Of late it seems like any news Blue Apron releases is always coupled with words like “comeback” and “turnaround” and punctuated with a question mark. Such was the case again this week when the meal kit company launched a partnership with WW (formerly Weight Watchers) to sell home-delivered meal kits focused on nutrition and wellness.
WW x Blue Apron, as the partnership is dubbed, will offer customers a weekly menu based on the WW Freestyle program, which allows members a freer choice of foods to eat on any given week. Those on the plan aren’t required to buy WW packaged foods, and are instead encouraged to eat what they want and approach the program as a lifestyle makeover rather than a weight-loss plan. All menu options for WW x Blue Apron are two-serving recipes priced at $9.99 per serving, or $59.94 per week. Blue Apron will pay a small acquisition fee to WW for every member who becomes a new Blue Apron subscriber, according to Blue Apron CEO Brad Dickerson.
He also said the deal is a way to expand Blue Apron’s customer base. The question is, Will it?
Blue Apron’s struggles are old-hat at this point. It had the worst-performing major IPO of 2017, and in October of the same year cut 6 percent of its workforce. In Q2 of 2018, the company started selling its meal kits at Costco, but that deal was abruptly halted right before the holidays. Meanwhile, Blue Apron’s stock price temporarily dipped below $1 earlier this month. (It’s back up now.)
Anyway, the home-delivery meal kit is something of an endangered species in the face of retail meal kits. Chef’d shuttered its delivery operation in July of 2018 and was acquired by True Food Innovations. It’s now focused on selling at retail. Albertsons acquired Plated in 2017. Kroger purchased Home Chef and started rolling out its kits on store shelves. Even WW has dabbled with in-store meal kits.
Brands can and do come back, but it’s usually by drastic measures and fundamental changes to the way they operate. Blue Apron’s problem has always been about retaining customers. The service is expensive and time consuming, which are a deadly duo in this day and age when it comes to avoiding churn. When Blue Apron pushed the meal kit concept into the mainstream a few years ago, it spawned a host of other competitors offering faster, cheaper goods. As noted above, many of those services have pivoted and now belong to larger organizations who prioritize in-store sales over home delivery. Blue Apron did team up with Jet.com this past year, to sell its kits to the NYC area via e-commerce company. But it seems like regardless of who Blue Apron chooses as a partner, continuing a home-delivery service won’t retain customers any better than it has in the past.
Remember on A Charlie Brown Thanksgiving when he yells “This year I’m going to kick that football to the moon” then falls flat on his back? Charlie Brown’s problem was he kept approaching that football with the same tactic over and over, hoping something would change. Unless Blue Apron makes a serious adjustment to its business model, it’s in for (another) spectacular crash to the ground.