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.
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.
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 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.
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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."
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.
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
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.
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.
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.
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".
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.
"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".
>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"
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.
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.
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.
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.
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].
Has there been an evaluation of environmental impact of distribution? While i would love pess packaging (some of the things they package individually are absurd), i am more concerned about rerouting the grocery distribution chain through a packing plant. This is already the most environmentally destructive leg of transport, and they seem to multiply that cost by some constant greater than one.
But of course, most plastic recycling is a myth, especially if you add in the environmental impact of collection and processing.
Curious about this - and I mean it in a 100% sincere way - how much waste does Blue Apron generate, and why is it unreasonable? How does it stack up to other common forms of waste generated by households?
They send individually packaged everything. Three meals amounts to about this much trash (those pieces of paper are full size 8.5x11" for scale. https://pbs.twimg.com/media/CU1N8VJVEAATbNG.jpg:large
The giant foil insulator (shown) and gel ice-packs (not shown) were what did it for me. I found conflicting information on whether they were recyclable, but the best answers I could find indicated no. Apart from those pieces, the remainder of the waste (shown) was a lot, but not totally unreasonable.
Basically, there are a bunch of plastic bags, an ice pack, some mylar-type bubble wrap, and the cardboard box. Personally, I find the waste complaints overblown. I suspect you'd find a whole lot more waste with restaurant cooking for example and I actually reuse a fair bit of the BA packaging for other purposes.
There are other services that have more of a focus on reusable containers but I have to wonder how much boils down to virtue signaling. I'm a bit skeptical that a reusable insulated package that UPS needs to make an extra trip to pickup is really that much less wasteful than what BA does.
> you'd find a whole lot more waste with restaurant cooking for example
Why would you say this? When I worked in restaurants, I remember very little waste (other than actual food waste and spoilage, of which there was tons.)
>other than actual food waste and spoilage, of which there was tons
Well yes. Not plastic bags but the overall level of wastage. (To say nothing of the energy/materials overhead associated with operating a restaurant.)
I have nothing against restaurants. I'm just saying that Blue Apron packaging waste is pretty small potatoes compared to a lot of other ways of obtaining food.
How accurate are those, though? I've been using Blue Apron for a while and we just put all the stuff in one of the old BA boxes and ship it back to them for recycling and reuse. The only stuff that we can't send back are the pieces of packaging that were used to store meat or other perishable goods and that would be the case for any of these types of goods.
My partner and I have tried several of the meal delivery services (Plated, Home Chef, Hello Fresh) for over a year now. We have not bothered to try Blue Apron, despite the aggressive marketing and less-than-enthusiastic recommendations.
We live in an area where it is inconvenient to find the variety and quality of meats and vegetables available.
It is very obvious to me, that operationally, there are significant differences in the material handling and logistics from each provider.
We now mostly rely on Home Chef. It's variety of ingredients and recipes rivals that of Plated, but its packaging is more thoughtful, like Hello Fresh. In my experience, Home Chef has the most accurate order packaging, as well (missing or wrong items).
I think there's definitely a market for the service but ultimately it needs to fit the everyday household better.
They should have a Blue Apron section in all supermarkets. In the market, we mostly have a choice of cooking from scratch or fully cooked. Having TV dinners everyday does not work for most and starting from scratch is always painful. A middle ground section would do wonders.
Additionally, the fact that they can get squeezed from suppliers, delivery services and supermarkets makes it a hard for it to stay independent as a company. I bet it will eventually get acquired.
The middle ground is probably this: The baseline expectation is you stock some basics; oils, vinegars, spices, etc. Then you select 7 "meals" from Whole Foods website or wherever and they package the main ingredients (meats, veg, herbs,) and send them to you or you pick it up.
Apparently some chains are starting to do this and I've also seen them at a "organic" urban grocer.
I agree with you though. Stores already carry a lot of semi-prepped vegetables, marinated meat and the like. Selling an everything you need kit with a recipe card seems a pretty logical next step.
this was my reaction exactly. who knew the vc community was actually just supporting podcasting. it's kind of like how NCAA football incidentally supports the olympics.
