shop at already sells meal-kits.
I 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.
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.
Market 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!
Edit: Typo dutifully noted and corrected!
For 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.
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.
I 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.
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.
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I think the OP meant that $9 per serving. So $36 (now $40) for a family of four.
I know that's what he meant. The price of a meal and delivery + tip would easily be $9 from McDonalds. Sure, kids meals are a bit cheaper, but it would still be hard.
I'm shocked how cheap food is in US then. In UK HelloFresh works out at a little bit less than £5/person/meal, and you just can't beat that. No one will deliver for that cheap, and any item from the menu will be more than this. I guess you could go eat at a chain restaurant like wetherspoons, but then for £5 you get a frozen burger and a pint of pepsi. Even a McDonald meal will hardly fit in that price, order anything better than a bigmac and you're looking at £6.29.
GP might have an extremely low bar for "restaurant meal." $9 isn't quite enough for an okay lunch sandwich in the coastal/metropolitan US. Some sort of entree is more likely at about $18.
It all depends on the metro area. That seems a little high for Chicago.
a lunch sandwich meal can be had in chicago for ~10-12
Hey, Switzerland is worse! McDonalds will easily set you back 12 CHF last time I checked a few years ago, it could be worse now. Grocery shopping was kind of nerve racking, even at discount Migros.
According to "the Big Mac Index" Switzerland is actually ranked number one when it comes to average salaries (purchasing power) vs. price of a Big Mac (consumer prices), see: https://www.statista.com/statistics/274326/big-mac-index-glo...
Regarding groceries: You should go shopping to Aldi-Suise and Lidl-Suisse. They have the same veggies and fruits and they cost half of what you have to pay at Migros!
(Content marketing: If you want to learn more about how to save money in Switzerland, check my blogpost: "Eight reasons why I moved to Switzerland to work in tech" https://goo.gl/O3rul7)
Regarding groceries: You should go shopping to Aldi-Suise and Lidl-Suisse. They have the same veggies and fruits and they cost half of what you have to pay at Migros!
(Content marketing: If you want to learn more about how to save money in Switzerland, check my blogpost: "Eight reasons why I moved to Switzerland to work in tech" https://goo.gl/O3rul7)
It is difficult to find those in the city without a car. In Lausanne, you might have to go out to Renens, for examples.
Ironically, I was able to save a lot of money working in Switzerland (more than half my post-doc salary) because everything was just too expensive to buy :). No regrets!
Ironically, I was able to save a lot of money working in Switzerland (more than half my post-doc salary) because everything was just too expensive to buy :). No regrets!
It seems like the target market for meal kits would be people who want to learn to cook? (Without working too hard at it.) Delivery will get you tasty food but you don't learn anything.
Problem there is that once people learn to cook, they have no need for the service anymore. To survive you'd need to have a healthy pipeline of new customers with manageable acquisitions costs relative to the lifetime value of the customer.
And even if Blue Apron could clear all of those hurdles profitably, as the article contends, they have no moat. They are not vertically integrated so there's but only so much efficiency they can glean out of the supply chain and there are much bigger fish out there that can bludgeon them to death with scale.
And even if Blue Apron could clear all of those hurdles profitably, as the article contends, they have no moat. They are not vertically integrated so there's but only so much efficiency they can glean out of the supply chain and there are much bigger fish out there that can bludgeon them to death with scale.
I've done 90 boxes from HelloFresh and I went from barely knowing how to cook to being very proficient and confident that I can cook nearly anything. I also have no problems picking ingredients and things that work well together. I've stopped the subscription some time ago, but in my opinion it was worth the money for the skills alone.
Who knows? You have to figure on one end, there's people like me who have a well-equipped kitchen and some knife skills and have no interest in or need for meal kits, and at the other end are people with no interest/time for cooking at all, and mainly want to go with take-out/delivery options. Given the premium prices, it's presumably not an option for, say low-income folks with more limited cooking facilities. So who's left?
Unfortunately for Blue Apron that's not going to make them money. Once you learn the basic skills you won't need them anymore. They'll have a hard time growing if this is their model. gambiting's reply illustrates this perfectly
I think it's for people who are too lazy for grocery shopping but not lazy enough to just order takeout. That's a tiny sliver on the laziness scale IMHO.
Not quite. The meals I prepare from Blue Apron are significantly healthier than most takeout options - we control the sodium entirely and the majority of the ingredients are fresh vegetables and proteins. Plus the variety week to week is staggering - I've been getting weekly Blue Apron for more than a year and never had a repeated recipe. I've learned about all sorts of new foods I had never even heard of before. I am absolutely too lazy to meal plan and go grocery shopping, but ordering takeout isn't even a comparison point for me.
Or positive cash flow which is unduly discounted. I don’t see if they would still have a business if the new customer growth stopped.
I think they did buy Niman Ranch.
It’s easy to create the app. It’s hard to deliver fresh ingredients on such short notice on time... A number of these startups have shut down after they burned through their investors’ money.
It depends if you think Walmart can really put together something people will pay for. If not, might as well buy Blue Apron now while everyone is afraid of the future. Cash in after the competition gets weeded out.
It depends if you think Walmart can really put together something people will pay for. If not, might as well buy Blue Apron now while everyone is afraid of the future. Cash in after the competition gets weeded out.
Imagine once Amazon-Whole Foods makes a play.
> Market cap is now under 500K
I think you mean $500M.
https://www.google.com/search?tbm=fin&q=NYSE:+APRN
I think you mean $500M.
https://www.google.com/search?tbm=fin&q=NYSE:+APRN
Soon under $500K.
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.