Additionally, consumers do not enjoy planning for meals in advance.
Customers do not believe that the convenience associated with the service is enough to offset the price premium. The second ranked reason was "portion size" at 12.6%. For example, 57.1% of survey respondents said “not receiving enough value for their money was the number one reason” for leaving Blue Apron’s subscription service. However Blue Apron’s meals (at $10 per meal under the subscription service) are priced much higher than substitute offerings such as grocery delivery services or even a quick run to the grocery store making the subscription service difficult for customers to afford. Blue Apron’s value proposition was and is to provide time starved consumers with a way to easily prepare and eat a healthy meal. The importance of having the right value proposition is often discussed but can be difficult for an upstart to nail especially in a company’s early years when it is trying to figure out which business model is most effective. Despite the company’s struggles there are a number of lessons that can be learned by other direct-to-consumer brands as well as more established brands planning on entering into new markets.ġ. It can take time to find the right business model and value proposition The company launched its service in 2012 and experienced rapid growth, with sales reaching $881 million in 2017 but it has struggled to become profitable with sales declining to $668 million in 2018 along with a net income loss of $122.1 million within the same year. One of the meal-kit subscription service pioneers, Blue Apron, was among the first to capitalize on this growing segment by delivering these kits directly to customers’ doorsteps. These kits offer consumers fresh ingredients, pre-measured, and conveniently packaged which can be cooked at home to create healthy meals. For increasingly time-starved dual-income households and young professionals, meal kits are a trend that are changing the way people buy groceries and make meals.
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