Hmm, why is it that Blue Apron, Audible, Casper, Dollar Shave Club etc. are so common on podcasts for ads? Conversion rates are especially good for those kinds of businesses?
The Exponent podcast did an episode on this. The short answer is they all share a high LTV and can succeed with podcast ads on a direct response basis. So despite the outrageous CPMs some podcasts charge these days, they can still find it profitable.
There was a really good article in Medium about this.[0] Basically the Blue Apron model is too easy to duplicate. As more competition enters the space, the higher the costs for recruiting new customers, to the point where it's no longer profitable.
It's not just the number of competitors although there are a lot of those. It's also that, as they try to expand, new customers will tend to be less of a match for their target demographic. It will take more advertising, discounts, etc. to reel them in and, once they do, they're likely to use the service less frequently or drop it entirely.
It kind of makes sense. With the condition of economy I don't think there will be growing market for fancy meal-kits. For ~9 dollars a kit they put $54M losses last year. This means price need to rise significantly if they need to make money. At say $15 I wonder how many current customer will still see value in kit.
Also in my mails I increasingly see ads/coupons from local grocery stores for quick to prepare meal boxes. May be they are catching up on this trend.
I'm surprised no one has made a meal delivery service catered specifically to Instant Pot owners/enthusiasts. Just imagine, all you need is an Instant Pot and whatever ingredients/recipes they send you and you can cook homemade meals. Go ahead someone, take this idea! :D
At least a combi-oven like that can brown. The problem with traditional slow cookers is that the results you get by just dumping everything in and walking away aren't great. You really want to brown meat first, etc. Slow cookers are still useful but they're not a magical one pot device.
I really don't see how Blue Apron is superior to, let's imagine for a moment, Amazon next-day delivering Whole Foods to your house with a couple of recipes included.
What am I missing here?
I personally think a much better model is high quality cooked or pre-cooked food delivered to your home. Deliver cooked restaurant quality food rapidly, like the ultimate take-out. Or just pop something in the oven for 20 min, etc. Cooking is time consuming and often annoying, the major pain point (for me and most people I know anyway) is not going to a grocery store once a week or finding recipes which are abundant online, it's the actual act of cooking for 30-60 minutes, for every dinner (or lunch), before 5 or 10 minutes of eating.
Maybe I'm the wrong target demographic, who knows.
The planning part is what you're missing. If I order from Whole Foods, I have to decide what to order. If I sign up for Blue Apron, they decide for me. Exactly what I need, no more and no less, shows up on my door weekly. No thinking required.
Of course, whether that's a big benefit (or even interesting) to you or not will vary, but I think it's a material difference.
(FWIW we tried Blue Apron for a little while and thought it was ok, but the pain points they solve aren't big pain points for us. And we found that the recipes we kind of hit or miss for our tastes. So we canceled a long time ago.)
> The planning part is what you're missing. If I order from Whole Foods, I have to decide what to order. If I sign up for Blue Apron, they decide for me. Exactly what I need, no more and no less, shows up on my door weekly. No thinking required.
That's today. Today Whole Foods is not in this business. It will be, however. Because already today I can walk into smaller grocery stores in NYC ( C-Town, Associated, Key Foods ) and in some higher end ones there are meal kits ready. I'm not even talking about Wegmans which periodically makes Whole Foods look like a third rate store. Granted, at this time these are just pre-seasoned steaks and sides already packaged, kebobs already assembled, sides already portioned. They are at a 0-10% markup to the non-assembled prices of the raw ingridents at the same supermarkets.
Supermarkets have been doing this for years in a prepared foods or partially prepared foods section. They know what their customers buy and they know how much they buy. All of that was pre Amazon-Whole Foods days.
Amazon-Whole Foods is the elephant in the room. One needs to be rather irrational to bet on BA or anyone else raising money before knowing what Amazon - Wholefoods do to this market, especially considering that Whole Foods dwarfs all meal services combined in any major metro. Without those major metro customers BA and likes cannot survive.
