
Blue Apron, Struggling to Woo Investors, Lowers Price Range for IPO - realdlee
https://www.wsj.com/articles/blue-apron-chops-its-ipo-price-range-1498652104
======
code4tee
They are a middleman that could be easily bypassed by bigger players, and
investors are calling them out on that. Also, customer retention and cost of
customer acquisition remains a big issue.

No reason why Amazon couldn't just tack on nice recipes to their food delivery
service and the acquisition of Whole Foods makes that direction even more
likely. Blue Apron is in a dangerous and precarious spot and that's being
reflected in the lowering of valuations.

We're going to see more "disrupters being disrupted" as value chain
consolidation continues to evolve.

~~~
treehau5
Ironically, part of their pitch to customers is "By cutting out the middle man
and delivering ingredients at their freshest."

I also see it from my own perspective: As blue apron gets millennials cooking
again, more and more of them will remember what the grocery store was for --
as they will now experiment with recipes on their own, buy their own
ingredients, maybe attend a farmers market or two and meet the growers of
their food and support local farms. As grocery stores become more convenient
to check in/out, Blue Apron's value goes further and further down.

~~~
kchoudhu
Is it just me, or has every farmer's market I've ever been to been a terrible
disappointment? The produce isn't as reliable as a good grocery store, and
when it is, there's never enough of it.

Sample size: New York (Brooklyn and Manhattan) and Los Angeles.

FWIW, cooking isn't an interesting side hobby for me: I cook pretty every meal
my family eats from scratch, and it's hard enough planning and executing 21
meals a week without dealing with artisinal suppliers.

~~~
ajacksified
I cook most of the meals as well. I do 90% of my shopping at traditional
grocery stores, and use the weekly farmer's market as a way to experiment over
the weekends. At least in SF, they're high quality and typically have a wide
variety of things I wouldn't find (or buy) in grocery stores. We have a few
kids, so it's nice to have a reliable menu throughout the week, then do
something fun like a smorgasboard of oysters, salads, bread, and cheeses for
lunch on a Saturday, crab tacos for dinner, and omelettes the next morning.
The constraints enforced by seasonality and the availability of atypical
ingredients is refreshing.

~~~
kchoudhu
This is pretty much our household.

As an aside, it's interesting to see how others introduce new foods to the
rotating menu. I'm pretty conservative: cook a new dish and serve it on the
side on night T, and if it works, it becomes the main dish on T+1.

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spodek
They create tremendous waste.

[https://grist.org/food/dear-blue-apron-youre-just-making-
it-...](https://grist.org/food/dear-blue-apron-youre-just-making-it-worse)

[https://www.buzzfeed.com/ellencushing/these-are-the-
trashy-c...](https://www.buzzfeed.com/ellencushing/these-are-the-trashy-
consequences-of-blue-apron-delivery)

Promoting reusing or recycling all their packaging obfuscates that there is so
much of it.

~~~
imh
Yeah I loved Blue Apron for a few weeks, but cancelled because there was an
unreasonable amount of waste. I'm sure I'm not the only customer to do so.

~~~
dyim
Curious about this - and I mean it in a 100% sincere way - how much waste does
Blue Apron generate, and why is it unreasonable? How does it stack up to other
common forms of waste generated by households?

~~~
ghaff
Basically, there are a bunch of plastic bags, an ice pack, some mylar-type
bubble wrap, and the cardboard box. Personally, I find the waste complaints
overblown. I suspect you'd find a whole lot more waste with restaurant cooking
for example and I actually reuse a fair bit of the BA packaging for other
purposes.

There are other services that have more of a focus on reusable containers but
I have to wonder how much boils down to virtue signaling. I'm a bit skeptical
that a reusable insulated package that UPS needs to make an extra trip to
pickup is really that much less wasteful than what BA does.

