Move Over Amazon and Blue Apron, Chick-fil-A to Roll Out Meal-Kits in August

Move Over Amazon and Blue Apron, Chick-fil-A to Roll Out Meal-Kits in August

A few years ago, investors saw a lot of potential in the meal-kit market. But it appears to have been short-lived. 

This year, most of these companies are seeing a slump and we have seen many casualties. For example, Chef'd closed last week. Blue Apron saw a lukewarm IPO. Home Chef was recently acquired and grocery chains, like Albertson's which bought Plated, are investing in these companies to offer additional meal options to compete with Amazon. 

 "If you look across the [consumer packaged goods] landscape, there's a really proven model of [companies] focusing on manufacturing, branding, and convincing people to buy, and companies that are good at distribution," said Rich DeNardis, Home Chef Chief Revenue Officer.

Even though we are seeing meal-kit companies struggle in the market, that is still not stopping the beloved QSR giant Chick-fil-A from jumping on the cook-at-home bandwagon. 

Starting August 27, customers in Atlanta (where the company is headquartered) can buy two-person meal kits for less than $16 each. 

After surveying its customers, Chick-fil-A found out that their target demographic cooks at home often and usually picks chicken as their protein. 

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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 Subscriptions Have Dropped by 15% From Last Year

Blue Apron Subscriptions Have Dropped by 15% From Last Year

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. 

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