Blue Apron, one of the early pioneers of prepared meal kit delivery, today said they would be cutting 6 percent of its workforce, equaling more than 300 positions (hat tip to Recode). The move impacts jobs across both the corporate offices and fulfillments centers and was described in an SEC filing as “a company-wide realignment of personnel to support its strategic priorities.”
Given the rough start the company has had since going public in June of this year, one imagines the most important strategic priority is to make more money. But it was always going to be tough going for Blue Apron for a variety of reasons:
The meal kit delivery space is crowded. Blue Apron faced competition from straight up competitors such as Hello Fresh and Home Chef, device makers such as ChepSteps and Nomiku, as well as an 800 pound Amazon gorilla which launched its own meal kit service and bought Whole Foods shortly after Blue Apron’s IPO.
Making money in meal kit delivery is hard. Blue Apron lost money for years as it headed into its IPO, and the company had to slash its valuation before going public. It was expensive getting and retaining customers. And if that wasn’t enough, a Buzzfeed report from last year painted a pretty grim picture of worklife at its fulfillment centers.
Perhaps the biggest threat to Blue Apron is its own raison d’etre. Does it need to exist? My family tried Blue Apron a couple of times and we discovered that it was… too much work. Despite all the portioned ingredients, making an actual dinner still took a lot of time.
Plus, dinners are more of a day-of kind of decision (see: Amazon’s meal kit). What am I in the mood for that night? Not, what will someone send me next week that I’ll have to eat because I paid for it and I don’t want to throw away food.
No one is celebrating these layoffs, especially for an innovative company that legitimately paved the way for others to follow. But Blue Apron needs to do something (other than a barrage of podcast ads) to turn things around.