Poised for an IPO, How Far Can Blue Apron Fly?
Many meal and food delivery services are going belly up. But Blue Apron is ready to take its meal kit business through a public offering to raise a hundred million dollars or more. After only five years, sales have grown explosively, reaching $795 million in 2016. Losses – $44 million in 2016 – are growing, too. And competition is multiplying.
How far can this juggernaut fly?
Consumers Seeking More Than Convenience
Food delivery startups have lately been making headlines by closing up shop. Peapod is one exception. This grocery delivery service was one of the internet’s first startups. And it survived the dot com bubble bursting. But others did not fare so well. More recent delivery ventures are having a tough time. One of the best funded examples – Sprig – just made news by closing up shop.
Convenience alone is seldom a compelling consumer proposition. To prosper, a brand must have a larger, more emotional appeal.
The Implicit Claim of Health
Enter Blue Apron with beautiful imagery of wonderful, imaginative meals that you prepare lovingly. Marketing copy promises an experience that captures all the emotional benefits of eating well. They describe fresh ingredients, free of hormones and antibiotics. Servings are about 500 to 800 calories. But you won’t find an explicit claim about health.
Blue Apron leaves it up to consumers making that conclusion for them. And to consumers, beliefs about “eating healthy” are often not grounded in solid evidence.
In fact, Nielsen reports that healthy meals (along with convenience and new recipes) are a key reason for buying meal kits. Other competitors are offering explicitly healthier options than Blue Apron. But they don’t seem to be threatening the innovator’s lead.
Supermarket Guru Phil Lempert cites Nielsen’s research and says meal kits are here to stay. Plenty of competitors are emerging and Blue Apron might stumble. But we would not bet against this market leader.
Click here to read more from the New York Times and here to read more from Lempert.
Blue Apron Meal Kit, photograph © Blue Apron, LLC
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June 5, 2017
