Blue Apron Subscriptions Have Dropped by 15% From Last Year

Blue Apron box

As the on-demand delivery space gets more competitive, the meal-kit delivery service Blue Apron continues to struggle to grow its customer base.  

The company reported earlier this week that it had 746,000 customers in the final quarter of 2017, which is a 15 percent drop from last year and a 13 percent one from three months prior.   

Although Blue Apron’s revenue fell by 13 percent last year to 187.7 million, this was still more than the predicted $185 million. 

Blue Apron was the first meal-kit company to go public, but its debut on the New York Stock Exchange was lukewarm. Since then, the meal-kit company has faced concerns from investors, especially with the Whole Foods acquisition by Amazon. This big play by Amazon was announced the same month the meal-kit company went public, presenting itself as a large threat to the business.

“We aren’t really going to focus on who has the number one share of customers or revenues at this point in time,” said Brad Dickerson, Blue Apron’s new chief executive. “We believe longer term we can have that spot.” 

This year, the meal-kit company is planning to invest in advertising to get more customers. Customer acquisition for these subscription-based programs is extremely expensive. 

In October of last year, Blue Apron laid off 6 percent of its staff. The company also decreased its marketing budget and fulfillment rates lagged in 2017. 

“We are working against some negative momentum coming into the year,” said Dickerson. “There’s a lot of competition out there.” 

A few years ago, meal-kit services are on the rise, but the market has quickly become saturated. 

These meal delivery services allow users to select their dietary preferences and choose between a few meal plans. Every week thereafter, consumer select their meal options and receive a shipment of ingredients with recipes to prepare the week’s meals. Depending on the service, the price per meal per person can start anywhere from $8.75 to $12.

Do you think Blue Apron will be able to stay afloat? It will take a lofty marketing budget to get more subscriptions. Is the competition now too difficult to compete with? 

Read more about Blue Apron’s drop in customers from "Wall Street Journal."