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They are a middleman that could be easily bypassed by bigger players, and investors are calling them out on that. Also, customer retention and cost of customer acquisition remains a big issue.

No reason why Amazon couldn't just tack on nice recipes to their food delivery service and the acquisition of Whole Foods makes that direction even more likely. Blue Apron is in a dangerous and precarious spot and that's being reflected in the lowering of valuations.

We're going to see more "disrupters being disrupted" as value chain consolidation continues to evolve.

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The Whole Foods supply chain, which does a fantastic job of transparency, is often glossed over. It's hard to deliver the kinds of information they do at the scale they're at. I'm talking about things like what farm the produce came from, how was this beef finished, etc. I'm often amazed that even at farmer's markets, I don't get this information.

I sense Amazon will consider how they can build off of that supply chain to open up new opportunities. One of these opportunities might be different meal kit services.

For comparison, Blue Apron claims they have 150 farms. But I can't find anywhere, for example, what farm produced the produce for any particular meal. Maybe the information is there, but I suspect produce is mixed together in order to ensure the supply of each menu just works. So, a WF-based supply should be able to use a the "local" tag on their meal kits and create a much more distinctive differentiation.

Meal kits will be popular, but I don't sense there will need to be a large national distribution. Even Amazon will probably need to contend with regional and local providers. But Amazon does a good job of being a business platform, such that they might be the place a local business could source the ingredients and distribute to customers. I don't see how larger companies like Blue Apron could become platforms.

I'm talking about things like what farm the produce came from, how was this beef finished, etc. I'm often amazed that even at farmer's markets, I don't get this information.

Then you're not really at a farmers' market, are you? At mine I look at the sign and it tells me what farm's table I'm standing in front of.

Many "farmer's markets" do not prohibit resellers; it's a major problem for both customers and farmers.

You would be surprised as to how much stuff sold at a farmers market wasn't grown at the farm whose stand you're in front of. At least around here, they're not cheap - there's a strong incentive to buy whatever you don't grow so that you can sell it at the farmers market.

It's crossed my mind more than once to go into Shaw's, buy a bunch of stuff, and sell it at the farmers market that sets up in that very same parking lot every Saturday. Given that our supermarkets even sell local stuff, I can still call locally grown and not be lying to anyone.

I see this with semi-durable foodstuffs like Honey or Jam. Where _maybe_ some of it is from the local, but much of it is from elsewhere.

With honey it could also be that they process locally, and call it local based on that. You really can't verify anything at all at a farmers market.

The Farmer's Market I used to visit regularly when I lived in the city had a policy of actually visiting the farms before allowing them to become vender's, so check and be sure that they actually had an operation. Of course, that doesn't prevent them from buying extra produce and re-selling it- but nothing stops Whole Foods from mislabeling their produce, either... haven't they been accused of doing this in the past?

I recently popped into a farm stand in NC. This was a stand sitting in front of a farm describing how you could buy their wares. I was suspicious of some of the stuff in the bins as it was out of season, and sure enough I'd see "product of Mexico" stickers on some of the produce.

And that's a stand on a farm much less a farmers market.

I'm in Maine, so at least there'd be some ambiguity there - we have a town called Mexico!

Seriously though, the idea is that people want to do their shopping in one place. If you do produce, there's a lot of pressure to stock all of the produce anyone could want, for fear that they won't stop just to buy what you grow.

Ironically, part of their pitch to customers is "By cutting out the middle man and delivering ingredients at their freshest."

I also see it from my own perspective: As blue apron gets millennials cooking again, more and more of them will remember what the grocery store was for -- as they will now experiment with recipes on their own, buy their own ingredients, maybe attend a farmers market or two and meet the growers of their food and support local farms. As grocery stores become more convenient to check in/out, Blue Apron's value goes further and further down.

Is it just me, or has every farmer's market I've ever been to been a terrible disappointment? The produce isn't as reliable as a good grocery store, and when it is, there's never enough of it.

Sample size: New York (Brooklyn and Manhattan) and Los Angeles.

FWIW, cooking isn't an interesting side hobby for me: I cook pretty every meal my family eats from scratch, and it's hard enough planning and executing 21 meals a week without dealing with artisinal suppliers.

