Cash-Burn Threatens Blue Apron 3.5 Months After IPO
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They may have considered that... and not cared. Their job was to pump up the number of subscriptions, sell Wall Street on their growth metrics, and then cash out in an IPO.
Blue Apron truly doesn't feel like a company built to be around for a long time.
Even most chefs start as prep cooks chopping vegetables. Start with watching how to cut an onion and start making dishes with onions.
If people are only buying blue apron to learn then what happens when all their customers can cook for themselves.
I don't use any of these meal prep services, but I know people who do and they love it.
If I can't find something, at the end of the day, pretty much any piece of food seasoned and grilled will taste good.
Fast forward a year, and I can now cook almost everything more to my tastes than any restaurant serves. The one exception is dim sum, which I tried a few times and decided it was far too much effort for far too little food. Very fiddly, you need a lot of patience.
But just, what do you like? Look up a recipe on the internet, go buy those ingredients, and it's gonna suck at first, but practice, practice, practice! (And now, turns out cooking is sexy. Nice side-effect to discover for having been out of the game for a while.)
I do this often. "What is this odd ingredient/vegetable?" Look up a recipe and buy it.
>> Any advice for someone like me who doesn't cook much?
Start by cooking whatever you're used to eating. And keep it as simple as possible.
A one sentence detour: I feel shame for the fuel and packaging these things require.
That said, we are finding it easier to cook healthy things for ourselves by copying the general patterns in the meals.
One pattern for you: get a food in the Brassica oleracea category. Dice it up, cook it in a pan with some olive oil. Move it to the side, and fry a chicken breast in the center of the same pan. Throw some cherry tomatoes and a few teaspoons of vinegar into the pan. After the chicken is cooked, throw a can of some vegetable sauce, like tomato sauce, onto all of it and cook it in the oven for 20 minutes.
Each thing can be substituted with something else, but those are the dance steps for half of the meals.
Get spices ( garlic powder, coriander - whole, paprika, cumin, turmeric, chili powder, ginger powder - the rest is up to you)
Buy a container of chicken or vegetable stock - after you open it and whatever you do not use freeze the rest. Next time just thaw it and use it again.
Soy sauce, vinegar (balsamic and rice ), sriracha, any-other-stuff-that you happen to have, olive oil.
When you have this on your way from work go to a store on a way:
Give yourself a strict ten minutes to get stuff. Decide what protein you want. Get it. Go to vegetables. Pick one thing that is familiar and one thing that is not that familiar. Get them. Get a single bunch of herbs. Herbs make everything better. If you do not have an onion, a tomato, a head of garlic, get it.
Ten minute limit would force you just to "grab stuff" rather than fixate on all kinds of blockers.
Go home, google "Fast and easy <protein> with <vegetable> skillet". Follow directions like a guideline for your CRUD application.
although i would still argue that 10$ for the meal plus the time to cook it is still more expensive than paying the $12-15 to order something from seamless. not worth it to me at all
Their ads say they can deliver to 97% of the continental US
Menu price depends on zipcode. For New Jersey, the price was $9.79 before tax and tip. Californa was $9.99. Also, most national chains like Applebees, Chilis, TGI Friday's microwave their food. The end result is a meal that Blue Apron customers wouldn't consider to be the same quality.
Blue Apron may be overpriced but I can't think of any restaurant that sells comparable meals (similar ingredients) for the same price. Also, actually going to the restaurant is often more of hassle than just staying home and having meals delivered.
I don't know many restaurants near major cities that do that. Especially if you factor in drinks, tip, etc.
Right, but at home I can enjoy a drink of my choice for cheap. At a restaurant I can pay several dollars for a drink, or I can drink water. (Unless it's a BYOB. But that's for alcohol, and I don't drink that often)
> you should also be factoring in the time and electric/gas (Stove/Oven, Dishwasher)
The time isn't free but it can be fun to cook with somebody. YMMV obviously. Sometimes time we enjoyed it, sometimes it was more work than we felt like.
Gas/electric resources to cook and wash? Pennies.
For £5 you can get.....a frozen burger and a pint of pepsi from a local pub? I can't think of any restaurant that would have starters this cheap, much less mains.
The demand for me is that it's fresh, delicious and I learn a lot about cooking while making it - it's been 100% worth the money so far.
This is where the price premium is worth it to some people.
For the record I believe you have the nail on the head, as to the value of that service.
I don't buy a bunch of portioned ingredients for a set of rescipies, just a lot of basic ingredients and some wild cards to keep it interesting. As long as you have a good set of spices, oils, and garnishes you can find some way to prepare your random leftover ingredients into something pretty good.
I remember just hanging out with my mom/dad/grandparents when I was a kid watching and helping them cook. I always thought that was pretty standard along with watching and learning about all kinds of other household tasks. Is that not the case anymore? It just seems like such a basic life skill.
