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Four reasons why Amazon entering the meal-kit game would spell doom for Blue Apron

Last month, Fast Company’s Ruth Reader asked whether Blue Apron would even exist in five years. Perhaps we should shorten that down to two. Amazon has registered a U.S. trademark for what looks suspiciously like a meal-kit service with the slogan “We do the prep. You be the chef.” In the wake of that bit of news, Blue Apron’s stock has dropped to its lowest point ever, down more than 9%, according to CNBC. Below are four reasons why this is especially bad news for Blue Apron.

* As Ruth pointed out, Blue Apron’s customer acquisition costs are already out of control: “Blue Apron’s marketing department is spending an exorbitant $94 per customer to get people to sign up for its service—and in the last year, its customer growth rate has actually slowed.” 

* While Amazon’s exact plans aren’t known, theoretically, every single Amazon Prime customer would already be a member of their meal-kit plan

* As Ruth points out, meal-kit subscription services endure a lot of customer drop-off. But if you could order a dinner kit on Amazon Prime and have it delivered to your house in an hour whenever you forget to plan dinner—and not on Blue Apron’s fixed schedule—it could make a meal-kit plan even more appealing.

* Amazon’s acquisition of Whole Foods means the company will soon have access to top-notch food sourcing and distribution, which will undoubtedly make it easy to compete with Blue Apron in the meal-kit market.

[Photo: Flickr user Kate]ML