Just you. Some smaller towns farmer's markets are amazing.

Point 1: that probably depends on your farm's markets. Indianapolis has one ever Wednesday. Being in the heart of the heartland, it's pretty good. Down side is it closes too early for folk that work on the ring of Indy (I465 to downtown is about 30 minutes, so it's hard to hit up on a lunch HOUR). Point 2: I'm working on getting that 21 meals planned fixed. Unfortunately, it's just me and my wife, who's a Social Worker by training. Going to be a while since it literally took me 4 months to get the security system in place. Look for a Shown HN.

Ithaca has a great farmers market, lots of pop-up farmers markets, and even a lot of farm shares around the community.

What are you thinking expecting major metropolitan areas to be good places for farmers markets?

Although I'm told the one in Seattle is supposedly legendary...

I cook most of the meals as well. I do 90% of my shopping at traditional grocery stores, and use the weekly farmer's market as a way to experiment over the weekends. At least in SF, they're high quality and typically have a wide variety of things I wouldn't find (or buy) in grocery stores. We have a few kids, so it's nice to have a reliable menu throughout the week, then do something fun like a smorgasboard of oysters, salads, bread, and cheeses for lunch on a Saturday, crab tacos for dinner, and omelettes the next morning. The constraints enforced by seasonality and the availability of atypical ingredients is refreshing.

This is pretty much our household.

As an aside, it's interesting to see how others introduce new foods to the rotating menu. I'm pretty conservative: cook a new dish and serve it on the side on night T, and if it works, it becomes the main dish on T+1.

I cook most of my meals also but find recipes too troublesome. Meat, veggies, some oil in a hot pan. 10 minutes, done. Sometimes a roast if I have the time.

Bay Area and Los Angeles (Echo Park) both have farmers market in spades that blow away the local grocery stores.

You need to look for local farmer's markets, not the faux-distributor's ones. I think what you need to know about Farmer's Markets is that you must buy (can only buy) in-season produce. While this might disappoint the regular grocery shopper who is used to bad tomatoes in December, to the the chef, its a great delight to be able to pick from only the right season's produce.

There are farmers markets where you have local farmers come together as part of a co-op or some other organization and sell their produce, and then you have "farmers" markets which are basically outdoor grocery stores that sell the same things in your big chain grocery stores.

You have to go to a "real" farmers market. The best way to tell is check out where all the delivery trucks are and read some of the boxes. If you see "product of California"" or "product of Mexico" on many of the boxes and you are in a farmers market no where near Mexico or California, you are at an outdoor grocery store.

The outdoor grocery store version (however fake and lame) addresses the exact issues parent sees. Real farmers markets will have a limited and seasonal supply of produce.

I used to think that there was no point in going to a farmer's market. But I went to one for the first time in Columbus, Ohio and bought some blackberries. I remember very distinctly waiting for the bus to go home, eating one of the blackberries, and thinking, "Oh, so this is why there are farmer's markets."

I've had this experience as well, but usually about 400 miles away from where I live.

It's a shame.

It isn't meant to be as reliable. There is only supposed to be corn or apple or blueberries at your local farmers market for the relatively short period of time every year when they are in season where you live. Instead of going to the farmers market with a list of ingredients for what you want to make, you are supposed to go and see ingredients are available and plan meals accordingly.

Compared to the modern supermarket where everything is available all the time it is certainly a pain in the neck. But in exchange you (sometimes) get produce that's so much better than the visually flawless but tasteless items you often get in a supermarket that it doesn't even seem like the same plant.

> you are supposed to go and see ingredients are available and plan meals accordingly

Farmers markets are not part of a serious urban domestic supply chain where reliability matters. They are for fun, and that is ok! I love picking up a weird jar of flavored honey or some fresh blackberries for snacking. I just wish people would stop suggesting that farmer's markets are some kind of solution to all that ails the urban cook.

I get the urge to go back to simpler times when people spent two hours shopping before spending all day over the stove, but by and large, I think it's silly. We've moved on, and the number of people that turn up unannounced at our home for a warm evening meal tells me that even the degraded produce in markets today is more than sufficient to produce great meals.

Sorry to hear your experience. Mine is the opposite.

I live between the Union Square and Abington Square farmers markets in Manhattan.

