HelloFresh Finds Success in U.S. Surpassing Blue Apron in Customer Growth

HelloFresh Finds Success in U.S. Surpassing Blue Apron in Customer Growth

Since the German meal-kit service, HelloFresh, went public late last year, the company more than doubled its customer base in the United States. This is thanks to its wise investment in marketing, which has propelled the business forward surpassing its biggest competitor— Blue Apron.

“HelloFresh’s customer base also grew to 1.5 million globally, making it much bigger than Blue Apron, whose customer base shrank 15 percent to 746,000 due to lowered marketing spending,” as reported by “Recode.” It’s important to note that “HelloFresh includes customers who’ve received free boxes toward its customer total while Blue Apron only counts paying customers,” which obviously adds to its overall customer count.

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Blue Apron's CEO Steps Down, CFO and Former Under Armour Executive To Take Over

Blue Apron's CEO Steps Down, CFO and Former Under Armour Executive To Take Over
  • Blue Apron's CEO, Matt Salzberg, steps down and is now an Executive Chairman for the company.

  • Blue Apron is searching for a new CFO since Brad Dickerson stepped in new CEO role, for the meal-kit company.

News of Blue Apron’s CEO stepping down came earlier this month, when it was announced the co-founder of the meal-kit company, Matt Salzberg, would be leaving behind his post to Brad Dickerson, previously Blue Apron’s CFO, to fix the company’s financial troubles.

The company has been suffering production problems and is projecting slower sales growth.

Salzberg won’t go away completely, though. He will remain involved with the company as an executive chairman as Blue Apron begins to look for a replacement for the vacant position Dickerson left behind.

“We still have the ability to drive much more efficient margins going forward, and that gives us more ability to spend more money on things like marketing,” Dickerson told “Bloomberg” in a phone interview. “Margin is really the key to unlocking the future, both for near-term and long-term success.”

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Blue Apron Faces Layoffs After Lukewarm IPO

Blue Apron Faces Layoffs After Lukewarm IPO

On Wednesday, Blue Apron announced it will be implementing “a company-wide realignment of personnel to support its strategic priorities.”

Since going public in June of this year, Blue Apron has been hard at work fixing operational issues in order to grow subscriber numbers and also please investors’ expectations.

As Foodable reported in August, the first quarter report for Blue Apron revealed a surprising $238 million in revenue, a disappointing $31.6 million in losses, and a decline in subscribers (from 1 million to 938,000 customers) leading to a drop in shares.

Since then, the company has been forced to shrink its marketing budget, laid off 14 recruiters and launched a podcast in an effort to become more of a lifestyle brand around home cooking.

Now, the meal-kit competitor is faced to lay off approximately 6 percent of its staff across both corporate offices and fulfillment centers—  that figure will “probably amount to more than 250 layoffs” according to “TechCrunch.”

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Can Blue Apron Solve Operational Problems and Change Public Investors' Minds?

Earlier this month, the meal delivery service Blue Apron released its first quarterly earnings report after the company went public in June of this year.

It declared a surprising $238 million in revenue (a number which surpassed analyst estimates of $235.8 million, according to Bloomberg,) but a disappointing $31.6 million in losses and a decline in subscribers. Blue Apron had 1 million customers before going public, which dropped to 938,000.

On an earnings call, the loss in costs were blamed on Blue Apron’s fulfillment center expansion from a smaller warehouse in Jersey City, New Jersey to a larger facility in Linden, New Jersey.

This new warehouse comes with technology improvements, which will help the company become more automated. The transition requires further training on new systems for employees at this new fulfillment center and has forced Blue Apron to cut costs by firing part of its recruitment team. The company announced it is also implementing a hiring freeze on salaried employees and is reducing its marketing budget.

As a result, Blue Apron shares dropped 18 percent to $5.14 by the end of the trading day in New York on August 10.

With a smaller marketing budget, limited capital, and a shrinking subscriber pool— how can Blue Apron assure steady growth?

Luckily, after Jana Partners disclosed a 2 percent stake in the company, shares rose as much as 5.3 percent and the stock was up 3.1 percent to $5.28 on August 14.

But even with the small stock hike, Blue Apron’s shares are down almost 50 percent since their debut in June and are currently trading lower while the stock is down over 4 percent as of 2:10 p.m. in New York on August 29.

When Foodable first reported on Blue Apron’s IPO debut, the e-commerce subscription business had detailed a $800 million in annual revenue and 54.9 million in losses in 2016. It will be interesting to see how Blue Apron performs in its first year of going public as it goes head to head with other subscription-box and meal-kit companies, as well as e-commerce giants like Amazon as it becomes more of a well-defined competitor in the multifaceted food space with its recent acquisition of Whole Foods. 

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Will Blue Apron's Lukewarm IPO Be Able to Compete with Amazon?

Will Blue Apron's Lukewarm IPO Be Able to Compete with Amazon?

The meal delivery service, Blue Apron made its debut on the New York Stock Exchange last week, but it looks like Amazon may have spoiled its IPO.

Blue Apron collected $300 million in its lukewarm IPO, but it will need more funding to stay afloat.

The company reported that it made $800 million in annual revenue last year and had 54.9 million in losses. However, it reported that its cash and current borrowing capacity will only support the company for at least a year. This isn't going over well with investors.

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