Meal kit company Blue Apron announced this week it is terminating its partnership with e-commerce site Jet.com.
On its August 6 Q2 2019 earnings call, Blue Apron CEO Linda Findley Kozlowski said the company needed to focus on its core business, which is its direct-to-consumer sales of meal kits.
“We have not kept up with the ever evolving needs and preferences of our customers over the past couple of years, and we are behind it,” Kozlowski said on the call, adding that part of the reason for that is because the company “redirected attention of way from innovating in our core offering as we tested alternative distribution channels for the past year and a half.”
Blue Apron made its meal kits available for delivery via the Walmart subsidiary Jet.com in 2018 in NYC. At the time, the company appeared to be looking for ways to revitalize its struggling business through third-party sales channels (the company sold meal kits for a time at Costco stores, too).
But based on this week’s call, that move appears to have been a distraction, and Blue Apron seems to believe stepping away from these third-party sales channels and tapping “unrealized opportunities” within its core business model is the place to invest time and resources at the moment.
To that end Kozlowski outlined a new strategy on the call for the company’s future that includes focusing on fresh food, offering more convenience and flexibility in terms of menu options, making Blue Apron’s various digital touchpoints easier to use, and increasing marketing efforts.
But even if Blue Apron is able to pull its subscription-model business back on track, the company’s long-term viability is still uncertain. Right now, meal kits only account for 21.9 percent of online grocery services used in 2019. NPD recently reported that 93 million adults in the U.S. want to try a meal kit, but the same research also highlighted a shift away from traditional dinner-only mail-order meal kits towards ones that can be found in retail stores and/or cater to other eating times, such as lunch and snacks.
Some meal kit companies have already responded to these trends: Kroger and Home Chef started piloting new meal offerings like “heat and eat” and lunch options, which they sell in Kroger stores. Sun Basket, too, expanded its options to include breakfast, lunch, and snacks, though the company remains a direct-to-consumer subscription service like Blue Apron.
Meanwhile, Blue Apron itself has always had an issue with customer churn, partly because its kits tend to be expensive and time consuming, even for people who love to cook. That means what the company winds up offering customers in terms of more flexibility and convenience in the future will surely give an idea of how successful the company’s renewed focus on its core business will be.
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