Delicious food

Great variety

Low prices in season

Friendly farmers

They've made nearly all grocery stores into disappointments. I get over 90% of my food from them and my CSA. Plus I bring my compost there. Because of them I cook nearly everything from scratch, with ingredients picked around 24 hours before I bought them.

Shopping at those farmers markets, and picking up my CSA delivery is the highlight of my week: I can't wait to see what I'm going to love eating.

I don't want surprises, I want reliability.

And I definitely don't want to drag my compost through lower Manhattan.

Nothing wrong with that but I think you're showing up at the wrong place. It's like going to a flea market; novelty and maybe deals are the point more than knowing they're going to have whatever it is you need.

Yup, I've said as much elsewhere in this thread. Good for fun treats, not so good for the urban resident trying to get a cooked dinner in front of his family every meal.

> not so good for the urban resident trying to get a cooked dinner in front of his family every meal.

Vegetables from the farm is how I create meals every day, plus legumes and nuts from the bulk food store, probably 90+% of my calories. I don't buy packaged food. My vegetables come from the farmers market and farm share.

I bring compost through Manhattan because I love living here and the alternative is putting it into landfills, which I'm not willing to do. It means carrying a few pounds a few blocks maybe once a month to where I was going anyway to get vegetables that are more delicious, healthy, and cheap than any alternative.

These are all improvements to my life.

How do you say it's cheap in farmers market? My experience in SF and SEATTLE is always that farmers market is way more expensive than Safeway or Costco.

I'm with spodek here - I also live near the Union Square Farmer's Market and it's a terrific resource.

Sometimes I'm feeling like something specific for dinner that may not be in season - and thanks to modern agriculture I can still go to the supermarket and get the ingredients. That's definitely not a need that the farmer's markets can fulfill.

But you absolutely can cook very reasonable dinners with the seasonal ingredients you get at the farmer's markets, and I enjoy doing so frequently. Doing this repeatably and reliably for dinner requires a wider breadth of recipes, but IMO is a skill well worth cultivating for not just nutrition but taste.

Personally, the changing of food with the seasons is IMO one of the great joys of life.

It feels like you're talking past the others in the thread here - many of whom can and do rely on CSAs and farmer's markets for their everyday cooking (and not just "fun treats"). Nobody's saying you must not use supermarkets (I sure do), or that CSAs/farmer's markets are the only way to go, but they are fairly complete sources of ingredients for meals.

Come to Rochester, NY. Our public market is AWESOME. Super cheap, tons of quality produce.

Union Sq market on Saturday blows every grocery store away, catches it on a way out, and blows it away again but that's probably the only farmers market that has the scale and popularity needed to replace a large section of a grocery store

The Madison, WI farmer's market is incredible[1]. They block off the entire capital building, and thousands of people go. That was my and my wife's Saturday morning tradition for years while we were in grad school, and we still go back a few times a year.

http://dcfm.org/markets/saturday-on-the-square

Holy crap, the farmer's market takes EBT. That's awesome!

So does the farmers market in berkeley, and they double the value of it to incentivise lower-income people to eat healthier food.

I feel you on cooking not being a hobby. However where it clicked for me: Once I got good enough at it, I realized I could 80-90% of the time cook food that tasted way better and was a lot cheaper than what I could find out at a restaurant. Then it didn't become a matter of hobby but a matter of practicality. Some of my own personal specialities: Omelettes and steak. Almost every restaurant I have been to has no idea how to properly execute an omelette. They are suppose to be light and fluffy, not wrapped-up scrambled eggs. Also, most restaurants have no idea how to grill a steak, especially if it is a thick cut. When you learn about the reverse sear technique, you'll never waste money buying a 50$ steak dinner out again.

The only other problem left at this point is the efficiency equation -- can I think of, buy and then execute on the ingredients faster than it takes for me to drive, get seated, and eat my meal at a restaurant. I am finding the more I do it, the more the answer becomes: yes.

Reverse sear is effectively doing something similar to using sous vide. It works very well.

The only time I go to steak places is for business dinners as they often seem one of the defaults for high-endish places to take customers. But I basically never go on my own. They're generally pretty boring and steak is something I can make easily at home. When I go to fancier restaurants I usually have something that would be way too fussy for me to make at home or that I simply couldn't do a good job of.