We avoid the dreaded, "What do you want?" questions around meals and the app's autogenerated shopping list has really helped us reduce food waste and avoid worrying that we're missing one or two ingredients when cooking a meal.
Have you seen what most people eat when single, and just want some food? It's abhorent.
I have more than a few bachelor friends(or those that use to be), and the food they consume is, well I'd say I wouldn't feed to my dog, but that doesn't quite cover it.
I know they are busy professionals, and I cannot honestly say I have eaten the most top quality foods myself when I have been tired, but they exist from day to day on those things.
I've started using Good Eggs for weekly dinner kits with my SO and have found the meals to be tasty, healthy, easy to prepare, easy to clean up, and we enjoy preparing the meal and sitting down to eat together.
We're both fortunate enough to be in high income professions, and the convenience is worth a few extra dollars/meal to us. It doesn't break the bank.
As for the restaurant comparison, sure we could get cheap takeout for $10 per person, but it wouldn't be anymore near as healthy, and it wouldn't involve any cooking together. A similar quality meal at a restaurant would probably be at least $15 per person.
The point being is that, there are people who value the convenience these kits provide. But I am dubious as to whether there are enough to justify Blue Apron's valuation.
For us it was kind of like a "date night" thing three times a week. It was fun cooking the meals together. More fun than a restaurant really, because we still got to sit down and enjoy a nice meal.
We found the cost (about $10/person/meal) to be about halfway between buying our own groceries and dining out. If Blue Apron replaces dining out, it's actually sort of a money saver.
Groceries are expensive. We usually spend a little over $120 per week for food for two. Our dinners usually come out to like $4 or $5 per meal per person I think.[1] A decent restaurant, not fast food or Applebees... including tip and everything, I find we usually spend around at least $30 for two.
Why did we unsubscribe? Well, it is more expensive than groceries and we wanted to trim expenses even more. And my work schedule makes it hard for me to be home in time for us to cook together, which was half the fun. Also the portions were a bit small... though maybe that's just because my idea of a portion is too big.
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[1] Now, before anybody says anything, yeah, I was a poor student once too. Trust me, I know how to eat a LOT cheaper than that. I remember making $20 last a whole week. Gotta load up on the eggs and rice. Ramen too, but if you're eating a ton of it you gotta throw away at least half of the flavor packets so you don't die of a sodium overdose. Maybe throw a few multivitamins down your throat once in a while too so you don't get scurvy. I actually sort of miss those days.
Me and my SO ordered on and off for a few months, mostly just to try out new recipes and get ideas. Out of everything we tried we've only gone back to make 4 or 5 of the recipes on our own (without re-ordering that meal).
The waste is the biggest issue for me. The price point is a little high, but if you're not relying on it for every meal it's not terrible. The amount of cardboard and plastic that came in every box was absurd.
For the model you describe to work, they'd have to charge quite a bit more for the ingredients that one would pay simply buying them yourself (or, again, totally forgo the prepared food high margins). Premium prices for "ingredients + recipe card" would trigger price inflation complaints from mainstream shoppers who aren't comparing the option to blue apron but taking an extra 15 minutes to get the items themselves.
What's that term for the profits an established player has to sacrifice to compete in a new market?
Wegmans, for example, sells pre-chopped, single-portion portions of steaks, vegetables, grains, etc. (even pasta - pre-boiled angel hair at $9.99/lb that you could get for $0.79 in a box!) as well as ready-to-cook meals that you just throw into the oven/pan and follow a few simple directions.
They also offer "personal shopping" services, where they'll pick out groceries and you just pull your car up... and they're testing out an Instacart partnership at the moment for home delivery.
Grocery stores are on it.
More often than not it will bring more people to your grocery store who would otherwise not come. Plus they are coming to the store already so it's incentivizing them to come in and buy other stuff while they are at it.
Sadly most companies wait until it's too late when they are being eaten by competition, while they were busy worrying about 'cannibalism'.
Personally I just look on allrecipes for something that looks good and follow the directions.
They are marketing their product at people that want to do the prep, the cooking, the whole deal, but don't know where to begin. I loved my few Blue Apron boxes that I got. It was exactly what I expected and wanted.
There is a market for what you describe, but it's not what they are trying to solve.
I could download some recipes online, then go buy the stuff. But then I end up with a whole jar of hoisin sauce that I'll never use again because I didn't really like it, or 2x the ground chicken that I don't know what to do with now.
With the "recipe in a box" style things, they give you what you need, AND how to make it. I used it like a trial. Of the food I got over the like 6 total times I got it, I liked about 10 of the recipes (they give you 3 meals with each box), and we continue to make about 4 of them on a regular basis.
The "regular" ones we now go to the grocery store for, because now we know how much to get, what we can use it for, how long it will store, and where to get it.
