Undercooked
Meal kit maker Blue Apron is set to be acquired by Wonder Group in a deal that values Blue Apron at $103 million — a 95% discount from its lofty $1.89 billion IPO price in 2017.
Blue Apron was one of the first “meal kit delivery” businesses to launch in the US, sending out its first boxes of ingredients in 2012 with a simple pitch: grocery shopping is time-consuming, difficult, and expensive, so why not get a box with everything you need delivered straight to your door? Not a bad idea, but — as it turns out — a hard one to make a buck on.
Unsticky customers
After going public in 2017, the company began to struggle as competition intensified in the sending-boxes-of-food-to-people space. In the first quarter of that year, the company reported $245m of sales but — despite being the largest revenue recorded by the company — it couldn’t translate that into anything better than a $52m operating loss. And things only got tougher from there as ingredients costs fluctuated and industry giants like Amazon and Kroger entered the market. In the end, many customers came for the introductory discounts… and never stuck around.
Even a pandemic boost wasn’t enough to get the company consistently out of the red. Now, Wonder Group envisions using the Blue Apron assets to help them build a "mealtime super app".