I'm the exact same way. There is a very scientific and analytical aspect of cooking that people miss out on and I think would appeal to many more here on HN. Baking is the ultimate example in my opinion of you must get everything perfect -- measurements, mixture, consistency, and cook time. It's applied physics. Plus, the best part is you get yummy treats to enjoy afterwards as your reward.

That's true but it's actually why I'm usually more of a cooking person than a baking person :-) Sous vide and reverse sear notwithstanding, I tend to be more improvisational than someone who carefully follows recipes.

Ironically, part of their pitch to customers is "By cutting out the middle man and delivering ingredients at their freshest."

If that’s actually the pitch, I’m...astounded. Unless they’re in the field picking this shit themselves, they’re the very definition of “middle-man”. If they want to make themselves feel better, call it “value added reseller”, but you’re still a middle-man.

And maybe they are out there, in the field at the crack o’. But I have my doubts.

I imagine the middle man they're claiming to cut out is the restaurant. Because with these services, you're the restaurant!

Well the middle man they are cutting out is food distributors. Most farmers sell their food to a distributor, who then sells that food to grocery stores. Blue Apron contracts directly with farmers.

I haven't tried Blue Apron or any of Amazon's meal delivery services but I do use one of BA's competitors. I don't have the time to plan multiple meals a week for every week of the year. I don't want to make one big meal at the start of the week and eat leftovers for the rest of the week.

Furthermore fresh ingredients get delivered to you in the right portions. When I've done this in the past I end up with way more ingredients than I need that end up getting thrown out.

These services also give you a way to quickly try a meal out and decide if you like it or not to make it again in the future. If so you keep the recipe card.

There is absolutely value in these meal services.

I think it's likely that Amazon and Whole Foods can replicate this process though and they will be able to drive down costs due to their distribution power and economies of scale.

"Furthermore fresh ingredients get delivered to you in the right portions. When I've done this in the past I end up with way more ingredients than I need that end up getting thrown out."

Unless you're throwing out ~60% of the ingredients you buy, surely grocery shopping (Or, if you don't want to shop, grocery delivery services) are more economical. It's also probably better for the environment, given the amount of packaging that goes into Blue Apron meals.

Yep. Sure I end up throwing out scallions and parsley that are past their prime but I'm pretty sure I still come out ahead in terms of price versus meal kits.

That said, the waste argument in the other direction also seems overblown (all the plastic bags etc. that BA and many of its competitors use). I'm pretty sure that if you looked at the carbon footprint--or whatever measure you want to use--for Chinese takeout or other prepared food options that people don't think twice about versus "wasteful" BA, you'd probably find those other options were a heck of a lot worse.

(I agree BA is probably somewhat wasteful compared to regular grocery delivery but I'm betting it's pretty small potatoes in the scheme of things.)

I heard farm to trashcan waste is the worst. Blue Apron seems to mitigate all of that and most of their packaging is recyclable. Just what I heard, don't know how the industry really works. We have reproduced several recipes with red cabbage and thrown out more than 60% every single time.

I am very curious what Salzberg has to say about this. They do seem to have done a good job out-maneuvering the direct competition. However, looking through their website, it does seem hard to find a niche they can play when the inevitable 'me-too' introduction from a behemoth comes. It's also kind of comical how they preach the "Eliminating the costly middleman" card even though all they've really done is become their own version of a costly middleman.

> It's also kind of comical how they preach the "Eliminating the costly middleman" card even though all they've really done is become their own version of a costly middleman.

Without sounding crass or like a broken record, thats all most of Silicon Valley startups are: the new middleman. More efficient, sure, but still a middleman. I believe the colloquial term is "platform".

Good point

"Eliminating the costly middleman" can be read more honestly as "Eliminating the costlier middleman that adds little value in favor of ourselves, a (theoretically) less costly middleman that adds more value".

If by "even though all they've really done", you mean,

(1) They've opened several proprietary warehouses,

(2) They've developed direct sourcing relationships with numerous farms, cutting out any distributors/wholesalers/etc,

(3) They've hired chefs to figure out how to take real-time supply data from (2) and convert it into recipes, with the right portions, that account for seasonality, weather, and other supply variations,

(4) They've executed a consumer marketing campaign that's led to over 159 million meals served across 25 million orders

then sure yeah, they're just a "costly middleman".