I'm sad it sounds like this might not be a sustainable business model, as it was a really nice thing for us, and we do want to do it again at some point.
I guess the closest "traditional" thing to it would be like going to a cooking class. But this was cheaper, at home, and had much more variety.
Why the hell did Blue Apron buy a ranch? https://youtu.be/UpQkAEei08w?t=10m59s
"Blue Apron Reserve", "Blue Apron Farm To Table", etc.
A summary of his critiques:
"They grew too quickly for their own good." Ok, so his conclusions, they should've grown more slowly
"The giant Amazon entered the market and scared people away from them"
Being an even smaller company wouldn't have helped fight amazon. Being larger and in a sufficient position with high enough revenue to try to fight amazon or get negotiate better rates would've. But this exactly contradicts growing too fast]
"Don't buy a ranch" This point is funny, and makes for a catch phrase, but buying that single ranch had no significant impact on their profits. They aren't succeeding or failing because of that ranch. It's something convenient to point to and say a cliche like "you're not focusing on your core competencies", but honestly that likely had a .001 percent impact on their actual business. And no I don't imaging 70% of their management team is focusing on that ranch at the expense of their core business.
This entire video feels like fluff, mad-money style analysis to me. And really gives no insights as to what is happening to their business.
Things I would've found interesting. Are they losing customers? Has growth stopped? What are competitors spending on marketing? What are competitors acquisition rates? How long does the average customer stay? Was it priced assuming it was long term customers, but customers actually only stay less than 1yr then move on? Are single people using it to learn cooking then leave? Do customers that leave, leave the industry or just move to another service? Are customers just hopping/rotating between multiple services?
Answers to those questions would provide some insight. this presentation really had nothing to me. The closest thing was the food safety issue, but again did that actually impact delivery rates? Or costs? is it just normal cost of doing business in produce/meat delivery?
I really expected more from this.
I’m happy that a mandolin is working for you, but there is a lot more to knife skills than slicing - there are a lot of foods and cuts that a mandolin can’t do, and they aren’t difficult or unsafe. As long as you don’t feel a need to be as fast as a line chef, you can do pretty much any cut with about 5 minutes of practice.
I don't even have fancy knives--ever--I buy the $3 knives from the Asian grocery store. They dull after a few months, and sometimes I sharpen, sometimes I toss.
I listen to several podcasts (Bill Burr and Joe Rogan represent) and every single episode they got an ad plugging Blue Apron - except they recently yanked their spots on Burr's podcast because he joked around too much.
They're probably banking on LTV of their customers, but it just doesn't make sense when a lot of your customers cancel after 6 months and it costs 400 dollars in marketing expenses to acquire each one.
I just don't see a sustainable business model. The food industry is remarkably cutthroat, and the margins are already razor thin, even for a restaurant.
As for Blue Apron itself, I recently discovered the pleasures of cooking and for me it is almost a therapy (and I listen to podcasts while I cook, in fact :) but I have a bit more free time than many people. I could appreciate the convenience of the delivery and the recipes but as others have noted the amount of packaging waste is absurd. And once people start cooking they'll quickly realise how easy (and tasty) it can be.
So what they do is, they teach you how to cook. At some point, you'll lose the fear of it (because it really isn't hard). The moment you add the first ingredient of your own, just because you like it, you're pretty much lost to them.
The one useful pivot I could see - but where I can't see the feasibility - is you picking recipes a la carte, and they ship the ingredients prepped. (That's where the major time sink is - and people are always willing to pay to get back time).
That requires a huge number of customers, figuring out how to keep prepped materials fresh, and tremendous automation to be possible. It's a far cry from "we ship these 6 meal kits to you"
A good question for Uber investors.
I also really like freshly that delivers fresh, ready to heat blue arpon quality meals (high end tv dinners, but never frozen)
They're starting to cross-sell with wine pairings, which makes me think they're needing to drive LTV.
The problem I see is they haven't managed to build anything defensive. I've got not real brand loyalty, they're not capturing much information about my meal preferences other than what I order, and we're starting to get repeated meals. We'll probably cancel before the end of the year, even though it's been an enjoyable subscription overall to date.
I'm not bullish on 'em, but would love to be proven wrong. :)
It was pretty good for a bit, but the recipes were not as good as we would have liked. I think services like Platjoy make the most sense in the future combined with automated ordering from services like Instacart.
It makes more sense IMO to only handle half the equation when the two businesses do not need to be integrated. (logistics on one hand, recipe on the other)
I actually think they might've dropped the price on the base box.. but something about that surcharge just triggers a "this isn't a deal any more" reflex in me - it's really offputting for me and has definitely stopped me considering it seriously again.
Also all their recipes are available for free, I don't see their moat. Their recipes and food are good though.