~~~
pessimizer
> you'd find a whole lot more waste with restaurant cooking for example

Why would you say this? When I worked in restaurants, I remember very little
waste (other than actual food waste and spoilage, of which there was tons.)

~~~
ghaff
>other than actual food waste and spoilage, of which there was tons

Well yes. Not plastic bags but the overall level of wastage. (To say nothing
of the energy/materials overhead associated with operating a restaurant.)

I have nothing against restaurants. I'm just saying that Blue Apron packaging
waste is pretty small potatoes compared to a lot of other ways of obtaining
food.

------
gm-conspiracy
My partner and I have tried several of the meal delivery services (Plated,
Home Chef, Hello Fresh) for over a year now. We have not bothered to try Blue
Apron, despite the aggressive marketing and less-than-enthusiastic
recommendations.

We live in an area where it is inconvenient to find the variety and quality of
meats and vegetables available.

It is very obvious to me, that operationally, there are significant
differences in the material handling and logistics from each provider.

We now mostly rely on Home Chef. It's variety of ingredients and recipes
rivals that of Plated, but its packaging is more thoughtful, like Hello Fresh.
In my experience, Home Chef has the most accurate order packaging, as well
(missing or wrong items).

I would put my money on Home Chef.

------
_delirium
Big discussion of Blue Apron's valuation, business model, competitive moat,
etc. here yesterday, for those who missed it:
[https://news.ycombinator.com/item?id=14646679](https://news.ycombinator.com/item?id=14646679)

------
WheelsAtLarge
I think there's definitely a market for the service but ultimately it needs to
fit the everyday household better.

They should have a Blue Apron section in all supermarkets. In the market, we
mostly have a choice of cooking from scratch or fully cooked. Having TV
dinners everyday does not work for most and starting from scratch is always
painful. A middle ground section would do wonders.

Additionally, the fact that they can get squeezed from suppliers, delivery
services and supermarkets makes it a hard for it to stay independent as a
company. I bet it will eventually get acquired.

~~~
ghaff
Apparently some chains are starting to do this and I've also seen them at a
"organic" urban grocer.

I agree with you though. Stores already carry a lot of semi-prepped
vegetables, marinated meat and the like. Selling an everything you need kit
with a recipe card seems a pretty logical next step.

~~~
schreiaj
Publix is starting that (or I'm just noticing it) they have recipe cards
around their stores with what to get to make it.

Couple with their shop for you service and it's basically blue apron.

~~~
gehwartzen
Yup, at probably half the cost.

------
datamingle
Bad news for podcasts

~~~
seanwilson
Hmm, why is it that Blue Apron, Audible, Casper, Dollar Shave Club etc. are so
common on podcasts for ads? Conversion rates are especially good for those
kinds of businesses?

~~~
shostack
The Exponent podcast did an episode on this. The short answer is they all
share a high LTV and can succeed with podcast ads on a direct response basis.
So despite the outrageous CPMs some podcasts charge these days, they can still
find it profitable.

------
Overtonwindow
There was a really good article in Medium about this.[0] Basically the Blue
Apron model is too easy to duplicate. As more competition enters the space,
the higher the costs for recruiting new customers, to the point where it's no
longer profitable.

0\. [https://medium.com/@byrnehobart/the-slow-motion-
trainwreck-f...](https://medium.com/@byrnehobart/the-slow-motion-trainwreck-
facing-the-meal-kit-industry-345f14df45ad)

~~~
ghaff
It's not just the number of competitors although there are a _lot_ of those.
It's also that, as they try to expand, new customers will tend to be less of a
match for their target demographic. It will take more advertising, discounts,
etc. to reel them in and, once they do, they're likely to use the service less
frequently or drop it entirely.

------
geodel
It kind of makes sense. With the condition of economy I don't think there will
be growing market for fancy meal-kits. For ~9 dollars a kit they put $54M
losses last year. This means price need to rise significantly if they need to
make money. At say $15 I wonder how many current customer will still see value
in kit.

Also in my mails I increasingly see ads/coupons from local grocery stores for
quick to prepare meal boxes. May be they are catching up on this trend.

------
j2bax
I'm surprised no one has made a meal delivery service catered specifically to
Instant Pot owners/enthusiasts. Just imagine, all you need is an Instant Pot
and whatever ingredients/recipes they send you and you can cook homemade
meals. Go ahead someone, take this idea! :D

~~~
oh_sigh
Tovala is doing something very similar, but based around their own hardware
which supports steaming, baking, and broiling

~~~
ghaff
At least a combi-oven like that can brown. The problem with traditional slow
cookers is that the results you get by just dumping everything in and walking
away aren't great. You really want to brown meat first, etc. Slow cookers are
still useful but they're not a magical one pot device.

~~~
gkop
Instant Pot is a combo slow cooker-pressure cooker. It can brown meat, too.

------
notadoc
I really don't see how Blue Apron is superior to, let's imagine for a moment,
Amazon next-day delivering Whole Foods to your house with a couple of recipes
included.

What am I missing here?