They're often needlessly complicated because, if they did a Rozanne Gold 3 ingredient thing, you'd be left wondering why you paid a premium to have this meal assembled and delivered.
In all fairness, one approach seems to be to pre-make spice blends and the like which aren't pantry staples. This simplifies recipes but but not necessarily in a way you could do on your own.
Sure. But even then what does blue apron give over blue apron recipes + ingredients delivered by whole foods? Someone else decides what you eat; you just gotta be home and willing to cook.
On top of that maybe they'd stop putting kale in everything because it's so damn cheap to source.
You're right, at least in how you start your post (simply delivering recipes + ingredients from a local grocer). There's just little profit in what you're suggesting.
Their recipes an instructions are nice. But their problem is after I did a trial run, I have the recipes and I'll just go get the ingredients at my local grocery. I can get recipes online for free or from the good cookbooks I already own. Any money I saved by getting just the amounts of ingredients you need is lost to them being an expensive middleman. Sure you might waste less but it's more money to me.
Their recipes are all right. I felt there was too much reliance on olive oil and salt & pepper. On top of that, it was simply too expensive for what it was.
Feel similarly. We enjoyed it for a few months and have added some of the recipes (or variants thereof) to our regular rotation.
IMO, the beef was generally terrible, but most everything else was high (enough) quality.
My biggest complaint is no web UI discoverable way to cancel your account. You have to call someone (or google the hidden cancellation page).
So, for many months now, I've been googling "blue apron" or "plated" and clicking on the paid search ad every week to cancel my upcoming deliveries. ;)
I'm not sure what the target market is. The half lazy? Too lazy to pick up a few ingredients, or go out to eat, but not lazy enough to actually cook it.
Based on the comments here and elsewhere, there is a legitimate target market--which might be more charitably described as people who want to cook at home but don't have the time/inclination to do the other tasks required to cook.
But I actually agree that the use case for these services is pretty narrow. I know they don't really work for me. If I could get quality grocery delivery where I live I might get meal kits as part of that but as a standalone offering the tradeoffs just aren't right. Every time I think about signing up for a delivery in a couple weeks I look at the recipes and go "Eh, maybe I'll just buy the ingredients for that next time I go shopping."
I can't get the same quality of ingredients locally (some are not available) without a tremendous amount of time spent traveling around town.
As far as going out to eat, many of the meals rival anything I could pay to have served to me at a restaurant (as well as the time spent traveling).
I'm not sure how valuable your time is, but mine is better spent having somebody deliver me the exact ingredients I need to create a delicious meal with minimal effort on my part (aside from cooking, which I enjoy).
Maybe you enjoy waiting in lines and traveling? I do not.
I use BA. I average about one order every 4-6 weeks. I'm also an avid cook, so at first it seemed like cheating/lame. However the workflow I've developed is to watch for weeks where 2 of the 3 options are something out of the ordinary that I'd never normally to think to make for myself, particularly when they use an out of the way ingredient.
Particularly for the latter purpose, I appreciate that they give me exactly what I need, because I probably don't want to use it again any time soon.
One order every 4-6 weeks, isn't exactly their target audience. Sounds like you just like to try something new once in a while, and Blue Apron happened to have it.
That's a fantastic question, one I'm sure investors are considering. At this time it seems the answer might be leaning towards "not enough" but I think it will be interesting to see what follows and what their trajectory is from here.
For another piece of context, the latest numbers I found for online grocery shopping in the US overall was about $7 billion annually--though forecast by many to increase fairly rapidly.
Their meals are overpriced for what you get from what I have seen, I fail to see their value over simply buying the stuff local and and finding a recipe online for free.
for their $60 per week to get 6 small portion meals I can buy over 2x that number of meals shopping at my local store, + snacks and other household items
I am a blue apron subscriber. Issues with the economics of their business and the IPO aside, I like the service.
