Blue Apron is making another attempt to win new customers, and in the process hopefully gain back some of the users it has lost over a rough couple of years. Yesterday, the meal-kit service announced it is trialing same-day on-demand service in the San Francisco Bay Area.
On its Q1 earnings call yesterday, the company said Bay Area customers will soon be able to order from Blue Apron’s two-serving signature line by noon to have meals delivered between 4 p.m. and 6 p.m. on the same day. “While we have tested same day on-demand offerings through third-party platforms in the past, this is the first time that customers will be able to order products for the same day on-demand delivery without leaving the Blue Apron ecosystem,” Blue Apron CFO Tim Bensley said on the call.
On-demand meal kits were just one of Blue Apron’s new strategies discussed on the earnings call. The company — whose new CEO, Linda Findley Kozlowski, started three weeks ago — also reported they’re continuing to focus on their partnership with Weight Watchers as well as one with Jet.com. For the latter, Blue Apron recently launched its Knick Knacks product, which is essentially a lower-cost version of its meal kit available to NYC residents.
The company, whose stock price is hovering at just over $1 right now, posted a net loss of $5.3 million for Q1 2019 on revenues of $141.9 million. Customer numbers have also dropped, but, as was discussed on the call, part of this was due to reduced marketing spend as Blue Apron continues to focus on reaching customers who will spend more, rather than going after multiple swaths of the population. (Over half of Blue Apron’s customer base earns over $100,000/year, according to Food Navigator.)
Whether on-demand as an acquisition channel will make a difference remains to be seen. Previously, the company had worked with third-party delivery services like Grubhub to offer on-demand meals to customers. The move raised questions, with one industry expert pointing out that third-party delivery is about quick convenience and “Blue Apron does not offer immediate satisfaction as there is cooking and preparation required. In that sense, there is a certain incompatibility between the two offers.”
That same incompatibility remains in place even with Blue Apron bringing the on-demand concept directly into its own ecosystem. The goods may be waiting at your door when you get home, but you still have to prep and cook them. Having to order by a certain time then wait four to six hours for your kit also feels somewhat antiquated in an era when Amazon offers two-hour delivery, Instacart will dump the same set of ingredients at your door in an hour, and restaurant delivery is more popular than ever. And as Nielsen reported recently, even those affluent consumers are opting to buy their meal kits in the grocery store, which seems far more convenient, not to mention better for food freshness.
If Blue Apron can stand up to these factors, it might still have a shot at staying relevant in the meal kit sector. At this point, though, offering on-demand boxes feels like an incremental step on a downward staircase.
Leave a Reply