I personally think a much better model is high quality _cooked_ or pre-cooked
food delivered to your home. Deliver cooked restaurant quality food rapidly,
like the ultimate take-out. Or just pop something in the oven for 20 min, etc.
Cooking is time consuming and often annoying, the major pain point (for me and
most people I know anyway) is not going to a grocery store once a week or
finding recipes which are abundant online, it's the actual act of cooking for
30-60 minutes, for every dinner (or lunch), before 5 or 10 minutes of eating.

Maybe I'm the wrong target demographic, who knows.

~~~
zippergz
The planning part is what you're missing. If I order from Whole Foods, I have
to decide what to order. If I sign up for Blue Apron, they decide for me.
Exactly what I need, no more and no less, shows up on my door weekly. No
thinking required.

Of course, whether that's a big benefit (or even interesting) to you or not
will vary, but I think it's a material difference.

(FWIW we tried Blue Apron for a little while and thought it was ok, but the
pain points they solve aren't big pain points for us. And we found that the
recipes we kind of hit or miss for our tastes. So we canceled a long time
ago.)

~~~
was_boring
I also tried blue apron (and hello fresh) and found their recipes to be
needlessly complicated. Like seriously, why do I need 15+ ingredients?

I'm still waiting for the 4 ingredients or less service -- even if they are
processed first. I don't need to make everything from scratch.

~~~
ghaff
They're often needlessly complicated because, if they did a Rozanne Gold 3
ingredient thing, you'd be left wondering why you paid a premium to have this
meal assembled and delivered.

In all fairness, one approach seems to be to pre-make spice blends and the
like which aren't pantry staples. This simplifies recipes but but not
necessarily in a way you could do on your own.

------
emodendroket
I'm not convinced the market for people who like cooking but can't be troubled
to choose their own ingredients is really that big.

~~~
city41
I'm not sure that's really the market BA and the like are after. It's more
"people who are busy, but sick of eating out all the time"

~~~
emodendroket
...But they also want to cook, but don't mind paying the same price as a
prepared meal, and also don't want any choice in what they eat.

------
nkrisc
Their recipes an instructions are nice. But their problem is after I did a
trial run, I have the recipes and I'll just go get the ingredients at my local
grocery. I can get recipes online for free or from the good cookbooks I
already own. Any money I saved by getting just the amounts of ingredients you
need is lost to them being an expensive middleman. Sure you might waste less
but it's more money to me.

~~~
greglindahl
Sounds like you aren't in their target market.

~~~
overcast
I'm not sure what the target market is. The half lazy? Too lazy to pick up a
few ingredients, or go out to eat, but not lazy enough to actually cook it.

~~~
jghn
I use BA. I average about one order every 4-6 weeks. I'm also an avid cook, so
at first it seemed like cheating/lame. However the workflow I've developed is
to watch for weeks where 2 of the 3 options are something out of the ordinary
that I'd never normally to think to make for myself, particularly when they
use an out of the way ingredient.

Particularly for the latter purpose, I appreciate that they give me exactly
what I need, because I probably _don 't_ want to use it again any time soon.

~~~
overcast
One order every 4-6 weeks, isn't exactly their target audience. Sounds like
you just like to try something new once in a while, and Blue Apron happened to
have it.

------
Johnny555
I'd always hoped this concept took off, an IPO auction instead of a fixed
price offering:

[https://wrhambrecht.com/openipo/](https://wrhambrecht.com/openipo/)

I first learned about it during the Google IPO, but after that, I never saw
any companies doing an auction IPO that I was interested in investing in.

------
syshum
I have never seen what value Blue Apron provides,

Their meals are overpriced for what you get from what I have seen, I fail to
see their value over simply buying the stuff local and and finding a recipe
online for free.

for their $60 per week to get 6 small portion meals I can buy over 2x that
number of meals shopping at my local store, + snacks and other household items

~~~
jliptzin
I am a blue apron subscriber. Issues with the economics of their business and
the IPO aside, I like the service.

Have you ever tried printing out a recipe online, driving to the grocery
store, and picking up all the ingredients? It's a pain in the ass. Try finding
tandoori spice rub, or pink lemons, or dried currants. Chances are your local
supermarket doesn't have one or two ingredients, so you leave it our or sub
it, but that makes a difference in the taste. On top of that, you're usually
forced to buy much more than you need for any given recipe, making it pretty
wasteful, and more expensive than it should be. Not to mention all the time
wasted physically moving around the supermarket, driving, gas to the
supermarket, etc.