Have you ever tried printing out a recipe online, driving to the grocery store, and picking up all the ingredients? It's a pain in the ass. Try finding tandoori spice rub, or pink lemons, or dried currants. Chances are your local supermarket doesn't have one or two ingredients, so you leave it our or sub it, but that makes a difference in the taste. On top of that, you're usually forced to buy much more than you need for any given recipe, making it pretty wasteful, and more expensive than it should be. Not to mention all the time wasted physically moving around the supermarket, driving, gas to the supermarket, etc.
The recipes taste great and they're easy to follow. I routinely have better meals cooking blue apron than going out to eat. For me, this is a much faster, cheaper, and better solution. That's not to say this is a great business, personally I think anyone can copy this service, in particular larger companies, so I probably wouldn't buy the stock.
>Try finding tandoori spice rub, or pink lemons, or dried currants.
Made the Chiles Rellenos last night, sure I could get a can of tomato paste for fifty cents, but I only needed a 4th of the can. When I made the catfish curry, I was thinking to myself, where do I even buy curry? Apparently I can go on Amazon and get a 5 pack of 12-serving cans.
I don't think the plastic mass I have to deal with is good, but I also threw out a bunch of my roommate's moldy leftovers while cooking my Blue Apron meal.
You can buy tomato paste in a squeeze tube. Great for that sort of thing. :-)
As I said in a comment yesterday, I suspect that Blue Apron deliberately puts somewhat oddball ingredients, often in small quantities, in their recipes precisely to discourage people from thinking "Oh, I can just pick these up at the grocery store."
As someone who orders the occasional BA shipment for precisely the oddball ingredients, that's fine by me. I'm still using something that I normally wouldn't. And if I find that it doesn't add any benefit to the dish, I'll not bother with it the next time.
If I were around for weeks at a time more consistently, I'd probably use these services more. I actually like the idea even if I know I'm paying 2x relative to picking out a new recipe and going to the store.
I now know what ramps are for example. (They're pretty much scallions :-))
The value of BlueApron isn't on a per meal price basis. As you mentioned, buying the ingredients yourself will be significantly less expensive.
The value for Blue Apron for us:
* I don't have to look through and choose recipes.
* I don't have to spend a hour in the store, we pretty much just get staples (eggs, milk, etc) these days.
* I don't throw away near as much food. We used to throw away around 50% of food purchases due to changing schedules / spoilage. We actually saved money moving to Blue Apron.
* Blue Apron can include specialty ingredients that I won't normally have (e.g. I'm not routinely going to the Korean grocery).
I like to cook. Blue Apron makes it easy to do that while exposing us to new and interesting recipes without committing a lot of time to the process. That's worth money.
> I don't have to look through and choose recipes.
Google: quick and easy <protein> skillet with <what i have in a fridge>
> * I don't have to spend a hour in the store, we pretty much just get staples (eggs, milk, etc) these days.
In less than 6 months of cooking you would get entire pantry of all kinds of dry and canned ingredients needed by buying them in a reasonably sized containers as needed or as the opportunity presents itself
> I don't throw away near as much food. We used to throw away around 50% of food purchases due to changing schedules / spoilage. We actually saved money moving to Blue Apron.
That just means you are overbuying/overcooking. After 6 months of cooking a cost of a "complex" BA like meal without BA should be $2-3 per person even in the most expensive markets in the US.
Blue Apron's cost can never match a cost of buying protein/pantry/vegetable items on sale as neither BA has the infrastructure and volume to match grocery chains nor does it have other ways of squeezing the margins.
Now, you may decide that you do not want to have a pantry or use Google or know that $0.49-0.59 is a good price for chicken thighs and $0.99 is a good price for whole chicken in NYC or that you should not buy turmeric at Chelsea market because it is 4x the price at any other grocery store and that's why you would use BA. The problem is that there are just not enough people like you to make BA profitable, especially now with Amazon buying Whole Foods.
I agree with most of your post, but I think that $2-$3 a person is probably optimistic. I regularly manage about $5.50/meal, but less than that involves cutting back in quality or selection.
