Some meals end with indigestion. Shares of Blue Apron Holdings (APRN) hit another all-time low last week. The meal-kit provider's stock declined 11.5% for the week, tumbling as the competition continues to heat up in its niche. There were no Blue Apron-specific headlines breaking during the week. Investors just continue to bail on the stock as sales go the wrong way, and rival meal-kit providers gain ground at Blue Apron's expense.
Last week's dagger came from grocery giant Albertsons, announcing that it will begin offering Plated meal kits at its supermarkets by the end of the year. Albertsons acquired Plated last year. It's not a surprise to see Albertsons incorporate the mailed meal kits into its stores, but Albertsons making it official with a timeline is a pretty big deal. Albertsons is the country's second-largest supermarket operator with 2,300 stores across the country under several monikers including Safeway and Vons.
Image source: Blue Apron.
Too many chefs in the kitchen
Featuring Plated meal kits at its grocery stores will help improve brand awareness and visibility, but this is also about convenience. Customers will be able to pick up their meals at the grocery stores across most of the country. Plated meals can also be added to Instacart online orders for two-hour deliveries.
Blue Apron is going to strike deals for a bricks-and-mortar presence, but the clock is ticking. It's no longer the top dog. Recode reported lated last month that HelloFresh now commands 36% of the U.S. market after its purchase of Green Chef. Blue Apron's market share shrank to 35% in February, down from 48% a year earlier.
Shrinking market share isn't fatal, especially if the market is growing. The problem is that the heavy hitters are just starting to take their swings in the on-deck circle. We haven't seen the full gamut of players enter the fray, and Blue Apron's revenue is shrinking. Revenue declined 13% in its latest quarter, and its active customer count has experienced a 15% plunge.
Blue Apron is undeniably one of last year's worst IPOs. The stock has fallen 82% since going public at $10 last year. Many consumer-facing companies tend to see a spike in brand popularity after going public, but that obviously hasn't happened at Blue Apron. Despite being flush with IPO cash since last year, it has had operating hiccups at a new fulfillment facility, challenges with marketing, and a leadership change at the helm. The competition was coming a year ago, and now it may be too late to fight back.
