Blue Apron Shares Hit New Low, as Anyone Can Do Meal Kits, Even Walmart
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Date: March 5th, 2018 2:42 PM Author: Lime Judgmental Market Sweet Tailpipe
Blue Apron Shares Hit New Low, as Anyone Can Do “Meal Kits,” Even Walmart
by Wolf Richter • Mar 5, 2018 • 3 Comments
Former unicorn gets trampled. 150 startups and the grocery giants are at it. But Americans are not so convinced.
Shares of Blue Apron [APRN] dropped 5% this morning to a new low of $2.59 after Walmart announced that it would expand its presence in the meal-kit market. “One-stop meals,” it calls them. They’re part of its offering on its website of “meal kits, farm crates & specialty food boxes.” It said the meal-kit offering would expand from the 250 stores where it has already rolled out the service to 2,000 stores.
Walmart combines the online ordering process with its vast brick-and-mortar presence and global supply chain. So it has a better chance of making money in this niche than Blue Apron. These meal kits would serve two people and range from $8 to $15 a box. A check on its website for meal kits reveals prices upward of $30 for two to four meals with “free shipping.”
Walmart belatedly has made mega-efforts to not get run over by e-commerce in general and by Amazon in particular. It has been investing in its online grocery business. Sam’s Club announced last week that it partnered with Instacart to offer food delivery in several states. It’s also rejiggering some of its suddenly shuttered Sam’s Clubs stores into distribution centers for the online grocery business.
Supermarket chain Albertsons Companies has piled into the meal kit market in 2017, when it launched same-day delivery and “Drive-up & Go,” and when it acquired meal-kit startup Plated. In November, it announced that it is also partnering with Instacart to offer “nationwide on-demand grocery delivery service” with “deliveries in as little as an hour.”
Kroger announced last December that it was expanding its meal kit service, which it had rolled out earlier in 2017, to 200 stores. These “Prep+Pared Meal Kits are a growing part of Kroger’s Our Brands portfolio,” it said.
Target announced last December that it had acquired Shipt, a same-day grocery delivery service active in over 70 markets in the US. A competitive meal-kit offering will likely follow.
Amazon hasn’t yet announced a full-blown meal-kit service, though it has experimented with it. But it announced in February that it would start grocery deliveries from its Whole Foods stores via its two-hour Prime Now delivery service. And meal kits can’t be far behind.
Among the meal-kit startups, Blue Apron is still the largest in terms of market share, but its share is dropping, hounded by an ever increasing number of competitors, including the German meal-kit company HelloFresh that managed, like Blue Apron, to get an IPO done last year. There’s Home Chef, Sun Basket, Green Chef, Purple Carrot, Gobble, Marley Spoon, MealPal….
In short, 150 meal-kit startups were founded over the past five years, according to a report cited by the Wall Street Journal in January. It’s easy to create the app. It’s hard to deliver fresh ingredients on such short notice on time. And it’s impossible to make money doing this, given the costs of logistics, the costs of customer acquisitions, and the lack of economies of scale. A number of these startups have shut down after they burned through their investors’ money.
Meal-kit customers appear to lack a sense of consistency and loyalty, according to another report cited by the WSJ: “An estimated 70% of customers of Blue Apron Holdings Inc., the largest such provider, stop regularly buying its meals six months after signing up, while more than 80% of HelloFresh S.E users weren’t active.”
The venture capital community has finally gotten the memo. “We are not funding meal kits, and I don’t know a single VC that is actively looking at the space,” Ian Sigalow, co-founder of Greycroft Partners, told the WSJ. His firm was a lead investor in Plated that was taken off their hands by Albertsons. Lucky them.
Nevertheless, in 2017, about $274 million was invested in 18 meal-kit companies. While that’s down from a peak of 25 deals totaling $308 million in 2015, it still way above zero. So as of last year, investors were still buying the hype. This may not be the case anymore this year.
Meal kits had become one of the many hyped investment opportunities that would change the world and the way we live, or whatever, only to flounder once reality set in.
Whether meal kits are going to remain a thing or get folded into online grocery and delivery services, one thing is for sure: There are zero barriers to entry, and if Americans like using this service, all the giants in the grocery business will jump into it. Another thing may also be true: These services may remain a money-suck forever due to the logistics involved and the prices people are willing to pay.
Blue Apron was valued at $2 billion during its last round of funding in June, 2015. It was one of the most hyped unicorns that would change the world. But by the time its IPO was promoted in June 2017, enthusiasm had already waned, and the IPO price was cut from a range of $15-$17 a share to $10 a share. Just months after the IPO, the company started laying off workers and shutting facilities as it was running low on cash.
At the price this morning of $2.59 a share, Blue Apron’s market capitalization has dropped to $500 million, down 75% from the “valuation” during the last round of funding. There are still hopes that another big retailer will buy it, but those hopes are fading every time a big retailer, such as Walmart today, goes another route.
