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Blue Apron Shares Hit New Low, As Anyone Can Do 'Meal Kits,' Even Walmart

Wolf Richter profile picture
Wolf Richter


  • Former unicorn gets trampled.
  • More than 150 startups and the grocery giants are targeting the same business.
  • But Americans are not so convinced.

Shares of Blue Apron (NYSE:APRN) dropped 5% Monday morning to a new low of $2.59 after Walmart (WMT) announced that it would expand its presence in the meal kit market. "One-stop meals," it calls them. They're part of its offering on its website of "meal kits, farm crates and specialty food boxes." The company said the meal kit offering would expand from the 250 stores where it has already rolled out the service to 2,000 stores.

Walmart combines the online ordering process with its vast brick-and-mortar presence and global supply chain. So, it has a better chance of making money in this niche than Blue Apron. These meal kits would serve two people and range from $8 to $15 a box. A check on its website for meal kits reveals prices upward of $30 for two to four meals with "free shipping."

Walmart belatedly has made mega-efforts to not get run over by e-commerce in general and by Amazon (AMZN) in particular. It has been investing in its online grocery business. Sam's Club announced last week that it partnered with Instacart to offer food delivery in several states. It's also rejiggering some of its suddenly shuttered Sam's Club stores into distribution centers for the online grocery business.

Supermarket chain Albertsons Companies (ABS) piled into the meal kit market in 2017, when it launched same-day delivery and "Drive-up & Go," and when it acquired meal kit startup Plated. In November, Albertsons announced that it was partnering with Instacart to offer "nationwide on-demand grocery delivery service" with "deliveries in as little as an hour."

Kroger (KR) announced last December that it was expanding its meal kit service, which it had rolled out earlier in 2017, to 200 stores. These "Prep+Pared Meal Kits are a growing part of Kroger's Our Brands portfolio," the company said.

This article was written by

Wolf Richter profile picture
Wolf Richter is the publisher of wolfstreet.com, a site focused on business, finance, and money. The site is free. In addition to the many years at wolfstreet.com and its predecessor site, he has 20 years of C-level operations and finance experience.

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Comments (20)

Who Dat? profile picture
I like to see Martha Stewart acquires APRN. Her followers will go Gaga.
Why even is the “Apron” needed?
MichaelJHolder profile picture
Especially WMT; not “even”
gataipo profile picture
I agree that the IPO was criminal. I don’t understand why all the Banks and seed investors backed this company when it was clearly bleeding red before it went public.
Compounding Cash profile picture
VCs don't care that the odds are low and it would take a lucky break to survive, since they earn a huge return if that happens. Banks get fees for the IPO. Founders get the option to cash out. All had good reasons.
only people who get screwed is the public who is dumb enough to buy this
This IPO was criminal.
istackchips profile picture
Still wondering why would someone invest in blue apron? I was honestly confused on why they became public in the first place.
BorrowedTime profile picture
I bought 3k shares at $2.60, rolling the dice 🎲
istackchips profile picture
All the best of luck to you.
wjexchange profile picture
The Achilles Heel for Blue Apron and the other cast of characters has been and will be fresh produce. Anyone can ship a can of chili beans through the mail, but fresh fruits and vegetables are horses of a different color and one size does not fit all. Cold chain maintenance, ethylene sensitivity, and humidity levels are all key factors affecting quality. Couple that with the complicated logistics of fresh produce procurement and you have a recipe for disaster.
Now Amazon buys blue apron lol
Compounding Cash profile picture
It’s hard to see what there is to acquire. There’s no cash flow, the actual loyal customer base is extremely small, and I’m not sure that any major retailer needs a distribution center in New Jersey. I expect an acquisition could be done at some low price but not $500m+. Maybe the brand has a little value to someone with an actual efficient operation.
Compounding Cash profile picture
In my previous article I noted they may only have around 130k loyal customers. If they each spent $2000 per year at a net margin of 10% that’s worth $26m per year. However that can’t be realized as long as they are spending like the business is 10x as big. I think the debt mostly nets out the cash and there would be losses until a massive downsizing can be completed. The DC would probably be sold off at a large discount. Likely not worth even a 10x multiple on that hypothetical $26m.
BorrowedTime profile picture
So especially you expect it to go under $1 a share and be delisted, correct?
This is the problem with APRN's business model. They are constantly depleting their target market. If they are going after people that don't know how to cook, they are teaching them. These people will soon find they don't need APRN and can do it themselves for cheaper. If they are going after people that want a convenience. Those people will find that it isn't that hard to buy the same ingredients at a WF or some other store and plan ahead and save a lot of money. Either group that is their target market will soon find they don't need APRN. And that's why shareholders are finding they don't need it either.
Calculus profile picture
"anyone can do it even Wal Mart" is more than a little odd.
M Cuturic profile picture
meal kits are going to be for people who have disposable income and not much time so the well-to-do will be involved here will be a niche market Blue Apron Will Survive it just won't be a mass-market appeal
Called this when Walmart announced meal-kits. Look for other meal-kits to follow suit if they aren't named Amazon or Walmart.
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