Blue Apron’s market cap average was 760 million.
Today, the market cap is 136 million.
Down 82% in five years.

Blue Apron turns 10 years old in August and it was once a venture capital darling, raising 240 million dollars, almost one million subscribers and people thought it’d end up as a multi billion dollar company.

Today, it’s been in a decline for years and any investor would have lost over 80% of their money if they bought the stock early on.

What went wrong?

First up, quick overview of the financials/users.

Blue Apron peaked in 2016, where it reported 800,000 active subscribers.

Revenue wise, they have had constant issues.

2017 revenue was the peak at 881 million.
In 2020, that number dropped to 461 million, which final reports for 2021 are still being done, but it didn’t rise at all.

Revenue down 47%

Looking at profits, it gets worse, where Blue Apron has never a single year had a profit.

The other issue is it seems as revenue grow, losses to fund that growth grow with it.

2017 was the highest earning year at 881 million, but also the biggest loss year 210 million in the red, for a 23.8% loss.

Losses also still haven’t fallen that much, where in 2020, with about half the revenue, they still run a loss of 10%.

This brings up the second issue, which this might not be a strong business model.

Blue Apron
Hello Fresh
Plated

The concept with all of them is sending people boxes that have a protein such as fish or chicken, seasonings and vegetables portioned out for people, so they can cook it themselves.

Hello Fresh has had visibly more success, where they were tied with Blue Apron in 2016 at 800,000 subscribers, but today has 7.2 million.

Looking at the financials though, they aren’t very good.

The 2021 revenue for Hello Fresh globally were 6 billion.
Profit was 256 million.
Margin of 4.2%.

Which isn’t bad for a developing company, but still points to the idea this is a competitive space, which is similar to other grocery/delivery businesses, holding slim margins.

Blue Apron & HelloFresh both raised hundreds of millions with a subscription boom, which likely was sparked by the rise of Netflix in the mid 2010s.

The issue is while some companies such as Netflix can thrive with subscribers, most subscription delivery businesses found lower margins and really just monetized framing themselves as tech companies to VC’s, claiming they can monetize off data.

This makes this not a really exciting space and a rough market to be in, where a lot of subscribers leave, the mission is marketing constantly to new people, quality control is key and it’s a single digit profit business.

Clearly it’s working for Hello Fresh though and that’s ultimately the third and final reason for the fall of Blue Apron, Hello Fresh won.

Did some research on the reason and found that the reason for success was Hello Fresh is more expensive.

Blue Apron meals averaged $7-9.
Hello Fresh meals averages $9-12.

Which sounds odd, where in most businesses, the cheaper product sells better, but in this case, it was the opposite.

Blue Apron & HelloFresh were always more premium products and catered to an audience that can afford to do something different over go to the grocery store.

HelloFresh focused on being a little more expensive, having more of the meals prepared for people and that higher price point gave both better margins and more ad spending.

Blue Apron did less product prep and didn’t have as much money for ads or producing margins.

Final thoughts, can Blue Apron turn it around?

Probably, but it seems like this will be a mid level business, versus the billion dollar juggernaut Silicon Valley hoped for.

There’s nothing that bad about the model, but proof that VC’s and businesses trying to look like “tech companies” can still just be people delivering bags of food to people.