I don't use this service, but you might try reading their S-1. It contains a lot of interesting commentary on their strategy, and hard data on the business. I don't know whether this thing will be worth its IPO price, or have a lot of upside when it goes public, but I do think there's space in the market for a company that handles all the logistics and gets the exact right quantity of stuff on your table. Per their S-1, 21% of all food purchased in the US is thrown out - that's plenty of room for innovation.

Also, consider that they've done all this on $195 million vs. $675 million blown by Instacart. I know for sure which one I'm more impressed by, but you be the judge.

By "even though all they've really done", I mean most of those achievements could be replicated by supermarkets without spending 18% of their revenue on marketing. They coined the "costly middleman" term in this scenario, I'm sure you could fluff up a lot of achievements about any company in that indsutry in terms of the nature of their supply chain.

>No reason why Amazon couldn't just tack on nice recipes to their food delivery service and the acquisition of Whole Foods makes that direction even more likely. Blue Apron is in a dangerous and precarious spot and that's being reflected in the lowering of valuations.

It's a lot more complicated than this and it's distressing you reduced it so much.

The expansion for Amazon would be dramatic and expensive.

Right now, Amazon is a warehouse business that re-sells food products which already pass regulation and inspection.

You're talking about Amazon becoming a food business that prepares uncooked food and re-sells food, which must be regulated and inspected.

These services don't just send you a prepackaged spice container, they individually portion out most of the spices, oils, liquids, creams, etc etc into exact amounts needed.

I guess Amazon could try and find a supplier which would buy high quality ingredients and spices for precise repackaging, but one thing is for sure: it's far more complicated than "add recipes to prepackaged food delivery business"

Yes, but they just started the process of acquiring Whole Foods which does the prepared food thing quite well. I'm sure Amazon would tap into that. It's no longer just a "dry goods in warehouse" business.

This I can absolutely see.

Amazon has WholeFood's staff prepare what are essentially Blue Apron boxes. Produce, meat, and the deli can pre-portion the specific spices and ingredients for each recipe choice.

And then AmazonRestaurants/AmazonNow uber competitor can same day (next hour!) deliver it to you.

That's a real product strategy there. It's noon, you're texting your wife about dinner, you're both having a stressful day, you order a Amazon/WholeFoods dinner for four.

This makes me think of what could be a Blue Apron killer from Whole Foods/Amazon:

Sell the whole package, not individual servings. A dozen eggs; a half-liter of olive oil, the shaker of paprika, etc. Then, when new recipes come up, the customer typically only needs one or two things; you can track what bulk items they've recently purchased and suggest that maybe they want to reorder a new bottle. Yeah, the first couple orders might be expensive, but it would quickly turn into a groove where most delivery items are perishables, and the overall cost would be less.

If I lived slightly farther away from a supermarket than I do (1 block), I would totally subscribe to a service like this.

This probably isn't much of a stretch from supermarket delivery services that have reorder options - if WF/A doesn't have that already in the works, I expect they will soon. It really just coordinates it with a menu-of-the-day service. And if WF/A is smart, they'll make an API for this so anyone with menu-of-the-day inspiration can create their own startup built on the food delivery platform and take a small cut.

I don't see this ending well for Blue Apron.

That is a genius idea and I hope Amazon is listening. This would absolutely kill Blue Apron for me especially if they can ensure some kind of local supply chain. That would be great.

They already do this in the NYC area. The AmazonFresh facility in New Jersey that serves the area has a complete deli and bakery the churns out all kinds of prepared meals.

Amazon would end up having a lot of counterfeit ingredients at the end of the day.

Amazon already offers subscription-less premium mealkits via a partnership with Martha Stewart/Marley Spoon [1] and more affordable options via their Tyson Tastemakers partnership [2].

[1] https://www.amazon.com/b?ie=UTF8&node=14828691011 [2] https://www.amazon.com/b?ie=UTF8&node=16207550011

Amazon Go already sells "meals in a box." It's only a matter of time before Whole Foods Express (called it) totally takes the wind out of their sails.

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