![]() ![]() ![]() Grocers like Kroger and Publix are running successful meal kit programs, showing delivery services don’t have a monopoly on customer demand in the space. The prospect of Amazon building a sprawling e-commerce presence also has investors concerned. The $94 Blue Apron spends to acquire each customer, meanwhile, has stayed consistent from 2014 to now. The company is putting more money toward marketing to stay visible amidst a sea of competitors. During the last year, order frequency and the amount customers spend per order has decreased. The company has acknowledged these challenges and stated it has "a history of losses” and “may be unable to achieve or sustain profitability." It also noted risks to its business including foodborne illness, changes in consumer tastes or preferences and a "novel business model" that makes it hard to evaluate its future prospects and challenges.īalancing investor concerns with market realities has proven difficult for Blue Apron, and its new valuation and stock pricing reflects a compromise between those two influences.Įven at the lower price investors will remain wary of Blue Apron’s long-term viability. Although Blue Apron’s net revenue grew from $78 million in 2014 to $795 million in 2016, its losses increased to $55 million last year from $31 million two years earlier. But that growth comes at a price for the company with marketing costs, a decline in the amount customers spend per order, and competition from the grocery industry and elsewhere cutting into profits. The increase underscored Blue Apron’s need to expand its operations and market share in an increasingly crowded meal kit category. A few weeks later, the company raised that number dramatically to $510 million and said it was looking to sell 30 million shares at between $15 and $17 per share. ![]() In its IPO filing earlier this month, Blue Apron listed a valuation of $100 million. ![]()
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