The recipes taste great and they're easy to follow. I routinely have better
meals cooking blue apron than going out to eat. For me, this is a much faster,
cheaper, and better solution. That's not to say this is a great business,
personally I think anyone can copy this service, in particular larger
companies, so I probably wouldn't buy the stock.

~~~
undersuit
>Try finding tandoori spice rub, or pink lemons, or dried currants.

Made the Chiles Rellenos last night, sure I could get a can of tomato paste
for fifty cents, but I only needed a 4th of the can. When I made the catfish
curry, I was thinking to myself, where do I even buy curry? Apparently I can
go on Amazon and get a 5 pack of 12-serving cans.

I don't think the plastic mass I have to deal with is good, but I also threw
out a bunch of my roommate's moldy leftovers while cooking my Blue Apron meal.

~~~
ghaff
You can buy tomato paste in a squeeze tube. Great for that sort of thing. :-)

As I said in a comment yesterday, I suspect that Blue Apron deliberately puts
somewhat oddball ingredients, often in small quantities, in their recipes
precisely to discourage people from thinking "Oh, I can just pick these up at
the grocery store."

~~~
jghn
As someone who orders the occasional BA shipment for precisely the oddball
ingredients, that's fine by me. I'm still using something that I normally
wouldn't. And if I find that it doesn't add any benefit to the dish, I'll not
bother with it the next time.

~~~
ghaff
If I were around for weeks at a time more consistently, I'd probably use these
services more. I actually like the idea even if I know I'm paying 2x relative
to picking out a new recipe and going to the store.

I now know what ramps are for example. (They're pretty much scallions :-))

------
deegles
I think the future will be industrial sized kitchens that cover a large
neighborhood, with individual meals delivered by drone to your home or
apartment within a few minutes. I could imagine apartments with no or minimal
kitchens built to rely on that. Throw in some high quality reusable containers
and you have much higher efficiency and sustainability than any current meal
delivery service.

~~~
JBReefer
Isn't that just called "Seamless" or "Delivery"

------
sb8244
I ended up cancelling and vowing to never go back to their service after they
didn't credit one of my "come back" coupons correctly. Not that it was the
biggest deal, but they deliberately were doing something other than what they
advertised and were completely unapologetic about it. That small act lost me
as a potential customer to their competitors.

------
blairanderson
Everyone here is like "can't believe anyone would use this because XYZ" but
not one reason has made sense.

I have been using blue apron for more than 2 years.

I'd say It's the highest quality meal at its price point.

It makes it so I don't have to think about picking a recipe and selecting
ingredients on Instacart or whatever.

~~~
ghaff
I suspect it's because, as you basically indicate, it's a fairly narrow use
case. Want to cook but don't want to think about recipes and picking up the
ingredients. I suspect most people want either 1. A prepared meal or 2.
Flexibility in selecting and preparing a meal.

The services are fine and in a somewhat different situation I'd probably use
them more. But I understand why a lot of folks don't really get their purpose.

------
desheikh
I've done Chefs Plate and Good Food here in Toronto, and while they are great,
for people like me living in the city, the delivery is not the most convenient
aspect.

My local Supermarket chain, could just put up a rack with meal kits, and
destroy most of their market.

------
oliv__
I think it's so sad that people can't cook on their own and need a kit to be
able to make anything for themselves. I don't know I feel like one can throw
anything in a pan with some olive oil and salt and it's always delicious...

------
criddell
Do they have to have an IPO? Has the board been promising employees and
investors that one is coming?

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cosmotron
For those hitting the WSJ paywall:
[https://t.co/6jFYZkEC6V](https://t.co/6jFYZkEC6V)

It'll give you a Twitter referral which should bypass it.

~~~
gnicholas
My side project Read Across The Aisle also has free unlimited access to WSJ,
through a recently-launched partnership with them. I've made an iOS app and
Chrome extension (both free).

www.ReadAcrossTheAisle.com

------
mothers
if blue apron IPOs it'll be sunk within 5 years. their product is useless[ _].
people who want to pay a premium on food and still cook it? sounds like the
downsides of a restaurant, food delivery and grocery, all in one.

a really good food delivery service with options to click a receipe and all
have the quantity(ies) of all of the necessary foods added into your cart will
kill this whole microshopping silliness.

most who seriously want to cook probably want to choose their own ingredients.

[_] actually, people who want ridiculously complex meals, but for some strange
reason want to cook it instead of buying it already made might like this.