These are your most expensive ingredients in NYC today in a non-upscale ( and non-ethnic ) supermarkets. At best you are getting 1/4lb per portion. All other ingredients would barely make a dollar if you don't buy a precious single onion and instead buy a bag of onions or instead of getting a single carrot, you buy a small bags of carrots.
Obviously you don't buy salmon when it is $16/lb as you know that at some point over next few weeks it would be $11/lb. The last one that I got at Chelsea market was $9.99/lb because they did not correctly predict how many were going to be bought as fillets and sushi so they wanted to offload the last two at the end of the day before getting another 10 next morning.
BA cost of raw ingredients is at best 5-10% better than yours when you walk into a random supermarket and just buy non-insanely priced items.
Maybe you're very well-situated, 'cause I've never seen prices in that ballpark. I live outside of Boston (at a T stop, but in the city itself) and there's nowhere I'm getting sirloin for $6 except on sale and nowhere I'm getting chicken for fifty cents a pound.
Yeah BA is way over-priced, but aside from a few of their completely nonsensically simple recipes I've never made anything comparable for $2 - $3 a person. The $5.50 mark sounds about right for me in the midwest and I'm buying pretty good quality ingredients still. I often splurge and go to $8 - $10 a person but that's totally excessive :)
I've cooked and bought groceries in NYC several times and while the prices are definitely competitive with some hunting, the 99c whole chicken I found was total garbage and basically was like water and salt.
My step-dad used to swear he couldn't tell a difference between the $1.99 special chicken and the regular stuff I bought that was $4 - 6.99. To me the $1.99 tastes like eating saline solution (I've had saline injections, it tasted like that to me). Maybe it's just a question of taste.
I personally don't, and can't, use it because my family's too large and the economics outweigh the time (and besides, I like planning and cooking.) I suspect this limits their expansion - I don't see how it can break below the barrier of an upper-middle class that can weigh priorities this way, and I'm not sure that's large enough of an audience to really form a growth strategy around.
Now, curated recipe lists without having to buy the groceris through them is a subscription service I'd pay for. I already subscribe to Bon Appetit for the recipes.
We have a toddler so time became extremely tight. Though it's been wonderful to have nice meals together as a family. The sheer time involved to plan and shop for ingredients makes it seem like a bargain to us.
Not having to entertain in a grocery cart or plan meals around ingredients that can't be bought in small quantities is even better. I suppose it depends a bit on the types of things you like to eat.
Occasionally there is one that I'll have a snack afterwards, but I tend to have a pretty big appetite and find the quantity fine.
I think for most of the people in their target market, if it saves them an hour (or more) of shopping, looking up recipes, etc per week, that more than makes up for the $60.
I tried a couple of these services and while I liked the convenience, I couldn't stand the waste -- a couple dozen little plastic jars and baggies each week going into the recycling.
>I have never seen what value Blue Apron provides,
Its it's not a food product it's a lifestyle product.
As a food product it's no different from buying cheap prechopped supermarket produce and throwing it in a pan. Saves a few minutes or an hour a week at the expense of having to be at home to get the delivery.
As a lifestyle product it's an effortless way to feel like you are cooking for yourself, being healthier, not shovelling readymeals or takeaway food into your mouth so you feel better about yourself. Also the fact you pay quite a lot for it gives you incentive to actually follow the routine.
I like cooking and consider myself lucky for starting the process of learning to cook a few years back. There are a lot of completely garbage recipes out there now. Allrecipes dominates Google but I've never made anything that actually tasted good from that site. I've got experience and know of specific sites that deliver that I use pretty much exclusively now instead of searching Google directly.
However I can see someone just starting out being tricked by one of the many crap recipes out there and just simply wanting the convenience of a quality recipe with the exact ingredients.
I mostly use a mix of TV shows, youtube pages, and regular blog sites.