Despite protestations to the contrary, the brick-and-mortar retail meltdown continues with a mechanistic air of inevitability. Read… The Brick & Mortar Retail Meltdown, February Update
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539818) |
Date: March 5th, 2018 2:45 PM Author: Jet-lagged turdskin
A check on its website for meal kits reveals prices upward of $30 for two to four meals with “free shipping.”
---
Have Trump and Boom taken over the culture of quotes?
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539832) |
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Date: March 5th, 2018 3:08 PM Author: bateful onyx pozpig organic girlfriend
poor RC?
the market need is that many people want to cook healthy and tasty meals on the weekdays, but have limited time.
BA is not popular, for among other reasons, because the recipes are retardedly complicated.
it would be popular for a meal delivery service to actually make the cooking take less time by doing a lot of the prep work. it'd be like having a sous chef do some of the prep work.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539995) |
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Date: March 5th, 2018 3:18 PM Author: bateful onyx pozpig organic girlfriend
you're obviously trolling/schtick at this point. no need to get into subthread wasteland with you about why someone who likes to cook but has limited time during the weekdays would benefit from a sous chef.
and obviously freshness is a huge problem.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540071)
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Date: March 5th, 2018 3:23 PM Author: irradiated station tank
>> the market need is that many people want to cook healthy and tasty meals on the weekdays, but have limited time. <<
but Blue Apron doesn't really solve that because it's complex.
cooking actually doesn't take that long if you make simple things. like, i can marinate some shrimp in the AM greek style and then cook them up when i get home with a mesclun salad on the side. that's easy and healthy and doesn't require much time.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540098) |
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Date: March 5th, 2018 3:24 PM Author: bateful onyx pozpig organic girlfriend
">> the market need is that many people want to cook healthy and tasty meals on the weekdays, but have limited time. <<
but Blue Apron doesn't really solve that because it's complex."
breh, you didnt finish reading my poast. i wrote:
"BA is not popular, for among other reasons, because the recipes are retardedly complicated."
we agree
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540104) |
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Date: March 5th, 2018 3:26 PM Author: irradiated station tank
you also didn't finish my poast
>> cooking actually doesn't take that long if you make simple things. <<
i'm not actually sure there is a need to be filled here. i think what people WANT is to be able to cook, complex, professional dishes, but in like 10 mins. that's never going to happen.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540110) |
Date: March 5th, 2018 3:04 PM Author: awkward 180 stage degenerate
i used it for a while, and i do see the value proposition, but the market is tiny and there are no barriers to entry.
nowadays every time i see it, it reminds me to open the app and "skip" all upcoming meals for the next few months.
what i'd really like is if more supermarkets/mail order services created slow cooker meals that i could just dump into a slow cooker before i go to work.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539960) |
Date: March 5th, 2018 3:07 PM Author: marvelous mint den
DGAF about their share value, but we’ve been Bapronmos for like two years.
Good meals and variety and you dont end up spending a fortune on booze when you go out.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539983) |
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Date: March 5th, 2018 3:22 PM Author: marvelous mint den
Delivery on Wed, usually use Thurs, Sunday, Mon/Tues.
With both of us prepping and cooking, less than 30mins.
Portions are enough for us both to eat and then one has enough for lunch next day.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540092) |
Date: March 5th, 2018 3:09 PM Author: copper mind-boggling dog poop windowlicker
wtf is up with meal kits when you can literally buy finished meals from restaurants for the same price?
ljl at silicon valley. just lol
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35539999) |
Date: March 5th, 2018 3:51 PM Author: Sable vigorous sex offender
I did it for a month and never really got the point of it. It's for people too bougee to buy their own groceries and too poor to order out?
The fatal flaw for me was having the same portion as my GF who weighs half as much as me. Also the healthy thing is complete flame
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540306) |
Date: March 5th, 2018 4:12 PM Author: Razzmatazz range stain
In short, 150 meal-kit startups were founded over the past five years, according to a report cited by the Wall Street Journal in January.
My god
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35540459) |
Date: March 6th, 2018 12:14 AM Author: haunting hideous indirect expression
No one is really analyzing the pros and cons of Blue Apron right here. The big pro is that you get new recipes delivered to your door with interesting ingredients all measured out. Cooking new things is insanely expensive and time consuming because (i) you have to figure out what to make, (ii) if it is something new you have like half the ingredients, and (iii) you end up buying $20 worth of cumin when you just need a teaspoon.
The problem with Blue Apron is it creates more problems. You get an insane amount of packaging like its a heart transplant. There isn't enough food. You have to buy and cancel all these dumb meals.
The end result is that Blue Apron had an amazing business idea, but they didn't realize that grocery stores would be 50x better at executing it. All they have to do is just repackage a bit of food, put it on an endcap, and say "make your own X today" and people can just throw it in their cart.
(http://www.autoadmit.com/thread.php?thread_id=3910570&forum_id=2#35543897) |
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