Blue Apron’s stock price has dropped below $1, losing 90 percent of its value since going public last year. The company keeps missing revenue targets, laying off people and a recent retail partnership with Costco was halted for the holidays.
It seems increasingly unlikely that Blue Apron will be able to pull itself out of this tailspin, and a sub-one dollar share price certainly won’t help. All this could make Blue Apron an attractive and affordable acquisition target. Grocery Dive laid out a few options for Blue Apron, but I feel like we can go a little deeper: Who should or would buy Blue Apron?
WHAT WOULD A COMPANY BE BUYING?
So what does Blue Apron have to offer? According to its Q3 results, the company has 646,000 customers who generate an average of $233 in revenue, with sales of $150.6 million. Blue Apron also has an active, nationwide logistics and mail order fulfillment operation as well as a supply chain in place. It also presumably has a fair amount of consumer data around when, where and what people are buying.
There aren’t many retailers left who need a meal kit solution. Albertsons owns Plated. Kroger owns HomeChef. Amazon makes its own meal kits. Maybe Walmart? They are making their own meal kits, but Bentonville loves a bargain, perhaps it could jumpstart that offering with a Blue Apron buy. Or maybe Target could jump into the game. Adding meal kits to its groceries would make sense, and is on-brand for the store where you can pick up everything for your house.
OTHER MEAL KIT COMPANIES
The remaining independent meal kit companies don’t have the money to afford Blue Apron, even at a discount. HelloFresh is the market leader and done some acquisitions, but it seems to be redundant for a company with HelloFresh’s existing reach and business. True Food Innovation acquired Chef’d earlier this year, but is focused more on the retail experience–not mail order.
I’ve asked before whether the future of meal kits is frozen dinners. Nestlé owns Stouffer’s, which has rolled out a frozen dinner meal kits in grocery stores. Tyson has their own frozen meal kits as well. Perhaps there’s a brand extension into either mailing frozen meal kits direct or extending into fresh food.
Maybe Uber? Hear me out! Uber Eats is a growing part of that company’s business, and it’s already invested in ghost kitchens to make the food it delivers. Maybe an acquisition could ditch Blue Apron’s existing mail order and turn it into more of a same day meal kit delivery to your door service.
Or perhaps this is an opportunity for a more old school company like Schwan’s. They are already have robust lines of consumer and retail food delivery, and the company has bought into new meal kit businesses before with an investment in baby food meal kit company, Raised Real.
It seems like there’s always a private equity deal to be had. Maybe Blackstone or the Carlyle Group could come in and sell it for parts or combine it with some other of their portfolio companies.
But what do you think? Is there a good fit out there for Blue Apron not on this list? Leave a comment and let me know!