MarketLine Blog

Blue Apron – Changing the way of eating and buying food

The US meal-kit delivery service is projected to be a $5bn market over the next three years. Though space is already crowded, a start-up company, Blue Apron, managed to carve a niche out for itself. By recognizing the educational void for the multitude of home cooks and building a wildly successful business around feeding them, while sharpening their kitchen prowess, the company managed to build a $2bn recipe-delivery business with 2,500 employees, in 36 months.

By designing its business model around supply chain efficiencies, the company managed to get fresher food at better prices and prepare smart menus based on upcoming demand. The next factor in Blue Apron’s success was its own content marketing strategy, which does not just look for a quick sell, but towards creating long-lasting relationships with their visitors. Its main goal is always to generate excitement about a dish before it is even delivered to the door.

Blue Apron will now have to prove its worth to shareholders, while fending off competitors. In June 2017, the company decided to test  Wall Street’s taste for easy meals and filed its preliminary documents to go public, seeking to raise more than $300m in the IPO, a move that will shore up its war chest as it looks to expand into broader markets. This makes it the first company in this overcrowded, on-demand subset of tech startups to go public.

However, the investors’ reaction was not as enthusiastic as expected. While Blue Apron’s revenue growth has exploded, net losses have also grown, due to high marketing spending. It is yet to be seen if Wall Street orders up Blue Apron shares.

The future will show if the company’s vision to build the largest fresh-grocery distribution platform in the country will come true. As consumer tastes continue shifting toward healthier eating, the opportunity for companies providing healthy, yet convenient options will only get bigger. However, Blue Apron may have been effective initially through word of mouth and promotions, but as it gets more and more expensive to acquire customers, the company has to figure out ways to keep them for a longer amount of time in order to earn back that spend.

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  • change in happen

    susan on 30 October 2017 at 6:40pm

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