If you’ve ever listened to a podcast, you’ve probably heard an ad for Blue Apron. The meal-kit service, which sends along portioned food so that you can assemble meals, is seemingly everywhere, and has spawned a legion of imitators. It’s a genuinely useful service, but now it’s staring down a scary competitor in the form of Amazon and its newly bought grocery chain.
The impact has been fairly harsh, financially. Blue Apron hasn’t been in the best shape fiscally, as like many startups it’s never posted a profit. In fact, when it announced it was going public at the beginning of the month, it flatly stated it may never be profitable. When they found themselves facing the Amazon-Whole Foods monster, Blue Apron had to cut their IPO price down to $10 a share, putting the company on a tough footing as they entered the stock market. Things didn’t get any better throughout yesterday, with the stock finished its first day of trading at $10.0018. So… shares increased less than 1/5 of one penny. Not great.
A larger question is whether meal-kit services in general can survive the arrival of the 800-pound gorilla. After all, part of the appeal of these services is they gently push you into cooking for yourself, learning new techniques and approaches, and handles the sourcing and quality check of the produce and other food so you don’t have to. Amazon is clearly more, at least for the moment, about delivering the raw materials. But it can hardly have failed to notice it has an enormous distribution network that could just as easily shuttle around meal kits as it does bags of apples, and could freshly prepare these kits, or lead tutorials on site at many Whole Foods in the first place.
Distribution is Amazon’s key advantage here (among many). Blue Apron’s big flaw has always been that once food is in a box, the clock’s ticking. Every minute that box is on the shipping dock, the food gets less fresh. In the race to get food off that dock and into people’s homes, Amazon is lightyears ahead, and the Blue Apron IPo makes it seem like people are realizing that no one else is going to catch up.
(via Grub Street)