Food Wishes, Serious Eats, Cooking With Dog, America's Test Kitchen, Maangchi, the forums of pizzamaking.com
Bon Appetit recipes tend to be good when I make them, but they publish a lot of recipes and often times they aren't for food I actually want to make. Good Eats was nice when I was initially learning how to cook, but he sometimes goes over board, especially his weird unitasker rule. The correct rule should be to always critically evaluate bringing a new tool into kitchen, don't clutter it up with a lot of items you will rarely use, and make sure the tool is as easy as possible to keep clean.
> for their $60 per week to get 6 small portion meals I can buy over 2x that number of meals shopping at my local store, + snacks and other household items
The value proposition is, primarily, saving time shopping, meal planning, and portioning-out ingredients.
Whether this is sufficient to justify the cost depends on how you value your time, and whether you find value in spending it on those a activities.
You are paying for convenience to eat a different recipe every day, if I were to buy products that are used in their recipes I could certainly save some money but the problem is in quantities. When you purchase in bigger than needed for specific recipe quantities your ingredients tend to get bad really quickly. Also to be able to make any recipe from the internet you have to have a pretty big fridge and kitchen to store all the ingredients that might be needed. You can of course go to a store everyday and purchase ingredients that you need for specific recipe but then you would waste time and money on shopping.
I have friends who I know have a free subway pass (work buys them for us) but they regularly pay their own money for ridesharing services for trips within the area serviced by convenient public transportation.
I don't mind so much the price. What bothers me is that Blue Apron hasn't really made any accommodations for gluten/vegan options, and I feel like given their price range that might be part of their demographic to target.
But yeah, I guess if you have celiac's or live with someone with celiac's you're just kind of shit out of luck for Blue Apron.
There are specialist companies that do a good job with vegan and gluten-free. Which is part of Blue Apron's problem: there's tons of evidence that they don't have much of a moat.
I think the future will be industrial sized kitchens that cover a large neighborhood, with individual meals delivered by drone to your home or apartment within a few minutes. I could imagine apartments with no or minimal kitchens built to rely on that. Throw in some high quality reusable containers and you have much higher efficiency and sustainability than any current meal delivery service.
I ended up cancelling and vowing to never go back to their service after they didn't credit one of my "come back" coupons correctly. Not that it was the biggest deal, but they deliberately were doing something other than what they advertised and were completely unapologetic about it. That small act lost me as a potential customer to their competitors.
I suspect it's because, as you basically indicate, it's a fairly narrow use case. Want to cook but don't want to think about recipes and picking up the ingredients. I suspect most people want either 1. A prepared meal or 2. Flexibility in selecting and preparing a meal.
The services are fine and in a somewhat different situation I'd probably use them more. But I understand why a lot of folks don't really get their purpose.
Same boat. As are most of my foodie friends. Some nights you go out, some nights you hire a cook and some nights you Blue Apron. They've certainly captured a market with upsell and aspirational potential.
I've done Chefs Plate and Good Food here in Toronto, and while they are great, for people like me living in the city, the delivery is not the most convenient aspect.
My local Supermarket chain, could just put up a rack with meal kits, and destroy most of their market.
I think it's so sad that people can't cook on their own and need a kit to be able to make anything for themselves. I don't know I feel like one can throw anything in a pan with some olive oil and salt and it's always delicious...
My side project Read Across The Aisle also has free unlimited access to WSJ, through a recently-launched partnership with them. I've made an iOS app and Chrome extension (both free).
Thanks, this works. I read somewhere that as of 2017, Twitter and Facebook referrers work for WSJ paywall, and that Google was removed sometime in 2016.
if blue apron IPOs it'll be sunk within 5 years. their product is useless[]. people who want to pay a premium on food and still cook it? sounds like the downsides of a restaurant, food delivery and grocery, all in one.
a really good food delivery service with options to click a receipe and all have the quantity(ies) of all of the necessary foods added into your cart will kill this whole microshopping silliness.
most who seriously want to cook probably want to choose their own ingredients.
[] actually, people who want ridiculously complex meals, but for some strange reason want to cook it instead of buying it already made might like this.
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.